For many emigrants in France, estabilishing a micro-enterprise is the best way to start one’s economic activity. Thanks to new French regulations, it’s easier for non-native to start their own business. The “auto-entrepreneur” term, that was in use since 2009, was lately changed to “micro-entrepreneur” but the former term is still often used and refers to sole proprietorship registered under the owner’s name.
That means that notion of the owner is synonymous with the firm. Setting up a one-person economic activity is a great way to provide the services for example as a freelancer. That status of the sole proprietorship owner affords simplified legal provisions, so the management of the company becomes a lot more easier.
What are the benefits of setting up
a sole proprietorship in France?
Everyone can become a micro-entrepreneur (e.g. students, lawyers with part time or full time jobs, a job seeker, a pensioner etc.), unless their profession isn’t legally regulated. You can find the list of legally regulated professions on this page. Main benefit of this kind of economical activity is the fact, that the micro-entrepreneur status gives freedom and autonomy. You can manage your time and decide on your working hours yourself. The one-man business can be your main or extra job (e.g. while working as an employee). The micro-entrepreneur status allows you to pay lower taxes, so if you didn’t earn a nickel, you will have nothing to pay, proportionally to your earnings. As a micro-entrepreneur you work for yourself and you are subject to a simplified taxation system, so you have to pay the TVA tax only if your business activity based on services reaches over 34 400€ full-year trading or if the business activity based on trading reaches over 85 800€ of annual revenue (it can be both, a pro or a con, depending on the type of one’s business activity). It’s also worth bringing out, that all the micro-entrepreneurs are eligible to join the health insurance plan.
How to set up a sole proprietorship in France?
The process of setting up a one-person economic activity in France is quite simple and quick. There are few ways of registration:
Personally: in Centre de Formalités des Entreprises (CFE) – choose a branch closest to your place;
By post: fill up a form here – click on Accéder au formulaire, and send it to the right CFE;
Online (the easiest way): on this page.
You should select the category of activity, and before that make sure that it is covered by this status (the full list can be found on the website legalstart.fr). Certain types of activity require confirmation of relevant qualifications or experience. After registration, you will receive an INSEE certificate with a SIRET number. This document is very important because without it you will not be able to issue invoices to customers.
However, despite the fact that the registration itself is not complicated, you should approach it carefully, because making further changes is much more difficult.
Documents required to apply for "micro-entrepreneur" status
To apply for micro-entrepreneur status the following documents are required:
a copy of an identity document (passport, titre de séjour);
proof of residential address (such as an electricity , gas or water bill in your name);
Attestation de non-condamnation et de filiation, i.e. a statement that you have not been excluded by a court decision from the possibility of running a business.
In addition, you must also choose the type of social security and the method of taxation.
Your responsibilities as a micro-entrepreneur
As an entrepreneur, you must register your income (Chiffre d'affaires). Due to the fact that you do not pay TVA, you do not deduct expenses. Therefore, if your company has a lot of expenses, it may not be the right form for you. There is no minimum rate for National Insurance contributions, so if you earn nothing, you pay nothing. The declaration can be submitted monthly or quarterly. If you earned 0€, you also need to submit a declaration. Because you don't pay TVA, bookkeeping is very simple with this status and even full bookkeeping is not required in most cases. All you need is a simple register of deposits and withdrawals. If you do not exceed an annual turnover of 10,000 euros in two years, there is no need for a separate bank account.
If you intend to apply for the status of a micro-entrepreneur in France and you have doubts about whether you can handle the registration process yourself or if you want to get advice on this subject, please contact us.