Start Business in France
Expert help on registering, setting up and starting a business in France.

TIP: Is your brand or trade mark already registered in France

A quick and easy way to check if your brand name is already registered in France, is to check the INPI online database. Check out the “recherche par nom de marque” page and simply enter your brand name in the first box, click on “rechercher” and cross your fingers…

The result page will show who has registered the same brand in France or will list similar names with a slightly different spelling. I tried “baba” and got 81 results with various spelling! Well it is a got job I am not a brand guru…

Once you have confirmed that your brand name is available in France, you can register it online with INPI. It will cost you about 250€ for 3 categories (for instance magazine, print and cosmetics). Count an extra 40€ for extra categories. The good news is that the INPI website is in English.

PS: you will need your SIRET number in order to register your brand.

Entrepreneurs: beware of fake invoices

Every month seems to bring its quota of auto entrepreneurs scams. From paying auto entrepreneur registration sites to fake business directories. The latest scam is actually aimed at all types of entrepreneurs, including limited companies (EURL, SARL).

The ‘‘Greffes du Tribunal de Paris’’ has issued a warning to limited companies and freelancers registered with Registre du Commerce et des Societes (RCS, i.e registrations onto the Chamber of Commerce directory). These companies are likely to get commercial offers designed to look like invoices from Registre des Sociétés Nouvellement Constituées,  Registre CSR or Inforegistre . The invoices have nothing to do with Greffes du Tribunal or Registre National du Commerce et des Societes (managed by INPI). 

In doubt, contact your local chamber of commerce. Once your business is fully set up, there are NO compulsory directory registrations.

Reminder of existing marketing campaigns designed as compulsory invoices:

• France Annuaire On-Line d’Entreprises 957€
• Registre des Societes Nouvellements Crees for 80€
• Annuaire Telecom 118 for 260€
• New: Pages-entreprises.info 297,60€
• New: Société de Référencement sur Internet for 249€ for one quarter

How much social charges will you pay

I have come across this great online tool enabling would be entrepreneurs to assess how much social charges they will pay, according to their business type. Your social charges vary according to your business structure (entreprise individuelle, EURL, SARL) and business regime (auto entrepreneur, micro, regime reel simplifie).

“How much tax will I pay in France” is one of the most frequently asked questions. It is also difficult to give a clear answer, since it vary according to your business structure, as well as your estimated turnover and expenses. So have a look at the “comparateur de charges sociales”, it will give you a good idea of what you will pay.

TiP: cheap insurance for auto-entrepreneurs

When starting your business, it is crucial to cover yourself for damages you might cause or suffer from. Here are a few offers designed specifically for auto-entrepreneurs, starting from 15€ per month for assurance responsabilite civile professionnelle.

• Entrepreneurs de la Cite
• Aviva
• Macif

Most insurance companies offer business insurance. Amongst the most affordable are AXA (very competitive for assurance decennale for the building trade), MMA and Matmut.

Also try Companeo to get up to three quotes sent to you.

Auto-entrepreneurs: When to make your first turnover declaration

Discuss in the forum

All auto-entrepreneurs have a minimum delay of 90 days before having to make their first turnover declaration. If you have decided to make your declaration by snail mail, just wait for the “Declaration de chiffre d’affaires” form to be sent to you by RSI or URSSAF (according to your activity). If you have not received anything past the 90 days, get in touch with RSI-URSSAF, as there might be an issue with you account.

For auto-entrepreneurs wanting to declare and pay online via www.net-entreprises.fr, follow the easy 2 steps process: 1) create your account with Net Entreprises, 2) declare and pay when the deadline is up. The same minimum delay of 90 days applies to you too.

Here is a summary of the deadline for your first turnover declaration according to your business registration date.

Deadlines for your first quarterly declaration

Deadlines for your first monthly declaration

table source: Net Entreprises

There are a few bugs with the Net Entreprises accounts. Some auto-entrepreneurs who initially opted to pay on a quarterly basis have noticed that their declaration has switched to a monthly deadline. If this is your case contact RSI or URSSAF (according to you activity) and ask them to up-date your account.

My account with Net Entreprises for instance did respect the 90 days delay, but was switched to a monthly declaration straight away…

New business structure to be launched in 2010: Entreprise individuelle with limited liability - EIRL

Entreprise individuelle is one of the easiest business structure to start in France. But its huge downside is that the entrepreneur is liable on his-her personal asset for all debts generated by the business. Indeed there is no distinction between the business and the entrepreneur - this is referred to as “entreprise en nom propre’‘.

This can have a huge impact on the family, has married or pacsed couples would be both liable for the debt incurred by the business.

A new law has been presented to the Conseil des Ministres in January and is being discussed by the Parlement on 17th february. The aim of this new law is to protect entrepreneurs and avoid them going into personal bankruptcy. The EIRL would enable to separate the business asset “patrimoine professionnel” and personal asset “patrimoine personnel”. Entrepreneurs would therefore be only liable on their business asset in the even of financial difficulties. 

This new law could affect all entrepreneurs registered as “entreprise individuelle en nom propre”, including existing entreprises individuelles, micro entreprises and auto entrepreneurs. It is expeced that existing businesses will be able to switch to this new business structure - artisans, commercants, professions liberales.

How will the EIRL work

The entrepreneur will declare which part of his-her personal asset is affected to the business and will therefore represent a garantee for the business creditors. Artisans will make this declaration to Repertoire des Metiers, commercants to Registre du Commerce and professions liberales and auto entrepreneurs to Greffe du Tribunal. If a building is affected to the business, a legal document will also have to be written by a notaire.

Key rules applied to the EIRL

• Accounts will have to be published yearly (bilan), as per the EURL and SARL. Auto entrepreneurs and micro entreprises will have a simplified version (obligations comptables simplifiees)
• No liability on personal asset once the declaration is published
• Option to choose between the Income Taxe (impot sur le revenu IR) or incorporation taxe (Impot sur les societes IS)
. Dividends will also be limited.

This new business structure, which is very much inspired by the EURL, will enable the entrepreneur to decide the level of risk he/she is ready to take.

I will keep you posted on the EIRL as and when new laws and decrees are published.

Deadline: Profession liberale switching to the regime micro social: 28/02/10

Discuss in the forum

Existing businesses registered as professions liberales can switch to the regime micro social and therefore pay their social charges as per the auto entrepreneur system. The switch will enable you to pay your social charges as you go, based on a fix rate of 18.3%. If you currently run an entreprise individuelle under the micro entreprise regime, read on.

As a reminder, profession liberale refers to “intellectual based” activities registered with URSSAF. For instance consultants, language teachers, personal coach, translators, web designers, programmers, etc. These activities relate to CIPAV for their pension.

What are the advantages of the Regime Micro Social?

• Your social charges are paid according to your real turnover, with monthly or quarterly turnover declarations
• Your social charges rate is similar to the auto entrepreneur scheme: 18.3% for services or mixed activities (trade plus services)
No lump sum to pay off in N+1 as per the micro entreprise regime. For instance if you registered in January 2008, you will have paid your cotisations along the year according to a general turnover estimate. You will also have had a “regularisation de cotisation” for 2008 paid in October or November 2009. This is called “regularisation de charges sociales” and can be damaging for your business if you haven’t saved enough for the regularisations.
• If your business has been suffering from recession, it enables you pay your social charges according to your real activity and not based a booming year.

What are the drawbacks of the Regime Micro Social?

• One and only rate : 18.3% for mixed activities
• Doesn’t apply to entreprises individuelles under regime reel simplifie

How does the switch to regime micro social works

• You need to write to URSSAF in order to request the switch over to regime micro social
• Before the switch is complete, you will need to settle your social charges balance. This amount will be your final “regularisation” based on your real turnover for 2009.
• Indicate in your letter whether you wish to pay your social charges on a monthly or quarterly basis
• The switch to micro social will be back dated to 1st January 2010
• No impact on your carte vitale. You remain with URSSAF and your chosen “organisme sante”

Deadline to apply for the regime micro social?

Since the decree of implementation has been released recently, you have up to the 28th February to apply. Past that deadline any application until 31st December 2010, will only work from 1st January 2011.

How to apply for the regime micro social - sample letter

Write to URSSAF requesting the switch to regime micro social with a recorded letter (avec accuse de reception from La Poste). Here is a sample letter:

Forum members can access a sample letter in French to send to URSSAF requesting the switch to regime micro social.

Start Business in France is now on Facebook: Become a fan

I have been using Twitter for over a year now - Valerie_50 - and thoroughly enjoy it. It is a great way to find and share useful resources.

So I guess there was only one step more to move onto Facebook with a fan page. Voila, c’est chose faite! You can now become a fan of Start Business In France and ensure you won’t miss any changes which may impact your French business.

So what will I be sharing will you on Facebook: tips, useful resources, up-coming events, moods, etc. 

How to finance your French business

Many English speaking entrepreneurs starting a business in France think that self financing their project is the only way to get the business of the ground. It may be true if your grasp of the French language is limited, but there still are many schemes available to help you start. Banks will in general ask you to finance at least 30% of the initial investment and are also likely to request garantees on your professional loan.

If your overall investment is below 45 000€, my advice is to look at Prêt Création Entreprises (PCE) from OSEO. Your bank manager can set up this business loan via the Oseo extranet and - provided your bank has agreed to finance your main professional loan - it can be set up very quickly.

What is a Prêt Création d’Entreprise (PCE)

This small business loan, ranging between 2,000€ to 7,000€ is issued by OSEO, a national banking organisation, and generates a guarantee of 70% on your main business loan. PCE can only work for an overall investment of up to 45 000€, however OSEO also offers garantees for higher investments.

How does it work? The PCE has to be associated with a bank business loan of at least twice its amount – so a PCE loan of 7 000€ requires a business loan from the bank of at least 14 000€. OSEO issues a guarantee on your bank business loan and commits to reimbursing this loan to your bank if your business came into administration or receivership. The PCE interest rate varies on a monthly basis and was 4.15% in February 2010.

Other ways to finance your business in France

Other schemes which could help you convince the bank manager to invest in your business include:

• Garantee on business loan for women entrepreneurs - Fonds de Garantie à l’Initiaitve des Femmes (FGIF)
• Interest free loan via the Chamber of Commerce and their banking partners - Entreprendre En France network (EEF)
• Interest free loan for the unemployed - Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise (NACRE)

Fonds de Garantie à l’Initiaitve des Femmes (FGIF)

Women entrepreneurs can request a guarantee from the Fonds de Garantie à l’Initiaitve des Femmes (FGIF). This national fund managed by France Active will generate a guarantee of 70% on business loan up to 38 000€. The maximum guarantee will be limited to 27 000€ for loans over 38 000€. The FGIF guarantee will cost you 2.5% of the guaranteed amount. In order to set up the guarantee, your project will have to be approved by a committee held by France Active. Members of these commissions usually are bank managers, accountants and business advisers, acting voluntarily on behalf of their organisation. A standard application would include a market study and a financial plan, which France Active would help you complete. 

Entreprendre En France network (EEF)

Interest free loans are also available for businesses registering with the Chambre de Commerce et de L’Industrie (CCI) via their Entreprendre En France network (EEF). This network provides business advice with access to experts such as lawyers, accountants or notaires. They also have an agreement with most banks, enabling entrepreneurs to get an interest free loan ranging from 5 000€ to 7 000€, depending on the bank. You will have to present your project to the EEF committee (short market research and provisional plan) and answer a few questions related to your business. Questions vary from one project to another and could be related to your estimated turnover, your stock and suppliers, your marketing strategy, etc. Get in touch with a business adviser from your Chambre du Commerce, who will brief you and help you complete the dossier.

The Chambre de Métiers has a similar initiative and provides interest free loans for artisans. Regional conventions are signed with several banks and loans may vary from 5 000€  to 11 000€. Once again, get in touch with your local Chambre de Métiers to check which banks have a partnership and what is the average loan.

Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise (NACRE)

If you are currently working on a business idea but are still registered with Pole Emploi (former ANPE), you may also benefit from NACRE - Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise. This new scheme launched in April 2009 by the Governement, enables you to benefit from the free support of a business adviser, as well as the ability to request an interest free loan called “prêt d’autonomy” ranging from 1 000€ to 10 000€ (reimbursable over 5 years). Business advisors from the Boutiques de Gestion, Chambre de Commerce or Chambre de Métiers have been selected to help the unemployed start their business. According to your personal situation, they will help you complete the market research, complete your financial and provisionnal plan and assess the various help you may be entitled to. They will also help you prepare your file for the committee who will allocate the interest free loan.

You are eligible for NACRE if you:

• are unemployed with unemployement benefits
• have been unemployed without benefits for at least six months over the past 18 months
- Soon to be changed to unemployed without benefits
• are a single parent receiving the ‘Allocation Parent Isole’ (API)
• are receiving the “Revenu de Solidarité Active” (RSA former Revenu Minimum d’Insertion RMI)
• are unemployed and over 50 years old

Aide aux Chomeurs Créant ou Reprenant une Entreprise’ (ACCRE)

Finally, check whether you are entitled to the social charge exoneration ‘Aide aux Chomeurs Créant ou Reprenant une Entreprise’ (ACCRE). Under ACCRE, during your first year of business your social charges will be 25% of what you would otherwise pay. In the second year this figure rises to 50% and in the third year 75%.  The eligibility for ACCRE is similar to those for NACRE listed above. The ACCRE application form is available online or at the Centre de Formalités des Entreprises and should be returned to URSSAF within 45 days of your registration. ACCRE will be extended to year 2 and 3, provided you remain within the yearly turnover limit of 32,000€ for services and 80,000€ for trade.

ACCRE is also applicable to auto-entrepreneurs. The social charges rate in their first year in business is divided by 4. For instance an ecommerce website selling close would pay 3% of social charges instead of 12%.

Example(ACCRE)

Now you may be thinking “that sounds like a lot of paperwork to me!”. Fortunately all these committees will request the same information, which usually comes down to a basic market research and a financial plan. The good news is that you can add several scheme together. For example, let say that you plan to buy a restaurant and have an overall investment of 43 000€.

• Overal investment 43 000€
• Your investment 20%  8 600€
• PCE prêt création d’entreprise for 7 000€
• EEF entreprendre en France for 5 000€
• Bank loan 15 400€ on which the PCE would generate a guarantee for 70%

You would have considerably reduced the risk for the bank, hence having more chance to secure your business loan.

Useful websites
http://www.pce.oseo.fr
http://www.franceactive.org
http://www.entreprendre-en-france.fr
http://www.apce.com

Tip: What is the minimum wage in France - SMIC

The minimum wage in France is called SMIC, which stands for Salaire MInimum de Croissance. Since 1st January 2010 the SMIC is worth 8.86 euros per hour. This comes to a monthly gross salary of 1343.77€ for your employees. As the employer, your business is liable to an extra 42% of “charges sociales patronales” on that salary.

• SMIC growth hourly rate 8.86€ (before employers’ social charges)
• SMIC growth monthly rate 1343.77€, based on 151,67 hours
• SMIC net monthly rate 1056.24€
• Employers social charges about 42%

SMIC up-dated each year on 1st January

Has your monthly on-line turnover declaration changed to quarterly?

Has your monthly on-line turnover declaration somehow mysteriously switched to quarterly declaration? Well I spoke to URSSAF about this and they confirmed that there is a bug in their on-line system. They suggest you write to them if you wish to move back to a monthly declaration. Here is a sample letter or email (via contact page on Net Entreprises) to move your payments back to being monthly.

Object: declarations de chiffre d’affaires sur http://www.net-entreprises.fr
No SIRET:

Madame, Monsieur,

Je me suis inscrit comme auto entrepreneur le xx/xx/xxxx et crée mon compte sur Net Entreprises pour effectuer mes déclarations de chiffre d’affaires.

J’ai initialement choisi de faire une déclaration mensuelle. Apres avoir fait xx déclarations mensuelles, mon compte affiche désormais des déclarations trimestrielles.

Je vous serais reconnaissance de mettre mon compte a jour, afin de pouvoir a nouveau déclarer mensuellement,

Cordialement,

Changes planned to the auto-entrepreneur regime in 2010

The auto-entrepreneur regime is celebrating its first birthday and a few modifications are planned for 2010. No ground breaking changes, here is a summary:

• Turnover thresholds have been slightly increased to 80,300€ for trade, food and accommodation and 32,100€ for services.
• Existing micro entreprises registered as professions liberales and relating to CIPAV, will be able to switch to the regime micro social (i.e pay their social charges as per the auto entrepreneur regime). The deadline to switch over is 28th February 2010. Once confirmed by RSI or URSSAF the change will be back dated to 1st January 2010.
• Auto entrepreneurs will be able to remain within the scheme even if no turnover is declared for 3 consecutive years. Past that deadline they will be automatically be moved to a standard entreprise individuelle.
• Auto-entrepreneurs registered as artisans will have to be listed on the “repertoire des metiers” from 1st April 2010 (business register compiled by Chambre de Metiers).
• Taxe professionnelle has been replaced by “contribution économique territoriale”. Auto-entrepreneurs will benefit from an exoneration, provided they have opted for “versement de l’impot liberatoire” or income tax paid at source.

Who uses Start Business in France?

Year to Jan 14, 2010: 24,383 visits came from 128 countries/territories. 18,738 from France, 1917 from the UK, 1189 from the USA and 4456 visits from other countries. 48% of all visit were via search engines, 25% from referring sites and 27% direct.

Keeping a close eye on where your website visitors are located, how they found you, how long they spend on your site, what they read etc. is vital information for any website/business owner. Amongst other things it can help you better target your marketing, save you money, save you time and eventually get more customers. If you don’t already monitor your website statistics I can highly recommend Google Analytics, it’s free.

Free video: How to make your first auto-entrepreneur turnover declaration

Discuss in the forum

The next deadline to complete your auto-entrepreneur quarterly turnover declaration is on 31st January 2010. If you have recently registered as an auto-entrepreneur and are wondering how to complete this new administrative challenge, there is no need to worry. I have just released a video explaining how to complete the “declaration trimestrielle de chiffre d’affaires”.

The auto-entrepreneur turnover declaration video includes:

• How to complete the turnover declaration form
• How to declare mixed activities
• Reminder of the turnover declaration deadlines for 2010
• Checklist of information to verify to ensure you are being charged the correct social charges and income tax rate
• Reminder of the social charges and income tax rates per activity type
• Copy of forms from RSI and URSSAF

This 18 minute video shows you, step-by-step, how to complete your quarterly auto-entrepreneur turnover declaration. Watch the video.

Warning: The official auto entrepreneur website is off line

The offifial website www.lautoentrepreneur.fr has been redirected to URSSAF’s website. I have no idea whether they are experiencing some technical problems, but I will chase them tomorrow.

In the meantime, you can still register your auto entrepreneur business with URSSAF. Here is a link to access to the auto entrepreneur registration form direct:

https://www.cfe.urssaf.fr/autoentrepreneur/CFE_Declaration

Up-date on 12th January: All back to normal this morning. It must have been a technical problem.

Up-date on Guichet Unique, the one stop shop to declare any business in France

Ten days ago, I talked to you about the Guichet Unique, a one stop shop to declare any type of business in France. This new online tool was supposed to be launched on 1st January. Well, surprise, surprise, the Guichet Unique is not working and it is likely to take a few more month before it does.

The launch of the Guichet Unique has been postponed until 1st February 2010. Members of staff at Centre de Formalites des Entreprises (CFE) have not been trained either to use this new tool… So just go the good old fashion way for now Chambre de Commerce, Chambre de Metiers and Urssaf.

Bonne Année 2010!

Bonne année à tous les lecteurs de Start Business in France. Some of you might have already taken a new year’s resolution to move to France, others are working on making their move to France a success. Not an easy task, but it is still achievable, provided you get support in your day to day effort.

So no ground breaking resolutions for me this year! I’m starting to a get a better idea about what readers and forum members are looking for. My aim for 2010 is simply to guide you through the almighty administrative nightmare, by providing you with plain practical advice, so you can concentrate on what is important: getting new customers and running your business.

As for 2009, I will keep you up-dated on news which could impact your business. I will also be adding more videos for forum members on hot topics such as: how to make your first turnover declaration, how to complete your income tax form for micro entreprises, how to create an account with Net Entreprises, etc.

I am taking a few days off to enjoy the kids’ holidays, but the forum will be back to its speedy answering mode from Monday.

Guichet Unique: One-stop shop for business creation opens on 1st January 2010

The inauguration of a one-stop shop for entrepreneurs is planned for 1st January 2010. The Guichet Unique will centralise all the paperwork required to start any type of business: commerçants, artisans, professions liberales, entreprises individuelles or limited companies (SARL and EURL).

Accessible from the Internet (www.guichet-entreprises.fr live on 1/01/10) but also physically through the Centre de Formalites des Entreprises (CFE at Chambre de Metiers, Chambre de Commerce and URSSAF), the guichet will provide:

• Information on how to start a business and the administrative process to complete, 
• an up-dated record of where your business registration stands,
• plus feedback on administrative requests for some professions such as artisans.

Would be entrepreneurs will be able to follow the progress of their business registration. Florent Tournois, technical advisor to Herve Novelli, explained “The Guichet Unique is creating a real guide in the administrative labyrinth”. Theoretically, the government committed to delivering results with deadlines while dealing with the business registrations, however not all functionalities will be ready by the 1st January.

Other administrative websites dedicated to business registration, such as www.lautoentrepreneur.fr will remain. Entrepreneurs will therefore have two different portals to register their business.

Warning: auto-entrepreneurs with 0€ turnover in 1st year switched to micro entreprise

The official literature states that without any turnover declared within four consecutive quarters, your auto-entrepreneur business will be automatically closed. It does not seem to work this way in practice, as auto-entrepreneurs who did not declare any turnover in their first year, are automatically being switched to a standard micro entreprise. The direct consequence being a call for social charges cotisations similar to a business in its second year.

URSSAF for instance will consider your business as being in its second year and will send you a yearly bill of 1368€. This does not even include the pension or CSG charges. So what should you do if you registered your business in January or Feburary 2009 and have not billed any customer yet? Your first option is to invoice a customer before the end of your first year, in order to stay in the auto-entrepreneur system. The second option is to close your business down ( cesser son activite). Your final option is to accept the switch over to the micro entreprise and to pay over 3000€ of social charges in the new year…

If you have not declared any turnover over the last year and receive a letter from URSSAF or RSI asking for a yearly cotisation, do get in touch with them. Both are usually very understanding and might help you close your business down.

Fake auto-entrepreneur registration website

I have already mentioned a few scams for auto-entrepreneurs, including fake invoices for business directories. I have for instance received another promotional offer from Telecom 118 designed like a formal invoice for 296€ (nice to see that the price has also increased by 30€ since last time!).

The latest scam is from a fake auto-entrepreneur registration web site called declaration-auto-entrepreneur.com. This site originally offered auto-entrepreneurs registrations for 49€. After being mentioned on a few websites, the offer has changed to state 79€ for registration and advice. As a reminder, the only official website is www.lautoentrepreneur.fr and the registration is free. If you look at the registration form on the fake site, you will see that there is quite a bit of information missing (including ayants droit, income taxe, accre) which would generate issues with your registration.

Strangely enough the name and location of the owner was updated from Belize to France, just after Gautier Girard mentioned the scam on his blog. Since his article, Gautier has received legal threats, but has also received the backing of the Union de Auto Entrepreneurs.

Auto-Entrepreneur turnover declaration - 31st January deadline

The next deadline to complete your turnover declaration is January 31st. Some of you have already received the form and starting to worry.

Over the Xmas holidays I’ll be working on a short video explaining how to complete this form. So you can all go back to more important things, such as Xmas and New Year preparations. There is no video release date, as I will also be taking some time off with my kids in the next couple of weeks, but it should be ready by early/mid January.

Topics to be covered in the auto-entrepreneur turnover declaration video

• How to complete the form step-by-step
• Reminder of the social charges and income tax rates
• How to deal with ACCRE
• Paper and online declaration

Back to last minute Xmas shopping…

How to complete your taxe professionnelle form

The taxe professionnelle form looks like your worst administrative nightmare. Even with a good level of French, you might struggle to complete it. The fact is that most French entrepreneurs call their accountant, as soon as they get the taxe professionnelle form! You might also have heard that this taxed was going to be cancelled, so how comes you have received the dawn thing!

The law to scrap the Taxe Professionnelle has not been voted yet, and most local authorities are seriously opposed to it, as it is a main source of revene for them. I will keep you posted as and when the new law is voted. In the meantime, here are a couple of tips to complete your form for new businesses.

Will you pay any Taxe Professionnelle this year?

• All businesses are exempt from taxe professionnelle in their 1st calendar year,
• Auto entrepreneurs are exempt from taxe professionnelle if they have opted for “impôt libératoire” or “régime micro fiscal”, i.e. income taxe paid at source,
• Businesses based in Zone Franche Urbaine or Zone (ZFU) will benefit from a 5 year exoneration,
• Businesses based in Zone de Revitalisation Rurale (ZRR) will also benefit from a 5 year exoneration.

Taxe professionnelle and auto entrepreneurs

Auto entrepreneurs having registered in 2009, will received their “Declaration de taxe professionnelle 2010” form. As a new business, you will have automatically benefited from the 1st year exoneration in 2009. The form you are being asked to complete is to assess your taxe professionnelle for 2010. Even though this tax is supposed to be cancelled in 2010!

Auto entrepreneurs having opted for “impot liberatoire” or income tax paid at source, will benefit from a 3 year exoneration of taxe professionnelle. However, you STILL need to complete and return the form. Simply check your business details to ensure that they are correct, then complete as follow:

• section A2, tick “creation d’etablissement”
• section B: enter your 2009 turnover in box 4 or 6,
• in box 22 add when you created your autoentrepreneur business
• sign and return the form to Impots

In doubt, call in at the Impots or your local Tresorerie, they will guide you through the form.

Auto-entrepreneur status to be extended to farming activities?

Consulted by the French government, the Societe des Agriculteurs de France (SAF) believes that expanding the auto-entrepreneur regime to farming activities would benefit the profession. A press release from SAF issued on 27th November requests for this new regime to be added to the “Loi de Modernisation de l’Agriculture”.

’‘The auto-entrepreneur status would be a positive factor for the development of new activities and thus increase jobs and income in farming. Therefore SAF suggested to the Governement that the auto-entrepreneur status be added to the new law of agricultural modernization which has competitiveness as a core objective”.

SAF believes the auto-entrepreneur would simplify the administrative burden for people choosing farming as a secondary activity. It would also set a higher status and better income for young farmers in pre-installation periods, enabling them to test their commitment, as well as their future partners. 

The auto entrepreneur status for farming activities will be discussed in 2010. This would be a good news for people wanting to register as landscapers, garden maintenance or nursery. 

Fake business directory invoices sent to auto-entrepreneurs

As I mentioned in a previous post, many auto-entrepreneurs are receiving unsolicited invoices for business directories and phone directories. The letters consist of promotional offers designed to look like formal invoices and range from 80€ to 957€.

There are NO compulsory business or phone directory registrations for auto-entrepreneurs. Chances are if you never heard from the business or phone directory, neither will you customers! Some ‘‘invoices” are being sent from companies based in Spain or Austria, another gievaway… Have a look at the samples below.

Examples of fake invoices for business or phone directories

Examples of scams or marketing campaigns of extremely bad taste:

• France Annuaire On-Line d’Entreprises 957€
• Registre des Societes Nouvellements Crees for 80€
• Annuaire Telecom 118 for 260€

Deadline to switch to the regime micro social: 31/12/09

If you have an existing business registered as an entreprise individuelle or micro entreprise, you cannot switch to the auto entrepreneur system. However you can decide to switch to the regime micro social, which will enable you to pay your social charges according to your actual turnover, as per the auto-entrepreneur. In order to switch over in 2010, you will have to send a formal letter to RSI or URSSAF by 31st December 2009. Here is how it all works:

Advantages of the Regime Micro Social

• Your social charges are paid according to your real turnover using quarterly declarations.
• Your social charges rate is similar to the auto entrepreneur scheme: 12% of your turnover for trade, food and accommodation, 21.3% for crafts or manual services and 18.3% for intellectual services.
• There is no lump sum to pay off in N+1 as per the regime normal. If you registered in January 2009 with the standard regime, you will have paid your cotisations along the year according to a general turnover estimate (about 3,000€). You will also have a “regularisation de cotisation” for 2009 payable in October or November 2010. This goes for your first two years in business and can be damaging if you haven’t saved enough for the regularisations.
• If your business has slowed down dramatically compared to 2008, your social charges contribution are still based on a good year, hence being tough on your cash flow. Opting for the regime micro social means that you will be paying as and when you are earning.

You cannot apply for Regime Micro Social if:

• You have a SARL, EURL or entreprise individuelle with regime reel simplifie
• You are VAT registered
• You are a profession liberale and related to URSSAF and CIPAV, i.e. consultants, developers, private tuitions, etc. This should however change in 2010.

How does the regime micro social work

Your social charges are paid on a quarterly basis; monthly declarations are expected to be working in 2010. You will declare your actual turnover and settle the social charges as follows : 12% of your turnover for trade, gites, B&B,  21.3% for crafts and manual services, 18.3% for professions liberales relating to RSI for their pension (i.e. driving school, sophrology, taishi, etc).

How to apply for the regime micro social

For activities relating to trade (shop, markets, online shops, B&B) and crafts, you can apply online on the auto entrepreneur website under the ’‘Optez pour le reglement simplifie des charges sociales et fiscales section’‘. Alternatively you can write to the the Regime Social des Independants with a recorded letter (avec accuse de reception from La Poste).

If you are a profession liberale (intellectual services) and relating to RSI, you can switch over in the same way. However if you are related to URSSAF and CIPAV for your pension, you cannot switch over yet. A new law has been voted, but we are still waiting for the implementation decree. It should take place in the first quarter of 2010 and I shall up-date you with the specific deadline on this blog.

Deadline to apply for the regime micro social?

The official deadline to apply is the 31st December 2009.

New auto-entrepreneur profile

According to Herve Novelli, secretary of state to small businesses, about 40% of auto-entrepreneurs registered since January 2009 have a quarterly turnover of 4000€, or 1333€ per month. Which leaves us with 60% with a turnover nearing zero or too small to represent a main source of income. Is that so surprising? Not really!

The auto-entrepreneur scheme has indeed made it easier for would be entrepreneurs to register their business and to assess their social charges. But a business remains a business, unless you have a clear view of who your customers are, how you are going to find them, what you are going to sell to them and at what price, you are going to struggle. I have come across quite a few French auto-entrepreneurs, who have registered their business, placed an advert in the local newspaper then wondered why nobody called them.

The auto-entrepreneur is a great system for first time entrepreneurs, but there is no need to hurry. Carry your market research, assess your competitors, do your marketing homework, assess how much money is required to launch and run your business, do a bit of pre-prospection, then register your business.

About 242 000 people have registered as auto-entrepreneurs. They can’t all be wrong, but I wouldn’t be surprised if they realised that starting a business meant more hard work than they thought.

Events: Entrepreneurs’ week 2009 - 16th-22nd Nov.

Many events are being organised across France this week to celebrate the entrepreneurs’ spirit. Have a look at this event map to find an event near you. Most Chambres de Commerce, Chambres de Metier and entrepreneurs network will organise an event, which could be the perfect opportunity to speak to business advisor’s about your project. This year’s Entrepreneur of the Year award went to Yves Guillemot founder of Ubisoft (video games).

Tip: What is a SIREN or SIRET number?

You’re working on a business project and everybody keeps asking for your SIRET or SIREN number: for quotes, for advertising, for partnerships, so what is it?

A SIREN number is your business’ unique ID number. This 9 digit number will be requested by all French administration dealing with you: URSSAF, RSI, Impot, etc. It is a proof that you are a fully registered French business, listed on the national business directory - répertoire national des entreprises. Your SIREN number will be issued by INSEE (the national institute of statistics), when you register your business.

So what is the difference between SIREN and SIRET? SIRET is a 14 digit number referring to each business location you may have (SIREN + 5 digits).

Your unique SIREN number should look like this if you are a limited company or are in a trading activity (commercant): RCS PARIS 453 983 245. RCS stands for Registre du Commerce et des Societes (i.e. registration via the Chambre du Commerce et de l’Industrie). For crafts and manual activities - artisans- registering with Chambre de Metiers, your SIREN number will look like this RC NANTES 234 987 456.

If you want to find out more about your competitors, write down there SIREN number or name, then have a look at www.societe.com.  You will find out when they created their business, number of employees, activity code. For limited companies, you will also have access to their financial results (turnover, profit or loss, etc).

How to register as an auto-entrepreneur video

Many English speakers living or moving to France have contacted me recently, as they felt lost and unsure about how to completed the auto entrepreneur online registration form. I have therefore hired the technical help of my other half and recorded a step-by-step video explaining how to register your business as an auto entrepreneur online.

You can now watch the auto entrepreneur registration video and understand the impact of all the choices you will make.

What will you learn in the auto entrepreneur registration video:

• Which activity do you relate to: activite commerciale, artisan, profession libérale
• How to get your health cover sorted :social security number, carte vitale, family members
• What is impôt libératoire and régime micro fiscal
• What will happen once you send your online form
• Who should you be contacting if you have any issue

After watching the auto entrepreneur online registration video, you will have a better understanding of all the choices available to you, enabling you to register online whenever you are ready. 

Watch the auto entrepreneur video and see what you think

Length: 45 mins

Business Trade shows in France

Attending an industry trade show is always a good source of information. It is an opportunity to meet potential new suppliers and partners, to assess your competition, to attend conferences and also to confirm the market trends in your sector.

Check out Salons Online for an up to date list of all the trade shows taking place in France. Search by sector or by town to find out about the key events for your business.
Examples of sectors covered: Building trade, tourism, IT, marketing, transport, hotels & restaurants, banking, health, weddings, etc.

site www.salons-online.com

Start Business in France Celebrating 1st year online

Launched in October 2008 to keep me busy for my maternity leave, Start Business in France has just celebrated its 1st year and is reaching an increasing audience. Over 20,000 visitors have read through an amazing 85,000 pages in this first year. Families moving to France from the UK, North American or even Australia are now finding some reliable information in plain English to help them start a business and a new life in France.

Needless to say that I am very pleased with the warm welcome I have received from existing forum members (280 members and counting) and visitors. My mind has been on overdrive over the last few weeks to search for new ways to help would be entrepreneurs moving to France, and I have come with quite a few new services, which you will discover very soon.

You may have noticed the new “Phone help” service. If you need to ask an expert specific questions to get over a roadblock, or would like to talk through your business ideas, concerns and issues to get you going - then please book a call. I will be taking a limited number of calls every week. I say limited, because I still have a day job as a professional small business advisor and 3 small children to look after.

Also in the pipeline are some business videos to help you with the auto-entrepreneur online registration form and explanations on what happens next. Other videos will be added on a monthly basis on various topics such as: how to set up your account with Net Entreprises to pay your social charges, how to make your auto-entrepreneur quarterly turnover declaration, etc. Send me an email if you would like to see specific topics covered.

The Auto-Entrepreneur practical eBook should finally be ready in November. I have been slightly snowed under with work recently and I have postponed the eBook publication for much longer than I would have wanted, but hey “C’est la vie”!

Finally, I would like to say a big thank you to my technical guru, Lee who runs the website design company Cinq Pages and PacketCurry  (and who also happens to be my other half), for all the hard work he puts on a daily basis to develop my site and find some great tools to make my life easier. There is no way I could have done so much in a year, if I also had to catch up with the IT skills…

I am hoping that the videos will help add more practical business information, but also add some personality or at least a proximity feeling to this site. So, all my thanks to existing forum members as well as visitors and keep reading…

For those of you using Twitter, you can follow me @ Valerie_50

How to benefit from Zero Charges on new employees recruitment

In December 2008 the Plan de Relance de l’Economie (economy recovery plan) launched a new initiative entitled “Zéro Charges”. Aimed at small and medium size companies with fewer than 10 employees, this scheme offered a 12 month exemption of employer’s social charges contributions “charges patronale” on new employees. Used by over 500 000 small companies so far, the deadline should be extended until June 2010.

Christine Lagarde, Minister of the Economy recently said on France Inter radio that she strongly hoped the “zero charge” scheme would be extended, allowing very small businesses “to receive a total exemption of charges for twelve months for any job created by 30th June 2010”. The law is currently being voted by the Conseil des Ministres as part of the “loi de finance 2010”.

\Zéro Charges completely exempts small businesses from employer’s social charges contributions (charges sociales patronales) on the hiring of new employees paid the minimum wage, also called SMIC. This financial help comes to about 185€ per month for a full time worker on minimum wage. The exemption then decreasing for salaries up to 1.6 SMIC. The Government is responsible for compensating the Social Security fund and unemployment insurance, as the employer does not pay expenses for his employee.

So how does it work and could your company benefit from this scheme? The applications criteria are flexible enough, as it applies to the hiring of a full-time or part-time, permanent (CDI Contrat a Durée Indéterminée) or fixed-term (Contrat à Durée Déterminée) contract of more than a month. It also applies to the renewal of a fixed term contract for a period exceeding one month, or for a CDD turning into a CDI. Interim contracts, however, are not eligible.

How to apply for “Zero Charges”?

If you are planning to recruit a new employee by the 31 December 2009 (or by 30 June 2010 once the law has been voted) download the form “Demande d’aide a l’embauche TPE Cerfa No. 13838’’ on http://www.zerocharges.fr or request a form from your local unemployment center - Pole Emploi. Complete and return the form to Pole Emploi, together with a copy of the work contract.

At the end of each quarter, you will have to send an up-dated form to Pole Emploi to calculate the financial aid. The form must be returned within 3 months following the quarter for which the financial help is requested.
What conditions must be fulfilled for benefit?

Zero charges applies to recruitment for SME

• Full-time hiring
• Part-time, permanent or fixed-term contracts hires of more than a month
• Renewal of a fixed term contrat or CDD (Contrat a Duree Limitee) for a period exceeding one month
• Transformation of a fixed term contract (CDD) into a permanent contract (CDI Contrat a Duree Limitee)
• ’‘contrat de professionnalisation’’ for job seekers aged 45 and over.

In order to qualify for this scheme the employer should not have preceded to a redundancy over the last 6 months for the post being filled by recruitment.
This article has been published in the November issue of TheFrenchPaper

Auto-entrepreneur: no compulsory registrations to business directories Annuaires

Many auto-entrepreneurs seem to be receiving invoices for business directories and phone directories. The letters come with a very formal invoice ranging from 250€ to 350€ and states that the registration is compulsory. These letters are extremely bad taste promotional offers and should be ignored. There are NO compulsory business or phone directory registrations for auto-entrepreneurs.

Example

Examples of scams or marketing campaigns of extremely bad taste:

• Annuaire Telecom 118 for 260 euros
• Registre des societes nouvellements crees for 80 euros
• The auto entrepreneur website also mentions an invoice coming from abroad.

Events: Auto-entrepreneur road show

François Hurel, president of the Union des Auto Entrepreneurs (UEA) has organised a road show across France to meet new and would be auto entrepreneurs. A couple of events have already taken place in Toulouse and Rennes, but it is not too late the attend the remaining 5 road shows in Aix-en-Provence, Grenoble, Lille, Strasbourg or Lyon.

Various partners will participate to these events including the Chambre du Commerce et de l’Industrie, Chambre de Métiers, banks, accountants, etc. 

• Aix-en-Provence 22nd October
• Grenoble 19th November
• Lille 26th November
• Strasbourg 3rd December
• Lyon 10th December

How to change or close down your auto-entrepreneur business

Discuss in the forum

If you have registered an auto-entrepreneur business in France and have decided to modify your main activity or to close the business down, you may now do so online. The forms have been added onto the official website www.lautoentrepreneur.com.

You might have noticed a mistake on your business registration papers, such as wrong surname, a spelling mistake, or you might have ticked the “conjoint collaborateur” option by mistake. Your personal situation might have changed too, if you recently got married or changed address. For minors changes like these, click on “Modifier votre situation ou votre activite d’auto entrepreneur”.  This form will also enable you to change your activity, for instance if you initially registered as an English teacher and end up selling British food online.

For those of you wishing to close the business altogether, click on “Cesser definitivement votre activite d’auto entrepreneur’’.

Form to close your auto entrepreneur business

Form to up date or change your auto-entrepreneur business

Auto-entrepreneur profile by Ciel

Discuss in the forum

Ciel, software provider for small and medium size businesses and subsidairy of Sage, has recently published a survey carried out on 817 auto-entrepreneurs using their solution “Ciel Auto-Entrepreneur Facile”. 

This survey confirms that the auto entrepreneur tends to be a 40 year old man providing services. The auto-entrepreneur scheme is a good match for services as these activities tend to require less investments, may not require an office and fit in with the maximum turnover threshold of 32 000€ per year.

What is very interesting is that 62% of these auto-entrepreneurs started their business without carrying out a business plan, a market research or asking for external advice. 55% self financed their new business with 500€ or less. So not so surprisingly the issues encountered included finding customer (43%) and calculating their selling price (19%).

Finally the survey confirms that existing auto-entrepreneurs work with a limited number of clients of have a limited number of sales, as 80% of them issued less than 10 invoices per month.

Download the full auto-entrepreneurs survey (in French) : 1et baromètre Ciel Auto-Entrepreneur.
Read the article on www.lentreprise.com

Potential problems for the auto-entrepreneur and entretien de jardin

Discuss in the forum

If you have registered your business as an auto-entrepreneur to design or maintain gardens read on, as you might have some bad surprises. Activities relating to “entretien de jardin” normally register with the Chambre de Commerce and pay their social charges to the MSA (Mutuelle Sociale Agricole ). So far so good.

While checking some information for new auto-entrepreneurs, I have been informed by MSA in Normandy, that they currently do not recognize this type of business and will therefore ask entrepreneurs to opt for the normal system.

So what does it imply? Basically, even if you have registered as an auto-entrepreneur, you will not be able to pay your social charges as a fixed rate of your turnover. Instead you will pay the standard “forfait” which amounts to about 3,000€ per year.

This is quite worrying as many people would not have registered in the first place if they had been properly informed. I would expect this issue to be addressed this autumn, as many new businesses will be affected. In the meantime do get in touch with your local MSA office to know where you stand.

New phone number for auto-entrepreneur helpline

The national helpline number for auto entrepreneurs changed on 3rd of August. The new number is 08 21 08 60 28 (indigo number - 0,12 €TTC/min). 

Your questions are handled by RSI and Acoss (national body for URSSAF). Monday to Friday 8am to 6.30pm

Auto-Entrepreneur deadline for turnover declaration extended until 10th August

This first declaration only applies to auto-entrepreneurs having registered before the 31st March 2009. You indeed have until the end of your second quarter in business to make your first declaration. So, if you registered after the 31st March, your first compulsory declaration will take place by 31st October.

The good news for the “early auto-entrepreneurs” is that you still have a few days left to declare and pay your social charges.

What insurance is best for a small business in France?

For many professions insurance cover is compulsory for all business and when it comes to apportioning liability for the self-employed (entreprise individuelle or auto entrepreneur)  there is no distinction between the business and yourself which means you need to protect yourself.  The following are the different types of insurance available to small business…

Assurance responsabilité civile professionnelle - professional liability

The responsabilité civile professionnelle covers you for acts that may cause damage to your customers, suppliers or third parties while working with or for you. The acts concerned are: professional misconduct, omissions or negligence, errors in your business advice and lack of technical assistance. This insurance is key to any business whether you are a translator (translation errors on medical terms for instance) or receiving customers in your workshop located in your home (to cover accidents).

Assurance décennale for the building trade

For regulated professions in the building trade such as builder, plumber, electrician and heating specialist, the law requires a minimum duration of cover for the work done as well as a minimum amount of compensation. The assurance decennale covers any defect that affects the quality of the work done and therefore makes it unfit for its intended use or purpose.

An assurance décennale will cover your work for 10 years and also protect against prosecution. In principle voluntary, this insurance has now become mandatory for all artisans who are required to repair problems which may occur up to ten years following completion of the work. The insurance premium for one year is calculated on your turnover and the number of employees. It is usually the most expensive insurance for artisans and costs from €2 000 to €3000.

This is usually offered as a single contract along with Assurance responsabilite civile professionnelle (professional liability). This type of insurance is not compulsory but recommended as it covers those things not covered by the assurance decennale, such as WHAT.

La garantie de parfait achievement

As the name suggests, it is a guarantee of completion of good quality. When handing over the building site to the customer, that later can list remarks of “reserves” on pieces of work which may not meet his expectations. The completion guarantee will cover problems occurring on these listed remarks, as well as any others for one year after the work has been completed, ensuring the artisan/builder repairs all problems reported during that year. This insurance is not compulsory.  If you have one for 10 years why would you have this one? Decennale is more for structural problem, this one is more for the finishing and defects which you can notice when handing over the building

Assurance multi risque et perte d’exploitation

This covers your business premises and your equipment - property, machinery, equipment and stocks – for damage caused by fire, water or storms, with the aim of allowing you to start your business again after a disaster.

If you want to cover yourself against loss of earnings, then you also have to take out an assurance perte d’exploitation – this will cover payment of wages, fixed costs such as electricity and phone, taxes and extra charges due to the accident, including hiring new material or buildings, publicity to find new customers, etc.

Car, stock and building assurance

If you are using your personal car or setting up your business at home, you will need to inform your insurer as these could have an impact on your home insurance policy. For people selling goods online and storing their stock at home, check whether your home insurance covers the value of your stock in the event of fire or floods. A premium might be requested to cover this.

Micro insurance for micro enterprises and auto entrepreneurs

Entrepreneurs de la Cité has recently launched micro insurance which is aimed at small businesses, such as micro entreprises or auto entrepreneurs. It offers a first aid insurance kit entitled trousse premiere assurance covering multi-risk (professional liability, accidents, operating loss) as well as health. The premium starts from €15 per month. In order to benefit from what are low rates, you will need to contact Entrepreneurs de La Cité via their partners - Boutiques de Gestion, Chambre du Commerce and ADIE.

Aviva also offers a cheap insurance to auto entrepreneurs from 15 to 18 euros per month.

More Information
Fédération Française des Métiers d’Assurance (FFSA): http://www.ffsa.fr
Groupe SMABTP: http://www.smabtp.fr
ORO BTP (insurance for the building trade): http://www.probtp.com 
Cité des Entrepreneurs: http://www.entrepreneursdelacite.org

Changes to the auto-entrepreneur regime for artisans

Hervé Novelli, the Secretary of State for SMEs has recently announced a series of measures that will mean increased regulation for auto entrepreneurs registered as artisans. While there has been no mention of a deadline, the new measures are expected to be implemented in autumn 2009.

The auto entrepreneur system has been seen by already established artisans as unfair competition. According to the Union Professionnelle Artisanale (UPA), the body representing more than 50 professional federations) and the Confédération Générale du Patronat des Petites et Moyennes Entreprises (CGPME), the organisation for small and medium-size companies), the threat of many new entrants to the market, some of whom do not have the required qualifications, is not fair on those already enrolled in the existing classic business structures.

As part of their push to limit the auto entrepreneur system, the president of the CGPME, Jean-François Roubaud, asked Prime Minister François Fillon to limit the auto-entrepreneur status regime to three years, after which it would be compulsory to join one of France’s classic business structures.

This request was rejected for small and medium sized businesses. However, Novelli has confirmed that the current system will be modified in the following ways:

Increased control of artisans’ qualifications: Auto entrepreneurs will have to prove their qualifications when registering their business. This will entail showing either a diploma that confirms official qualifications, proof of at least three years experience in the trade or a Validation des Acquis et Experiences, a diploma that takes a year to obtain and officially confirms an artisan’s level of experience. In practice this is nothing new since artisans were already required to have the necessary qualifications but these requirements will now be more strictly controlled than before. The method of verification has yet to be confirmed but it is likely to be carried out by the Chambre de Métiers.

How do you know whether your activity requires a qualification? Most regulated activities that relate to food preparation (baker, cook, butcher), the building trade (builder, plumber, electrician), maintenance (car mechanic, equipment repair), or manual services (florist, hairdresser, beauty therapist) require a qualification. Contact your local Chambre de Métiers for a full list.

End of the exemption from registration with the Registre des Métiers: Until now, auto entrepreneurs, were exempt from having to be listed in the registre des metiers or trade directory which lists all professional artisan. However, they will now have to register, via Chambre de Métiers, at a cost of about €130. Novelli has suggested that the extra cost will only be charged after the first three years of activity but there is yet no confirmation of this.

Students and pensioners will not be affected by these new obligations.

Practical tips for e-commerce in France

If you are about to start an e-commerce in France, selling and shipping goods in France and abroad, you might have already realized that packaging and posting costs are more expensive than in the UK. You will have a small disadvantage compared to your competitors shipping from England for instance.

Looking at La Poste prepaid offers such as Lettre Max,  you are looking at a minimum of 5 euros and at least 9 euros for Colissimos. French customers are used to pay at least 6 euros for P&P, but English customers are not so keen. So are there some cheaper options for small parcels?

Your best option is to buy your packaging and stamp your parcels from home. Cheap packaging can be bought online from Cenpac or Raja Group. Delivery costs are quite expensive, so my tip is to register with them in order to receive special offers. You should receive “free delivery” offers within days.

Sending parcels via colissimos and having to queue at La Poste to weight parcels could easily waist an hour of your time every day. The best option is to print your Colissimos papers and stamps from home.

Interest free loans and gurantees for your French business

It is getting more and more difficult for entrepreneurs to borrow money from the banks. Last week I mentioned the Prêt Création d’Entreprise (PCE) as the best scheme to garantee your business loan, for business with an investment below 45,000€. Today I will cover a few other schemes which could help you convince the bank manager to invest in your business:

• Garantee on business loan for women entrepreneurs - Fonds de Garantie à l’Initiaitve des Femmes (FGIF)
• Interest free loan via the Chamber of Commerce and their banking partners - Entreprendre En France network (EEF)
• Interest free loan for the unemployed - Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise (NACRE)

Fonds de Garantie à l’Initiaitve des Femmes (FGIF)

Women entrepreneurs can request a guarantee from the Fonds de Garantie à l’Initiaitve des Femmes (FGIF). This national fund managed by France Active will generate a guarantee of 70% on business loan up to 38 000€. The maximum guarantee will be limited to 27 000€ for loans over 38 000€. The FGIF guarantee will cost you 2.5% of the guaranteed amount. In order to set up the guarantee, your project will have to be approved by a committee held by France Active. Members of these commissions usually are bank managers, accountants and business advisers, acting voluntarily on behalf of their organisation. A standard application would include a market study and a financial plan, which France Active would help you complete. 

Entreprendre En France network (EEF)

Interest free loans are also available for businesses registering with the Chambre de Commerce et de L’Industrie (CCI) via their Entreprendre En France network (EEF). This network provides business advice with access to experts such as lawyers, accountants or notaires. They also have an agreement with most banks, enabling entrepreneurs to get an interest free loan ranging from 5 000€ to 7 000€, depending on the bank. You will have to present your project to the EEF committee (short market research and provisional plan) and answer a few questions related to your business. Questions vary from one project to another and could be related to your estimated turnover, your stock and suppliers, your marketing strategy, etc. Get in touch with a business adviser from your Chambre du Commerce, who will brief you and help you complete the dossier.

The Chambre de Métiers has a similar initiative and provides interest free loans for artisans. Regional conventions are signed with several banks and loans may vary from 5 000€  to 11 000€. Once again, get in touch with your local Chambre de Métiers to check which banks have a partnership and what is the average loan.

Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise (NACRE)

If you are currently working on a business idea but are still registered with Pole Emploi (former ANPE), you may also benefit from NACRE - Nouveau dispositif d’Aide à la Création et à la Reprise d’Entreprise. This new scheme launched last April by the Governement, enables you to benefit from the free support of a business adviser, as well as the ability to request an interest free loan called “prêt d’autonomy” ranging from 1 000€ to 10 000€ and reimbursable over 5 years. Business advisors from the Boutiques de Gestion, Chambre de Commerce or Chambre de Métiers have been selected to help the unemployed start their business. According to your personal situation, they will help you complete the market research, complete your financial and provisionnal plan and assess the various help you may be entitled to. They will also help you prepare your file for the committee who will allocate the interest free loan.

You are eligible for NACRE if you:

• are unemployed with benefit
• have been unemployed without benefits for at least six months over the past 18 months
• are a single parent receiving the ‘Allocation Parent Isole’ (API)
• are receiving the “Revenu de Solidarité Active” (RSA former Revenu Minimum d’Insertion RMI)
• are unemployed and over 50 years old

Aide aux Chomeurs Créant ou Reprenant une Entreprise’ (ACCRE)

Finally, check whether you are entitled to the social charge exoneration ‘Aide aux Chomeurs Créant ou Reprenant une Entreprise’ (ACCRE). Under ACCRE, during your first year of business your social charges will be 25% of what you would otherwise pay. In the second year this figure rises to 50% and in the third year 75%.  The eligibility for ACCRE is similar to those for NACRE listed above. The ACCRE application form is available online or at the Centre de Formalités des Entreprises and should be returned to URSSAF within 45 days of your registration. ACCRE will be extended to year 2 and 3, provided you remain within the yearly turnover limit of 32,000€ for services and 80,000€ for trade.

Now you may be thinking “that sounds like a lot of paperwork to me!”. Fortunately all these committees will request the same information, which usually comes down to a basic market research and a financial plan. The good news is that you can add several scheme together. For example, let say that you plan to buy a restaurant and have an overall investment of 43 000€. Let say that you are investing 20% of that amount, you could position a prêt création d’entreprise for 7 000€, an interest free loan with EEF for 5 000€, and a NACRE loan for another 7 000€. This would leave you with a bank loan of 15 400€ on which the PCE would generate a guarantee for 70%. You would have considerably reduced the risk for the bank, hence having more chance to secure your business loan.

Useful websites
http://www.pce.oseo.fr
http://www.franceactive.org
http://www.entreprendre-en-france.fr
http://www.apce.com

How to buy or sell a business in France

If you are looking for a business to buy in France or trying to sell yours, have a look at www.reprise-entreprise.fr and www.cession-commerce.com. These web sites are regularly up-dated with new offers and enable you to research by location (mainly regions) or by activity.

• www.reprise-entreprise.fr includes IT and communication, tourisme, building trade, finance and shops.
• www.cession-commerce.com is more focused on shops, hotels, restaurants and camping sites

Also check with your local Chambre de Metiers and Chambre de Commerce who are both trying to facilitate the sale of businesses with their “Transmission reprise” programme:

• Artisans transmission reprise
• Trade & industry Chamber of Commece

Auto-entrepreneur profile

An up-dated profile of the auto-entrepreneur has been revealed by the Caravane des Entrepreneurs. Every year, this road show visit about 90 towns through France, Switzerland and Belgium to advise would be entrepreneurs on how to start their business. The survey carried out on 705 auto entrepreneurs in 17 locations confirms that the average auto entrepreneur is a 40 year old man providing services.

Here’s a more detailed profile:

• Average age of 40 for women and 42 for men
• Out of 750 would entrepreneurs, 52% were unemployed, 22% were employees and 15% were either studiants, retired or civil servants
• 45% were women
• 57% of activities are related to services, 17% to intellectual services (i.e. professions libérales such as consultant, programmer, writer, private lessons), 16% with mixed acitivites and 10% for trade;
• Auto entrepreneurs are attracted by the simplicity of this new system (37%), and low charges (15%);
• 85% of these auto entrepreneurs have not received any advice regarding their business and found the information online (30%) or via the official website http://www.lautoentrepreneur.fr (13%). No mentions of accountants or chamber of commerce

Amongst the reason for registering as an auto entrepreneur, 66% wanted to create their own job, 15% were testing an idea, and 13% aim to increase their revenue.

About 20% of these auto entrepreneur do not know how they planned to develop their activity in the long term - remain auto entrepreneur, start an entreprise individuelle or remain employed. More worryingly one third of these entrepreneurs had no idea about how much revenue their new activity will generate. This auto entrepreneur survey will be updated by the end of the road show. I will keep you posted on the final findings.

What is a PCE - Prêt Création d’Entreprise

As France is hit by recession it has become more difficult to borrow from banks to fund the starting up of a business. Banks try to limit their risk when investing in new businesses. However there are several schemes available which will help you reduce the amount you need to ask for as well as satisfy the bank’s desire to lower its risk. These schemes range from interest free loans, guarantees and exonerations that should hopefully make the difference in securing your investment. The most succesful scheme to help you secure your investment being the Prêt Création Entreprises (PCE).

If your overall investment is below €45 000 your bank manager will likely mention Prêt Création Entreprises (PCE). This small business loan, ranging between €2,000 to €7,000, is issued by OSEO, the national banking organisation, and generates a guarantee of 70% on your main business loan.

How does it work? The PCE has to be associated with a business loan from the bank of at least twice its amount – so a PCE loan of €7 000 requires a business loan from the bank of at least €14 000. OSEO issues a guarantee on your bank business loan and commits to reimbursing this loan to your bank if your business came into administration or receivership. The interest on the PCE varies on a monthly basis and was 4.67% at the beginning of June.

New English paper launched in France today - The French Paper

If you have been missing the French News, you will be pleased to hear that a new monthly national newspaper for English speakers was launched today. Available from all newsagents and supermarkets, The French Paper covers essential news, must-read stories, lively comment, expert advice and useful information.

The ‘main paper’ has the latest news from across the country, with expert comment and practical advice. The ‘Living’ section covers anything related to living, from food and wine to travelling and culture. A whole section is also dedicated to ‘Kids’ to cater for the growing number of families settling in France; and is packed with practical financial advice and stories about running a business or being employed in France.

I will be joining this new venture by writing regular columns in the ‘Work & Money’ section, on running a business or being self employed in France.

The French Paper will also provide entrepreneurs with a new tool to reach thousands of English speakers visiting or living in France.

How to register a business to sell on French markets

Discuss in the forum

In order to sell on French markets you will need to get a “carte de commerçant ambulant” from the sous préfecture and register your business with the Chamber of Commerce and Industry. So how do you go about getting this card?

1. Contact your local préfecture or sous-préfecture and ask for a carte de commerçant ambulant. A temporary certificate entitled attestation provisoire, valid for 30 days will be delivered to you.

2. On reception of your temporary certificate, go and register your business at the Centre de Formalités des Entreprises at the Chambre du Commerce et d’Industrie. The extrait KBIS, official document confirming the creation of your company, will be posted to you within 10 days.

3. Go back to the préfecture with your extrait KBIS and attestation provisoire in order to request your final carte de commerçant ambulant which will be valid for 2 years.

4. Renew your carte de commerçant ambulant every 2 years at the préfecture

In order to get a spot in your local market, you will need to get in touch with the “placier” at the mairie. This person is responsible for managing all existing sellers, allocating new spaces and dealing with potential issues. Get in touch with him in the first place, to ensure that there is still some space available. Some markets refuse to take new sellers, if there already are several traders with the same activity. A market spot is charged anything between 1 to 5 euros per meter.

This card is free for now. A new law has been voted, which will enable the Centre de Fomalites des Entreprises at the Chamber of Commerce to manage the card in the future. However the new law will not be effective until the “arrete” is published, probably by the end of the year.

Auto-entrepreneur check list

Discuss in the forum

The new auto-entrepreneur scheme launched by the government last January has seen more than 2000 business registrations per day. But not only has it generated lots of interest, the scheme has also created a few problems. Here’s a check-list to make sure you’re covered.

Auto-entrepreneur is a pay-as-you earn system that offers an easy registration process and the ability to pay your social charges and income tax based on a fixed rate of your turnover. The purpose of the auto-entrepreneur scheme is to make starting a small business simpler and less financially demanding in the early years. It is also a low risk option to testing your market because if you do not sell anything, you do not pay any social charges.

Auto-entrepreneurs are not allowed to be VAT registered and have a yearly turnover limit of 32,000€ for services and 80,000€ for trade. Social charges represent 18.3% of turnover for professions libérales, 21.3% of the turnover for services and 12% for trade. Income tax will add an extra 2.2%, 1.7% and 1% respectively.

However, the success of the scheme has caused some teething problems. As the number of registrations has been so high the Régime Social des Indépendants (RSI) and URSSAF have a huge back log of new businesses to process. This has resulted in the deadline for the auto entrepreneurs’ first quarterly turnover declaration to be extended until July 31. By this date you will have to declare your turnover to date (quarter 1 and 2, according to your registration date) and pay the relevant social charges (as per the rates mentioned above)

As well, many businesses have been given the wrong activity code prompting them to contact INSEE to have it amended. Each business in France is classified under an APE or NAF code (Activité Principale de l’Entreprise); you will find this reference on your official business papers sent to you by INSEE once registered. For instance hairdressing and beauty treatments would come under 96.02. This reference would be used by all business directories as well as the impôts, urssaf, etc.

So what should you be looking at if you have just completed your registration or are about to do so?

If you are an artisan double check whether any qualifications are required for registration by contacting the Chambre de Métiers. Activities such as plumbing, building or hairdressing require a CAP or BEP qualification, the equivalent to an apprenticeship. Alternatively, three years experience can replace your qualification requirements. For someone who is self employed, proof of work such as three years’ worth of pay slips or accounts is sufficient evidence of your experience.

Check whether you are entitled to the social charge exoneration ‘Aide aux Demandeurs d’Emploi Créant ou Reprenant une Entreprise’ (ACCRE). Under ACCRE, during your first year of business your social charges (cotisations) will be 25% of what you would otherwise pay. In the second year this figure rises to 50% and in the third year 75%. Your first year social charges with ACCRE will be in the region of 1,000€. The auto entrepreneur rates will apply once your ACCRE exoneration is over. So far the exoneration only applies to auto entrepreneurs registering after May 1, 2009.

You are eligible for ACCRE if you:

• are unemployed with benefit
• have been unemployed without benefits for at least six months over the past 18 months;
• are a single parent receiving the ‘Allocation Parent Isole’ (API);
• are receiving the “Revenu Minimum d’Insertion” (RMI)

The ACCRE application form is available online or at the Centre de Formalités des Entreprises and should be returned to URSSAF within 45 days of your registration. ACCRE will be extended to year 2 and 3, provided you remain within the yearly turnover limit of 32,000€ for services and 80,000€ for trade

Once you have registered your business online you should receive your official papers from INSEE with your SIRET number within two weeks. Then return to the Auto Entrepreneur website and complete the second registration step by creating your account with Net Entreprises. This will enable you to make your turnover declarations and social charges payments in the future.

Businesses switching to régime micro social: 1st declaration by 15th May

Existing businesses having switched to the régime micro social by the 31st march 2009 will have until the 15th May to make their first turnover declaration (instead of the 30th April). This first declaration will cover your 1st quarter 2009.

You will need to go back to the official auto entrepreneur website and go to “s’incrire pour declarer et payer”. Follow the process to enter your SIRET number and personal details, as well as the IBAN number for your business bank account. Once you validate this registration, you will have to complete and send a copy of the “autorisation de prélèvement” to your bank, to enable automatic bank transfers when you will declare your turnover.

After completing the online registration to declare and pay, you should be able to make your first turnover delaration within 24 hours. Go back to the auto entrepreneur site and click on “declarez et payez”. Log in and enter your quarterly turnover, before validating the percentage of social charges and proceding to the bank tranfer.

Auto Entrepreneur: Deadline for 1st quarter declaration extended

Auto entrepreneurs having registered their business in the first quarter of 2009 will have until 31st July to make their first quarterly turnover declaration. It appears that the accounts used by the RSI and URSSAF are still not activated!

This will explain why you will get an error message when logging into your account to make your turnover declaration. The RSI recommends to wait until you receive a notification to process your quarterly declaration.

I will keep you posted on this subject as and when it happens.

120,000 auto entrepreneurs registered so far

The Government was hoping to generate about 200,000 businesses in 2009 with the auto entrepreneur scheme. This target should easily be reached, as 120,000 people had already registered by 31st March.

The ACOSS (Agence Centrale des Organismes de Securite Sociale) has established a profile of these auto entrepreneurs:

• 70% of auto enrepreneurs are men
• Average age of 40 years old
• 8% of auto entrepreneurs are pensioners
• 2/3 of activities relate to services and trade

Cities leading the way for AE registration include Paris 5.5%, Marseille 5%, Nice 3.8% and Toulon 2.6%. The five most represented activities are:

• Business adviser “Conseil pour les affaires et autres conseils de gestion”
• Various services for individuals “Autres services personnels’‘
• Market stalls ‘‘autres commerces de details sur eventaires et marches’‘
• IT programmers “Programmation informatique”
• E-commerce “Vente a distance sur catalogue specialise’‘

This fits in with the profile of people using the Start Business in France forum and blog, although I am quite surprised by IT programmers making it to the top five.
 

How to close your French business down

You might want to close your business down because you are retiring, going back to the UK or because the activity is no longer viable. Whatever the reason, here is a brief overview of the official steps required to close down an entreprise individuelle.

Start by contacting the Centre de Formalité des Entreprises where you initially registered (Chambre du Commerce, Chambre de Métiers, URSSAF or Greffes du Tribunal) and ask for a “formulaire de cessation d’activité”. Complete the form within 30 days of the activity actually being stopped and indicate the date of termination. Your company will then be removed from, the registre du commerce et des sociétés, répertoire des métiers, etc. according to your activity.

Get in touch with the Trésor Public and the Régime Social des Indépendants (RSI) in order to settle down your accounts. The Trésor Public will be looking into your income tax and VAT. When shutting down your business, your profit will become taxable. You will therefore have 60 days to inform them of your turnover and profit or loss for the ongoing year. If you are VAT registered you will settle your accounts by filling your last “declaration de TVA” within 30 days for the régime réél normal or within 60 days for the régime réél simplifié.

The RSI will calculate your contributions owed for the year and will deduce the social charges you have already paid. You will be reimbursed if you have overpaid, or you will have to settle the outstanding balance. As a rule of thumb, every quarter that is started is due, even if this is only the second day in. It is therefore best to plan to close down at the end of a quarter whenever possible. If you have some difficulties in settling down the outstanding balance, ask for payment facilities as the RSI is usually quite understanding.

Also remember to get in touch with the body collecting and managing your pension to settle the outstanding charges.

Closing down a SARL or EURL is more involved, so it is best to ask your accountant to handle it (complete the bilan and compte de resultat, insertion in the legal publications, etc.). The procedure will also differ and be more complex if you have employees. Once again contact an accountant to ensure you follow the latest guidelines for making someone redundant.

Finally you might want to close down temporarily in order to restart your activity one year down the line. This process is called “cessation temporaire d’activité” and can be done for two years for a limited company and one year for an enterprise individuelle, costing respectively 140€ and 70€.

Seminar: How to become an Auto Entrepreneur – 17th April in Saint-Lô, Normandy (50)

I will be holding a seminar on how to start your business as an auto entrepreneur on behalf of the Pépinière d’Entreprises. This event will be held in Saint-Lô (Normandy) on the 17th April.

Seminar content: How to set up your business as an Auto Entrepreneur
• Auto entrepreneur overview
• Social charges & income tax
• Accountancy rules
• How to complete the registration form
• Questions & answers

Auto entrepreneur seminars in Saint-Lô
• Friday 17th April : 9am to 12 am
• 20€ per person

About the Pepinière d’Entreprises
Sygma Energies 50 is an association funded by local authorities and European Funds (FSE). Every year, our team of 4 business advisers helps over 650 people wanting to start their company in the Nord Cotentin (From Cherbourg to Carentan).

To register for this event call Valerie or 02.33.88.46.18 or (JavaScript must be enabled to view this email address)

Selling on French Markets: New procedure for the Carte de Commerçant Ambulant

In order to set up a stall of French markets you will require a “carte de commerçant ambulant”. This card used to be requested at the Préfecture, but a new law has just been implemented to simplify this process. From now on, you will have to send a recorded letter “lettre recommandée avec accusé de réception” to the centre de formalités des entreprises (CFE) handling your activity. For instance if you are selling goods, this would be the Chambre du Commerce and for cratfs this would be the Chambre des Métiers.

This new law also applies to auto entrepreneurs wanting to sell on markets. The “carte permettant l’exercice d’une activité commerciale ou artisanale ambulante” will be delivered within a month provided you sent all the requested information. For new businesses it will be issued within a month of your registration and will be valid for 4 years.

Source : décret n°2009-194 18th February 2009, Journal officiel 20th February 2009.

Professions libérales & auto entrepreneur: Ready, steady, Go!

As mentioned in a previous post, there has been a disagreement between the Government and CIPAV, which prevented the professions libérales from registering as auto entrepreneurs. This issue has finally been settled and the law enabling the professions libérales to opt for the regime micro fiscal has been published in the Journal Officiel on 18th February 2009.

If you were planning to register as a consultant, fitness coach or translator you can therefore proceed to your registration online or by going to the Centre de Formalités des Entreprises (CFE) at your local URSSAF office.

Alphabetical list of activities affiliated to CIPAV
map of activities affiliated to CIPAV

As a reminder, social charges will represent 18.3% of your turnover. If you decide to opt for the regime micro fiscal, your income tax will represent an additional 2.2% of your turnover.

Source : art.34 de la loi n°2009-179 17th February 2009, Journal officiel 18th February 2009

TIP: Regional market trends

INSEE the national institute of statistics publishes some great market trends reports, which you can read online for free. You can even subscribe to email up-dates for your region.

These are a great source of reliable information and cover various topics such as local economic trends, unemployment rate, tourism, etc. Here is a sample of conjecture economique for Poitou Charentes.

Choose your region and drill drown…

You have registered as an Auto Entrepreneur, what next?

Discuss in the forum

First of all, congratulations on taking a big step and becoming a “French entrepreneur”. You managed to register online on the official auto entrepreneur website and you are now wondering what to expect and what do next? 

Your registration form will automatically be sent to:

• INSEE who will issue your SIRET number (14 digits),
• Régime Social des Indépendants (RSI) who will collect your social charges
• Trésor Public or Impôts, if you have opted for the regime micro fiscal

You should receive your company’s official papers with your SIRET number within 10 days.  If you did not have a carte vitale, the RSI will contact you to request the missing information enabling them to issue your carte vitale (passport, marriage or PACS certificate if you plan to add your other half, etc). 

How do I declare & pay my social charges?

On receipt of your SIRET number you will need to register with Net-Entreprise in order to declare and pay your social charges in the future. Go back to the auto entrepreneur website, click on “Déclarer et payer” and enter your personal details. Opt for “Net Micro” when registering. You will need to enter your bank details in order to make your future payments by bank transfer or “télérèglement”. You can also download the form and send it by post.

As the AE scheme has just been launched, you will not be able to pay your social charges on a monthly basis to start with. All declarations and payments will be made on a quarterly basis until June 2009 (I will keep you posted if this takes longer). 

If you have opted for the quarterly payment, you will have to log in and declare your turnover by the 30 april, 31st july, 31 October and 31 January at the latest. If you have opted for the monthly payment, you will have to declare by these deadlines too until the system is fully up and running.

Net Entreprise will automatically calculate your social charges cotisations and income tax, which you will be able to pay online. A receipt will be issued once you have completed this process.

Conjoint-collaborateur: working with your other half

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You plan to start a business in France, and would like your other half to help you out with or without payment – is this legal? The answer is no unless they are registered.

Whether you are an artisan, commercant or profession libérale, your partner has the choice between three option: employee, collaborator or associate.

The first option is to employ your partner. This can work whatever your marital status or company type. It offers the highest level of protection, as the employee is entitled to all the benefit of the employment law, such as pension, paid holidays, ongoing training, etc. Unfortunately, this option is also the most expensive one for the company.

Many small businesses such as artisans and commeçants opt for the second option entitled “Conjoint collaborateur”. Being a conjoint collaborateur enables you to make individual pension contributions. You will not be required to make health insurance contributions as you will be covered as a beneficiary of your spouse’s contribution. You will also be entitled to medical cover as well as maternity allowance.

What are the criteria to become a conjoint collaborateur? This status applies to owners of an enterprise individuelle, as well as managing directors or majority shareholders of a limited company with less than 20 employees (SARL and EURL). You will have to be married or in a civil partnership (PACS) and will need to participate in an effective and regular way in the business. For instance by handling the accountancy, customers estimates, orders and invoicing, etc. You will not be entitled to a salary, but could still carry another activity elsewhere such as self employed or employee.

Your last option is to become a “conjoint associé” within a limited company. In order to be eligible for this status, you will need to invest in the company’s capital in cash or in kind by bringing some asset. As a conjoint associé, you will be individually affiliated to the independent workers’ social security regime - RSI (Regime Social des Indépendants) and entitled to the same benefits as your spouse. The downside of becoming an associate is that you will become liable for the company’s debts up to the value of your contribution.

Meeting an accountant will help you estimate the amount of the social charges contributions for each option and assess which one works best for you.

TIP: What is your business APE or NAF code?

Every business in France is classified under an activity code entitled APE - Activite Principale de l’Entreprise - or NAF code.  When registering your company, you will need to indicate which is your main activity. Here is the APE list in English up-dated by the national Institute of statistics INSEE in January 2008.

For instance, if you sell online your APE code would be 97.91B - vente a distance sur catalogue specialise. Another example, if you plan to become an IT consultant specialised in hardware & software your APE code would be 62.02 - conseils en systemes informatiques.

PS: Don’t worry too much about finding the exact APE code. In doubt call the Centre de Formalite des Entreprises at Chambre du Commerce, Chambre de Metiers or Urssaf according to your business, they will give you the answer!

Start business in France is back online

Not in my wildest dreams did I expect my start business in France blog to get so many visitors (1000’s each month) and because I’m in this for the long hall, I (well actually my other half Lee) needed to upgrade the site and forum software to cope and grow with the demand. Old forum posts have been moved to the new forum and old blog comments will be moved in the next few days. The down side to all this is that people with forum accounts will need to create a new one - but hey it only takes 30 seconds. I hope I haven’t, but if I’ve deleted your latest question by mistake, then please ask again and I’ll answer it shortly.

Tracking down the unanswered questions on the old blog and forum was a tricky and long process, which lead to some questions being answered with a 2 week delay.

So lets start 2009 in an efficient way! Thanks to my other half Lee for this top-notch blog and forum with all the whistles and bells any serious blogger might require.

Thanks for you patience.

-Valerie

Can a Profession Liberale register as an Auto Entrepreneur?

Discuss in the forum

An average of 2,000 people have been registering as auto entrepreneurs on the official website www.lautoentrepreneur.fr since the 1st January 2009. There’s also been an issue with people wanting to register as professions liberales. Indeed the law enabling the registrations of services based activities, normally registered with Urssaf, such as consultant, teacher or telework, hasn’t been voted by the Senat or the Assemblee Nationale yet.

The law entitled “Loi de Relance” will be voted by mid February. In the meantime it implies that nobody can register as an auto entrepreneur in the profession liberale sector.

Hervé NOVELLI – secrétaire d’Etat for small & medium size companies – explained the situation in a short interview: Auto Entrepreneur and Professions Liberales . He confirmed that the legilsation had been drafted, but still needed to be voted by the Senate and National Assembly ‘during the course of February’.

How to switch to the Regime Micro Social

Discuss in the forum

If you have an existing business registered as an entreprise individuelle in France, you cannot switch to the auto entrepreneur system. However you can decide to switch to the Regime Micro Social which will enable you to pay your social charges according to your actual turnover.

What are the advantages of the Regime Micro Social?

• Your social charges are paid according to your real turnover, thanks to the monthly or quarterly declarations
• The social charges rate is similar to the auto entrepreneur scheme: 12% of your turnover for trade, food and accommodation and 21.3% for services
• No lump sum to pay off in N+1 as per the regime normal. For instance if you registered in January 2008 with the standard regime, you will have paid your cotisations along the year according to a general turnover estimate. You will also have a “regularisation de cotisation” for 2008 payable in October or November 2009. This goes for your first two years in business and can be damaging for your business if you haven’t saved enough for the regularisations.
• As we are entering into recession, this will help your cash flow. Why pay cotisations based on your 2008 turnover if your actual activity is slowing down.

How does the regime micro social work

When switching over you will decide whether you wish to pay your social charges on a monthly or quarterly basis. You will then declare every month/quarter your actual turnover and settle the right amount (12% for trade and 21.3% for services). This process should be available online.

Where to apply for the regime micro social

If you have an existing business in the trade or craft sectors, you can apply online on the auto entrepreneur website under the Optez pour le reglement simplifie des charges sociales et fiscales section. Alternatively you can write to the the Regime Social des Independants with a recorded letter (avec accuse de reception from La Poste).

Apparently the online form doesn’t take profession liberales (services), so you will have to contact the RSI to switch over. Call to check the procedure to follow, then send you recorded letter.

Deadline to apply for the regime micro social?

Normally you should apply before the 31st December. As the system is fairly recent the deadline has been exceptionally extended to the 31st march 2009. This also means that there will be a time of adaptation and likely errors… At least you will know the exact amount of social charges you have to save in the meantime!

Get your copy of the Auto Entrepreneur Kit

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Following the launch of the Auto Entrepreneur scheme by Herve Novelli in Paris this week, the Auto Entrepreneur kit can now be downloaded from the official website http://www.lautoentrepreneur.fr.

Click on Documents utiles and you will be able to download the following pdf files:

• Factururier : template for your invoices
• Livre recettes-achats: template for your accountancy book keeping
• Registration form
• L’auto entrepreneur en 10 points
• L’auto entrepreneur guide

As mentioned before, registration will start on the 1st January 2009 on http://www.lautoentrepreneur.fr

TIP: Where to register as an Auto Entrepreneur

Discuss in the forum

A press release issued by the Government today states that you will be able to register as an auto entrepreneur on the official web site www.lautoentrepeneur.fr from the 1st January 2009. The Auto Entrepreneur registration process should take about 15 minutes.

Herve Novelli – secrétaire d’État chargé du Commerce, de l’artisanat, des petites et moyennes entreprises, du tourisme et des services – will be holding a press conference on Thursday 18th December in Paris to present the auto entrepreneur scheme. The decret d’application explaining the remaining details should also be voted this week.

I’ll keep you up-dated on the final details we’ve all been waiting for.

Can an existing micro entreprise become an auto entrepreneur?

Discuss in the forum

This is the most recurrent question I have come across over the last 2 months. The official answer is no, but you still can switch over to the regime micro social until the 31st march 2009. This regime actually enables you to pay your social charges based on a fixed rate of your actual turnover as per the auto entrepreneurs.

The loi de modernisation de l’economie has reviewed the Regime Micro Social system which was created in march 2007 and has up-dated it to match the auto entrepreneur system. So how does it work? From 1st January 2009, you will be able to declare and pay your social charges on a monthly or quarterly basis, based on your actual turnover. Your social charges will represent 12% of your turnover for trade, food and accommodation and 21.3% for services.

So how can you switch over to the regime micro social? Get in touch with the Regime Social des Independants (RSI) or complete the auto entrepreneur form online as the internal procedure of the RSI consists in closing your business down to restart it as an AE. Complete the 1st part of the form with the details of your existing company (SIRET). The new account will still be using the same siret number, but social charges will then be based ona fixed rate as per the AE scheme.

Now bare in mind that if you have created your company let say in January 2008, you currently pay your social charges based on a forfait (set amount). This means that you should have paid about 3,000 euros for a full year, but you will have a rappel de cotisation to pay by September or October 2009. This remaining lump sum will be calculated on your actual turnover for 2008. So even if you move to the regime micro social, you will still have to pay that lump sum in Q4 2009. If you have any doubt, call the RSI; they will confirm how much that lump sum is, once you have confirmed your turnover for 2008.

TIP: How to register your business trademark in France

Discuss in the forum

You are all set to start your business in France, but you would like to protect your trademark or brand name in France. How do you go about it? The first step is to ensure that the name you have thought of isn’t already taken. Go to Ici Marques, click on “recherche par marque” and type your trademark, you’ll know within second if the name has been registered and for which type of businesses.

The next step is to register your brand or trademark with the Institut National de la Propriete Intellectuelle – INPI. You can register your trademark online (site in English) or fill in the form and return it by mail

It will cost you 200€ for an online registration with up to 3 categories and 250€ for a paper registration. A category refers to types of activities for which you wish to protect your trademark, for instance toys, clothes, musical instruments, cosmetics, etc. Extra categories will cost you an extra 40€ each.

To protect your trademark, you can fill in the trademark online registration form on the INPI web site.

If you are looking to register a patent, the INPI is also the place to go.

How will you market your business in France in 2009?

Discuss in the forum

It’s amazing how quickly things can change! Last October I wrote an article on how to market your business in France to English people. A visitor posted a comment today saying how interesting it was, so I re-read the article and I thought, “It WAS interesting, but I wouldn’t make quite the same recommendations today!”

Why is that you may wonder? Well, at the time I mentioned, “When starting your new business in France, your first source of income will most likely be the English community living in France.” Since then the credit crunch has hit us all and the pound has reached a low level against the euro, with 3 consequences:

• Your English customers will be spending less in 2009
• You will have to target French customers
• You are likely to review your marketing spend too

Since then French News has also gone bust, leaving only one national English newspaper, The Connexion, to give you maximum exposure across France.

So how could you spend your marketing euros in 2009?

Online marketing

• Review your website content. Engage with your customers, review your text and make it personal. Add a blog whenever possible so that potential customers get to know you and your work.
• Dig into your web stats. Install Google Analystics and become inspector Cluzo: where do visitors come from (i.e. referral websites), which keywords did they use to find you, which content is of interest to them? My other half who runs Packet Curry is addicted to his stats and won’t be spending money again with sites, which didn’t bring him enough visitors.
• Ensure you get value for money for your advertising. Gone are the days when you could place an ad on a website without knowing the number or monthly visitors (overall but especially on the section where you are advertising), what is the average open rate of the newsletters where you planned to place your banner, etc.
• Ensure your business is listed on all the free business directories

Offline marketing

• Dig into your stats. Is your customer base local or national? Are you advertising in magazine that reflects this?
• Don’t dismiss the local free newspapers such as Top Annonces . They are a cheap way to reach French customers.
• Test promotional offers. Give some discount codes and see which ones work best.
• Have some flyers printed and place them where your customers are likely to go.
• Get in touch with your local French newspaper whenever you have some interesting news (e.g. been in business for a year, you have fully integrated to your local community, you are sponsoring a local sport team, etc).

Networking

• Network with other English entrepreneurs in your area, meet up and swap ideas & advice. Post a thread on the English forums to get things rolling.
• Get in touch with the Chambre de Metiers or Chambre de Commerce where you registered. They often have business or entrepreneurs clubs, where you could meet French entrepreneurs while improving your French.

These are a few ideas of what could be done. I’d expect to write about the same subject again in the next few weeks, but in the meantime lets share tips, dos and don’ts for 2009. Where will you be spending your marketing budget in 2009?

TIP: Auto Entrepreneur - Assess your social charges

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The Agence Pour la Creation des Entreprises is one of the most useful and reliable source of information – although mostly in French – for people wanting to start their busines. It is also used by professionals to advise entrepreneurs (including me). The APCE is also working with the Government to promote the Auto Entrepreneur scheme.

Auto-entrepreneur social charges explained

If you are wondering how much social charges you would pay with the Auto Entrepreneur scheme, have a look at their social charges simulation tool. Enter your turnover per month or quarter, click on your activity type trade, services or intellectual services and there you have it!

TIP: URSSAF - English help line

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The URSSAF in Poitou Charente has an English website which will help you understand how to register your business, how to use a Cheque Emploi Service Universel (CESU) or a Cheque Emploi Tres Petites Entreprises (TPE).

If you have more questions, call their English help line 0821 74 27 27, Monday to Friday 8am to 6.30pm.

How to become an Auto-entrepreneur in France

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The French Government is expecting 100,000 people to register as an auto-entrepreneur by the first semester of 2009. Although the implementation details will not be published before the end of November, this new system is ideal to test a business idea with a minimum risk.

What is an Auto-entrepreneur?

Anyone setting up an entreprise individuelle, also known as micro entreprise, for trade, crafts or services as a main or secondary activity and with a limited turnover of 32,000€ for services and 80,000€ for trade, accommodation or food provided on the premises.

The French Government is expecting 100,000 people to register as an auto-entrepreneur by the first semester of 2009. Although the implementation details will not be published before the end of November, this new system is ideal to test a business idea with a minimum risk.

What is an Auto-entrepreneur?

Anyone setting up an entreprise individuelle, also known as micro entreprise, for trade, crafts or services as a main or secondary activity and with a limited turnover of 32,000€ for services and 80,000€ for trade, accommodation or food provided on the premises.

What are the advantages of the Auto-entrepreneur?

The key advantage is the régime micro social simplifié which enables you to pay your social charges according to your real turnover either on a monthly or quarterly basis. You will also be able to opt for the régime micro fiscal simplifié in order to pay your income tax according to your turnover. The auto-entrepreneur will also benefit from a taxe professionnelle exoneration for 3 years.

Where do I register as an Auto-entrepreneur?

When setting up a business, you normally have to register with the “Registre du Commerce et des Sociétés” or at the “Répertoire des Métiers”. The auto-entrepreneur will either declare his activity online or to the Centre de Formalités des Entreprises (CFE) at the chambre du commerce for trade, chambre de métiers for crafts or URSSAF for services. This new system will start on 1st January 2009.

What is the régime micro social?

An easier way to calculate your social charges based to your real turnover. You will pay 12% of your turnover for trade, accommodation and food served on the premises and 21.3% for services. So if you don’t sell anything, you don’t pay. The percentage for the professions libérales hasn’t been confirmed yet.

How to declare & pay your social charges in France

Every month or quarter you will have to complete a form with your actual turnover and return it to the Régime Social des Independents (RSI) or URSSAF. An online version should be available.

What is the régime micro-fiscal simplifié?

You can also opt to pay your income tax every month or quarter based on your actual turnover. This will represent 1.7% of your turnover for services, 2.2% for professions libérales and 1% for trade, accommodation and food served on the premises. Opting for the régime micro-fiscal simplifié will also enable you to benefit from a taxe professionnelle exoneration for 3 years.

You can opt for this system when declaring your activity to the CFE or within 3 months after registering. Your yearly income before starting the business shouldn’t be over 25195€ for a bachelor, 50000€ for a couple and 75000€ for a couple with a child.

What happens if my turnover goes over the limit?

You can remain within the micro entreprise regime for up to two years provided your turnover doesn’t go over 34,000€ for services and 88,000€ for trade, accommodation and food served on the premises. Above these limits you must become VAT registered and will not benefit from the régime micro social and régime micro-fiscal simplifié.

A few questions still need to be answered. For instance if you don’t sell for a few months after declaring your activity, will you benefit from a health cover or will you need to make a minimum contribution to be fully covered?

TIP: Assurance Maladie - English help line

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If you need any information regarding your social security insurance, benefits and healthcare rights in France call the Assurance Maladie English help line on 0811 363646. Lines open Mon to Fri, 9am to 6pm.

Their website Ameli.fr also answers a few common questions on how to get reimburse according to your personal situation.

Starting a Table d’Hôtes in France

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I have received many questions about the tables d’hôtes regulations since I started this blog in October. Many people are confused as to whether or not they should be registered, will they pay social charges, can they serve food to the passing trade, etc. So here is a summary of the basic rules for setting up a table d’hôtes in France.

• A table d’hôtes is strictly reserved to guests staying in your chambre d’hôtes. If your friends have a gîte nearby, you won’t be able to cater for them, nor the passing trade.
• Meals have to be served at the family table, as the whole concept is about sharing a meal with the hosts’ family
• You can only serve one meal per day, which has to be regional or traditional French cuisine (!!??). Obviously if you run a chambre d’hôtes you can also serve breakfast.
• You will have to apply for a Licence de petite restauration in order to serve alcohol with meals (contact the Douanes)

Impact on your social & fiscal charges

When starting a table d’hôtes you should be registered with the Registre du Commerce et des Sociétéés (RCS), which will trigger social charges payable to the Regime Social des Indépendants (RSI). Contact your local Chambre du Commerce et de l’Industrie to process to your registration.

If you register as a micro entreprise, you can decide not to be VAT registered (i.e you don’t charge TVA and you don’t claim it back). You will declare your yearly income on your Impôt sur le Revenu form, in the Bénéfices Industriels et Commerciaux (BIC) category. The maximum turnover for a micro entreprise from 1st January 2009 will be 80,000€ for trade, food served on the premises and accommodation including furnished accommodations (i.e. gîtes and chambres d’hôtes).

A person renting his/her personal house – habitation personnelle – as a gîte or chambre d’hôtes can normally benefit form a taxe professionnelle exoneration. Contact your Services de Impôts to ensure you could benefit from it too.

Average turnover for a table d’hôtes

Finally, according to the Agence National pour la Création des Entreprises (a reliable source of information with a small english section) the average price for a table d’hôtes is 17€. The average turnover for a house with 3 guest rooms is 19 000€ per year for room and table d’hôtes.

Which legal structure should you choose to set up your business in France?

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The legal structure of your company will impact on your liability and taxation. To help you make the right decision, I have compiled a basic overview of the different types of companies available in France.

As a rule of thumb, if you are alone your options are an Enreprise indiviuelle (sole trader which includes the micro entreprise and auto entrepreneur) or an Entreprise Unipersonnelle à Responsabilité Limitée – EURL (private limited company). If you have several associates you may choose between a Société à Responsabilité Limitée – SARL (Limited liability company) or a Société Anonyme (Business Corporation).

No legal documents are required to set up an enterprise individuelle. It is registered in your name with the Centre de Formalités des Entreprises and your general income will be taxable to the income tax (impôt sur le revenu). If your partner is working with you, he or she will have to be declared as an employee or as a conjoint collaborateur (collaborating partner) and therefore pay extra social charges. The main downside of the enterprise individuelle is that you are liable on your property for the company debts. You can however protect your house by having a notaire write a contrat d’insaisabilité.

The micro enterprise is a sub-category of the enterprise individuelle and offers several advantages for a first time entrepreneur in France:

• You choose whether or not to be VAT registered.
• Accountancy rules are simple: keep a “journal comptable” or accountancy book, plus a copy of all your invoices and receipts.
• Inland revenue declarations are easy: simply declare your turnover on your French Inland Revenue form. The taxman will apply a standard rebate on your turnover to determine the base for your imposition (- 50% for services, – 71% for trade).
• You may opt for the regime micro social in order to pay your social charges on a monthly or quarterly basis according to your real turnover. In order to opt for the micro enterprise, your yearly turnover has be less than 32 000€ if you are providing services (consultancy, teaching, etc) and less than 80 000€ for trade.

The auto entrepreneur system is also a micro-entreprise with a few differences

• Easier registration and closing down processes
• You cannot be VAT registered
• Your social charges can be paid on a monthly or quarterly basis according to your real turnover (12% for trade, accommodation and food served on the premises and 21.3% for services)
• You can also opt for the régime micro-fiscal simplifié and pay your income tax on a monthly or quarterly basis according to your real turnover (1.7% for services, 2.2% for professions libérales and 1% for trade, accommodation and food served on the premises)
• Opting for the régime micro-fiscal simplifié will also enable you to benefit from a taxe professionnelle exoneration for 3 years. If you wish to protect your assets, you may create an Entreprise Unipersonnelle à Responsabilités Limitées EURL. This type of company follows the principles of a SARL, but with a sole partner. You will have to choice to opt for income tax or corporation tax.

The Société à Responsabilités Limitées SARL is designed for a minimum of 2 partners and requires Articles of Incorporation (Statuts). The company has its own entity and the associates are responsible for debts only up to the amount of their contribution. Setting up a SARL costs about 1500€, including the legal contracts validated by a notaire or accountant and insertion in the legal newspapers.

There is no minimum capital requirement, so you could theoretically set up a limited company with 1€! The company will be taxed on its profits, i.e. corporation tax of 33.33%.

What if you already have a business in England? The first option is to open a bureau de liaison or marketing office. This will limit you to marketing and business development activity, as no trade may take place. The second option is to create a succursale or branch office, which will carry out business in the name and on behalf of the main company.

How to register your business in France online

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When setting up your business in France, you will have to register with the Centre de Formalités des Entreprises (CFE). According to your business activity, you will register with:

• Chambre du Commerce et de l’Industrie for trade and industry
• Chambre de Métiers for crafts
• URSSAF for services
• Greffes du Tribunal for agent commercial
• Chambre de l’Agriculture for farming activities

You can also register your business online. You will need to scan some documents (such as you passport, proofs of qualifications for regulated activities or marriage certificate) and pay the registration fees by credit card.

Where to register your business online

• Trade & industry with CFEnet or InfoGreffe
• Crafts CFEMetiers or InfoGreffe
• Services – Professions libérales CFE URSSAF or InfoGreffe
• Agent commecial with InfoGreffe
• Farming ativities: online registrations are not available yet.

In doubt go with the Info Greffe website as they will take any registration.
If you prefer to complete the registration process with someone, rather than online, you can find out which Centre de Formalités des Entreprises you should register with, by checking the CFE Directory . By indicating your type of activity, then choosing a legal structure and a location, you will get the full contact details and web site.

How to market your business in France to English people in France

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If you have recently moved to France, chances are you haven’t quite mastered the language enough to sell to French customers. If that’s the case when starting your new business in France, your first source of income will most likely be the English community living in France. So where do the Brits live in France?

Here is an interesting heat map of British property owners in France. The départements with the highest percentage of British homeowners are Creuse, Charente, Dordogne and Haute Vienne. The hot spots definitely seem to be spreading to the whole Atlantic coast.

Now that you know where your potential customers are, the question is how can you best market your business to them? The most successful way to reach your English customers in France, is to advertise in the English press published in France. The national press such as The Connexion or French News which sell between 35,000 to 40,000 copies per month. A regional magazine can reach anything between 5,000 to 15,000 copies. You should also target the online community websites. I have compiled a list you might want to consider for your advertising budget:

National newspapers in English

The Connexion
FRANCE Magazine
Living France

Regional magazines in English

Living Poitou Charente
The Rendez Vous – Normandy
BritMag – Normandy, Brittany
FUSAC – Paris

English online community’s and directories

AngloINFO
Expatica.com
Francopats
Franglo
French Entrée
French Property
Living France
Lost in France
Total France
Find a Trade in France

As you can see from the list of regional magazines I live in Normandy, so I’m not so up to date with regional magazines. If you have successfully used other magazines or community websites, please add their details in the comment box. Let’s share the info with other business owners.

Is your website talking to you?

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After you’ve made your way through the maze of French bureaucracy and finally registered your business in France, it’s time to find customers and start making money. The usual starting point for many people is to have a website designed and start advertising it in the English press in France and on appropriate websites – and this is exactly the right thing to do. But do you know if your website is actually bringing in business? Do you know how people find your site? Do you know how long are people staying on your site? Do you know how many visitors your site gets every week? If your business is seasonal do you know when your site gets its most visits? Do you know which of your paid ads are sending people to your site and which aren’t?

To improve your online results you absolutely must have this kind of information at your fingertips and the best way to get it is by using Google Analytics. It’s a free service from Google, just ask your website designer to install it for you – it takes an hour or less to setup.

Here’s an example, say you buy an ad on www.angloinfo.com and another on www.frenchentree.com, how are you going to know when it comes to renewing your ad which of these sites sent you the most visitors, i.e. which is the better in investment and which to drop – if any? Google Analytics will tell which site is referring the most people to your site and a lot more besides.

Google Analytics will help you make sure you site is in the best shape to maximise traffic and revenue. If you’re anything like me you’ll quickly become an Analytics junkie, if you do you might also be interested to read the analytics blog.

Promoting your French gîte or chambre d’hôtes to increase your bookings

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For most English people moving to France, converting part of their property or near by second property into a gîte or chambre d’hôtes is a first source of income. According to figures published by the Fédération des Gîtes in 2007, on average a gîte in France tends to be booked 17 weeks/year and a chambre d’hôtes between 85 and 114 nights/year. So how can you increase your bookings out of season?

• Make your website personal, keep it updated and promote your area
• Have postcards or business cards printed and drop them at the Offices de Tourisme within a 100km radius
• Boards of tourism usually keep a record of local gîtes which they give to tourists looking for a place to stay, make sure they have your details
• Create a “gîte à thème” with specific activities such as fishing, equestrian, farm, art, cooking, etc.

Join one of the six national gîte or chambre d’hôtes networks

http://www.gites-de-france.fr
http://www.clevacances.com
http://www.fleursdesoleil.fr
http://www.bienvenue-au-chateau.com
http://www.accueil-paysan.com
http://www.bienvenue-a-la-ferme.com

Advertise your gîte or chambre d’hôtes on online directories

http://www.cheznous.co.uk

http://www.france4families.com

www.aweekor2infrance.com
http://www.frenchconnections.co.uk
http://www.holidayswanted.com
http://www.french-property-news.com
http://www.francemag.com
http://www.france-rental.com
http://www.homelidays.com
http://www.likhom.com

Advertise on Belgium & Deutch websites

http://www.bbexpo.be
http://www.joyedevivre.be

If you know any other good websites to advertise gîtes or chambre d’hôtes on, or have any tips to increase bookings please leave a comment below – I’m sure they’ll be much appreciated.

Registering a business in France to sell on French markets

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You’re planning on selling food, goods or crafts and would like to test your business potential on local French markets. But are you entitled to do so without registering your business? Unfortunately the answer is no.

In order to sell on French markets you will need to get a carte de commerçant ambulant from your Préfecture and register your business with the Chamber of Commerce and Industry. If you are selling food, you might also want to contact the Direction Départementale des Services Vétérinaires (DDSV) in order to double check the regulation you will have to comply with (food storage, etc).

How to register as a commerçant ambulant

1. Contact your local préfecture or sous-préfecture and ask for a carte de commerçant ambulant. A temporary certificate entitled attestation provisoire, valid for 30 days will be delivered to you.
2. On reception of your temporary certificate, go and register your business at the Centre de Formalités des Entreprises at the Chambre du Commerce et d’Industrie. The extrait KBIS, official document confirming the creation of your company, will be posted to your home address within 10 days.
3. Go back to the préfecture with your extrait KBIS and attestation provisoire in order to request your final carte de commerçant ambulant which will be valid for 2 years.
4. Renew your carte de commerçant ambulant every 2 years at the préfecture

How to secure a plot for your market stall

You will have to pay a droit de place, or plot fee to the Mairie in order to set up your stall in a public area. Contact the Mairie or the placier – person in charged of the market – who will confirm the fees rate, usually a few euros per meter according to the length of your stall.

Financial and social help to start your business in France

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You have completed your market study, business plan and are about to register your business in France. But have you checked whether you are entitled to any financial or social help?

There are more options if you are registered with the unemployment agency (ANPE) and if you speak some French, as in most cases you will have to fill in forms or give a very basic business plan in French. However with the help of your local Boutique de Gestion, Chambre de Métiers or Chambre du Commerce, you should get through the red tape. My first piece of advice would therefore be to make an appointment with one of them to check which scheme could work for you.

Would be entrepreneurs registered with the unemployment agency, can benefit from the EPCRE, EDEN and ACCRE. The Etude Préalable à la Création ou Reprise d’Entreprise (EPCRE) enables you to get free help from a professional business adviser to validate your business idea. The ANPE will ask your local Boutique de Gestion to guide you through the EPCRE with a maximum of 6 one-to-one meetings. Thus enabling you to cover the most appropriate structure for your business, review your market, create a provisional plan and check for any potential financial help.

If you haven’t worked in France, you won’t be getting any benefits from the ANPE, but provided you have been registered for 6 months, you could benefit from a social charges exoneration – ACCRE, for the first year. This could also apply to you if you receive the Revenu Minimum de Reinsertion (RMI) or the Allocation Parent Isolé (API, single parent allowance). This exoneration can partially be renewed in your second year, provided your turnover remains within the limit of the micro enterprise (27,000€ for services and 76,400€ for trade).

If you are unemployed below 30 years old, over 50 years old or receiving the minimum revenue of reinsertion (RMI) or single parent allowance (API), you can also apply for the EDEN – Encouragement au Développement des Entreprises Nouvelles. This scheme offers an interest free loan of up to 6,000€ reimbursable over 3 to 5 years. Forms for the taxe exoneration and reimbursable loan have to be completed and returned when registering your business.

Would be entrepreneurs qualifying for ACCRE or EDEN can also apply for the Chéquiers Conseil. These pre-financed cheques from the Direction Départementale du Travail et de la Formation Professionnelle (DDTEFP) can be used to pay for professional advice on starting your business (accountants, Boutique de Gestion, etc). A cheque book with six cheques worth 45€ each will be issued to you before starting your business, two extra cheque books will be issued after the registration.

Two extra schemes worth pursuing are the Prêt Création Entreprise – PCE and the Fond de Garantie à l’Initiatitve des Femmes – FGIF. Both aim to provide a guarantee on your main business loan.

The PCE or new business loan from OSEO vary from 2,000€ to 7,000€ and generates a guarantee of 70% on your main business loan, provided the overall investment is below 45,000€.

Similarly the FGIF provides female entrepreneurs with a guarantee of 70% on their business loan (maximum guaranteed 27,000€).

Print: Financial and social help to start your business in France (PDF)

Auto Entrepreneur: Starting your business in France made easier in 2009

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The French Government is working on a new law, which will simplify the process of setting up a micro enterprise business in France. The Loi de modernisation de l’économie will have an impact for you if you have a micro enterprise or if you are thinking about starting a new business. The objective of the law is to free the entrepreneurial spirit by reducing the administrative burden and financial risks involved. Four key measures should be implemented by the 1st January 2009 with the creation of the auto-entrepreneur kit.

1. The auto-entrepreneur setting up a micro enterprise will have the option to pay social and fiscal charges on a monthly or quarterly basis according to actual turnover. This is a major improvement as the actual system is based on a set amount for the first two years (3000€ in year one), with regularisation in year 2 and 3. The social and fiscal charges will represent 13% of your turnover for trading activities (shops, e-commerce, crafts) and 23% of your turnover for services (consulting, private lessons, workshops). This new system is entitled the régime micro social. In order to opt for this system, your yearly income before starting the business shouldn’t be over 25195€ for a bachelor, 50000€ for a couple and 75000€ for a couple with one child.
2. The business registration process will be made easier for pensioners and employees. If you are currently employed (not self-employed) or retired and planning on setting up a business to increase your revenue, you no longer need to register your business with the Chambre du Commerce or Chambre de Métiers. The auto-entrepreneur should only complete a specific form “formulaire de déclaration” and return it to the Centre de Formalité des Entreprises.
3. Better protection of your asset. The main downside of the current micro enterprise system is that you are liable for the company’s debts on your property and asset. So far you could only protect your house by having a notaire write a “contrat d’insaisabilité”. From January you will also be able to protect all your properties and land, as long as they are not used for your business activity.
4. Tenants won’t require an authorization from their landlord in order to set up their business from home, as long as the activity is based on the groundfloor of a building or house.

This new law has been passed but will not be implemented before January 2009. This implies that some modifications might occur, so I’ll keep you posted on the changes.

Unfortunately if you have set up a business in 2008, these changes won’t apply. You won’t be able to close down and re-registered in order to opt for the regime micro social.

Existing entrepreneurs having set up an entreprise individuelle will however benefit from the increased yearly turnover allowed for a micro enterprise. The yearly turnover will be increased from 76300€ to 80000€ for trading activities and from 27000€ to 32000€ for services.

Read the Governement’s official presentation on auto entrepreneur (in French)

How to use chèque emploi in France

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Do you want to employ someone a few hours a week to do your cleaning, gardening or to give you French lessons? If so Chèque Emploi Service Universel – CESU is the easiest way to legally employ someone without too many formalities.

If you are planning to start a business with services activities delivered at your customers’ home, such as private lessons, cleaning, gardening, child minder or handyman, this could also be a legal way to test your market. CESU enables a private individual to pay someone he or she employs directly for various tasks at their home. There is no need for a work contract or monthly payslips, the system will calculate the social charges for you. You could also benefit from an income tax credit if you are registered to the French income tax.

So how does a chèque emploi work?

CESU provides the employee with health insurance as well as points for their retirement plan. As the employer, you are covered if the employee had an accident at work.

If the person you plan to employ is interested, ask your bank for a CESU bancaire form. You will get a cheque book with which to pay the employee the net amount agreed and a section to send to the national CESU centre who deals with the social contributions. The required social taxes will be taken directly from your bank account and a certificate will be sent to the employee.

You have to agree the wage with the worker, which must be above the national minimum hourly rate of 7.38€ (net). Don’t forget to plan another 40% extra for the employer’s social charges, charges patronales, when agreeing the hourly rate, or you will have a bad surprise when the contributions are drawn from your bank account! You can calculate the employer’s and employee’s social contribution on http://www.cesu.urssaf.fr (simulation section).

Let say you employ a cleaner 3 hours a week at 10€/hour. The cheque you write at the end of the month will come to about 120€. Another 78€ will be taken from you bank account for social charges, and you will benefit from a tax credit of 99€. The employee will pay about 35€ for his own social charges (charges salariales).

When using CESU, you also benefit from tax credits or “crédit d’impôts” available for home services, which can account for half of the money you spend on paying the worker, up to a total limit of 12,000€ a year. Check the cesu website for details as the crédit d’impôts limit vary from one activity to the other; for instance gardening is limited to 3,000€ per year.

CESU was initially created to pay someone who works on an occasional basis for no more than 8 hours a week. Various activities are more restricted as to not create unfair competition to artisans (e.g. a handyman).

If you plan on starting a gardening or private lesson business, this is a great step stone towards creating your company without taking any risks. Your activity is fully legal, so you can advertise, pay your taxes according to your activity level and assess whether or not you have enough work to keep you busy all year long.

Setting up a gîte, chambre d’hôtes or table d’hôtes in France

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Gîtes are often viewed as a main source of income for English people settling in France. It should however be considered as a secondary activity, as the peak season ranges from June to September.

According to figures published by the Fédération des Gîtes in 2007, the average turnover generated by a gîte is about 5500€ per year, with a weekly rental cost varying from 267€ to 408€ between the low and high season. Gîtes in Normandy tend to be rented 12 to 14 weeks per year, with an average of 17 weeks for the rest of France.

A chambre d’hôtes generates from 1500€ to 3000€ per year, with an average charge of 49€ for two people with breakfast. The average number of nights rented varies from 85 to 114 per year.

It is slightly harder to assess how much a table d’hôtes can generate, as this activity is usually linked to several chambres d’hôtes. The average charge for a meal is about 17€, and a house with 3 chambres d’hôtes and a table d’hôtes should generate about 19 000€ per year (accommodation plus meals).

Registering your gîte

Should you register your gîte or chambre d’hôtes with the Chambre du Commerce? It all depends whether this is your main or secondary source of income. If you already have a job or are self employed, a simple declaration at the Centre des Impôts will do. However if this is your main activity, you will have to register with the Registre du Commerce et des Sociétés as a “loueur meublé”. If you are providing services such as cleaning, bed linen rental, table d’hôtes, workshops, bike rentals, etc. you will also have to register with the Chambre du Commerce.

Social charges and the income tax

By registering as a micro enterprise with the Chambre du Commerce, you will be liable for social charges (pension, health, CSG-CRDS) and become VAT registered at a special rate of 5.5%. You will declare your turnover on your French inland revenue form under the “Bénéfices Industriels et Commerciaux” category (BIC).

As a gîte or chambre d’hôtes owner, you will also be liable for the “taxe professionnelle” unless the gîte is attached to your house or if you belong to the Gîtes de France network. Finally you will be liable to the property tax “taxe d’habitation”.

New legislation for chambres & tables d’hôtes

All Chambres d’hôtes have to be registered with the mairie since august 2007. Simply send a letter with recorded delivery with your personal details and the number of rooms. If your home has more than 5 chambres d’hôtes and caters for over 15 people, you will qualify as a “établissement recevant du public” and tougher health and safety rules will apply such as fire regulations and reduced mobility access.

Setting up a chambre d’hôtes will also require a specific licence to serve drinks at breakfast time. Contact your local customs office, “douanes”, to apply for the “licence 1 débit de boissons”. Tables d’hôtes will require a “Licence de petite restauration” in order to serve alcohol with meals.

How to increase your revenue

Despite all these legislations there are ways to increase your activity. Tables d’hôtes have proved to generate an extra 20 night rental per year. Seminars, workhops and receptions, as well as luxury rooms can boost rentals for the low season. Finally over 60% of people staying in gîtes come from abroad, so don’t underestimate the power of a well designed gite website in France, as well as registering with online directories.

Where & how to register your business in France

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The nature of your activity will determine where you should register your company in France. If your business involves trade or industry, you will register with the Chamber of Commerce & Industry . Activities involving crafts or a mixed type of crafts and trade will register with the Chambre de Métiers . Activities based on services such as private lessons, translator or consultant will register as profession libérale with the URSSAF .

In France several business activities are regulated, such as itinerant tradesmen, estates agents or drivers’ education school; so you must always check first whether you satisfy the required conditions. These could be based on diplomas, experience or holding a professional card. For instance, estate agent and sales representative require a professional card and will register with the Greffes du Tribunal (commercial court clerck’s office).

Many business activities registered with the Chambre de Métiers such as builder, hairdresser or electrician require a Brevet d’Etudes Professionnelles (BEP) or Contrat d’Apprentissage Professionnel (CAP), which are the equivalent to an apprenticeship. You will therefore have to bring a copy of your English diplomas or prove that you have been working in this field for over 3 years. Anyone registering with the Chambre de Métiers will also have to attend a one-week compulsory training entitled “Stage préalable à la création d’entreprise” costing about 200€.

What about gîtes and bed & breakfast? Should you be registering with the Chamber of Commerce or the Centre des Impôts? If the revenue from the gîtes activity is your main source of income, you will have to register with the Chamber of Commerce. This will imply paying social charges of 3500€ for the first year. If it is a secondary income, you are entitled to register direct with the Centre des Impôts.

The Centre de Formalité des Entreprises (CFE) will inform the RSI, URSSAF and general direction of taxes of your inscription. The official registration papers or “Extrait KBIS” with your SIRET and SIREN number will be posted to you within 10 days.

Registering a one-man business in France or “enterprise individuelle” is straightforward and can be completed within an hour. On the other hand formalities for registering a company – EURL or SARL – can take a couple of weeks. Three stages have to be completed before going to the CFE:

1. Funds composing the capital have to be blocked on a professional bank account. A “récipissé de dépôt” or confirmation of deposit will be given to you.
2. The “Statuts” or articles of incorporation can be written by a notaire, lawyer or accountant. These statuts will have to be recorded by the Centre des Impôts. The CFE, and usually your bank, will require a copy of the validated statuts.
3. Finally, an advertisement costing about 150€ will have to be placed in the “Journal Officiel” to confirm your registration. Once again a “récipissé” will be required for the CFE.

You could save yourself a lot of hassle by using an accountant or notaire to register the company (about 1400€).

How to start your business in France

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The legal structure of your company will impact on your liability and taxation. Here is a basic overview to help you make the right decision.

If you are alone, you could create an Enreprise indiviuelle*’(sole trader) or an *Entreprise Unipersonnelle à Responsabilite Limitée EURL (private limited company). If you have several associates you mainly have the choice between a Société à Responsabilite Limitée SARL (Limited liability company) or a Société Anonyme(Business Corporation).

No legal documents are required to set up an enterprise individuelle. It is registered in your name and your general income will be taxable to the income tax (impôt sur le revenu). If your spouse is working with you, he or she will have to be declared as an employee or as a conjoint collaborateur (collaborating partner) and therefore pay extra social charges.

No legal documents are required to set up an enterprise individuelle. It is registered in your name and your general income will be taxable to the income tax (impôt sur le revenu). If your spouse is working with you, he or she will have to be declared as an employee or as a conjoint collaborateur (collaborating partner) and therefore pay extra social charges.

The main downside of the enterprise individuelle is that you are liable on your property for the company debts. You can however protect your house by having a notaire write a contrat d’insaisabilité.

The micro enterprise, which is a sub-category of the enterprise individuelle, offers several advantages for a first time entrepreneur in France:

• You choose whether or not to be VAT registered
• Accountancy rules are simple: keep a “journal comptable” or accountancy book, plus a copy of all your invoices and receipts
• Inland revenue declarations are easy: simply declare your turnover on your French Inland Revenue form. The taxman will apply a standard rebate on your turnover to determine the base for your imposition (- 50% for services, – 71% for trade)

In order to opt for the micro enterprise, your yearly turnover has be less than 27000€ if your are providing services (consultancy, teaching, etc) and less than 76300€ if you are selling goods.

If you wish to protect your assets, you may create an EURL. This type of company follows the principles of a SARL, but with a sole partner. You will have to choice to opt for income tax or corporation tax.

The SARL is designed for a minimum of 2 partners and requires Articles of Incorporation (Statuts). The company has its own entity and the associates are responsible for debts only up to the amount of their contribution. Setting up a SARL costs about 1500€, including the legal contracts validated by a notaire or accountant and insertion in the legal newspapers.

There is no minimum capital requirement, so you could theoretically set up a limited company with 1€! The company will be taxed on its profits, i.e. corporation tax of 33.33%.

What if you already have a business in England?

The first option is to open a bureau de liaison or marketing office. This will limit you to marketing and business development activity, as no trade may take place. The second option is to create a succursale or branch office, which will carry out business in the name and on behalf of the main company.

Free seminar: How to start your business in France

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Are you looking to set up your business in Normandy? Do you know which legal structure is best for you? Could you benefit from some extra help or are you just confused as to where you should register your company? If so, this free seminar – presented in English – is for you.

• How to set up your business in France
• Analysing your market potential
• Choosing the legal & tax structure
• Provisional plan & social charges
• Which help could you benefit from (taxes exoneration, bank loans at 0%, free advice, etc)
• Financing your project
• How and where to register your business
• Questions & answers

Visit the site and register

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