LBV France

Micro-Entrepreneur Business in France

  1. What is a 'Micro-Entreprise'?
  2. Micro-Entreprise or Auto-Entrepreneur?
  3. Micro-Entreprise Tax Regimes
  4. Should I elect for Micro-Entreprise Status?

2. Micro-Entreprise or Auto-Entrepreneur?

Since 2009, a new business status has been available to someone who wishes to establish a small business in France.

The business status is called auto-entrepreneur. Whilst a great deal has been made about this status by the French government, in fact there is very little to distinguish it from a mainstream micro-entreprise per se, as the fiscal status is the same.

Most of the characteristics and rules concerning micro-entreprise status that we considered in the previous page apply equally to those who are auto-entrepreneurs.

Thus, the tax status, turnover limits, rules on accounting, VAT and exclusions that apply to a micro-entreprise also apply to auto-entrepreneurs.

The only real differences between them relates to the business registration, tax and social security payment formalities and, to some extent, business rates, each of which is considered below.

I. Business Registration

For someone wanting to adopt the status of auto-entrepreneur the business registration formalities have been reduced as, for most activities, there is no need to formally register with either the Chambre de Commerce or Chambre de Metiers to undertake the business activity.

You merely complete an application form and send if off the form to the relevant business centre, who will furnish you with your business registration number, called your SIREN.

You can send the application form on-line, making sure you also include a scanned proof of indentity, or visit the local Chambre de Commerce, Chambre de Metiers, or URSSAF, the social security collections agency. You can also send by post, but then make sure you do so by recorded delivery letter. On-line applicants receive an e-mail confirmation.

If you are to be in one of the professions libérales send your application to URSSAF, the social security collections agency.

The exemption on business registration does not apply to regulated artisanal professions, who are required to register the business with the Chambre de Metiers to whom they are also required to provide proof of qualification or a minimum of three years experience.

The requirement for an 'regulated' artisan to register with the Chambre de Metiers and show proof of qualifications or experience does not apply if the business is pursued on a 'complementary' basis.

It would be regarded as 'complementary' if you were in receipt of a retirement pension or a salary, or if you exercised at least one other non-artisanal business activity, PROVIDED, in all cases the income from the artisanal activity is less than half of the total income received from elsewhere (except in the case of those undergoing training).

The building trades are one of the regulated activities.

You will not be required to pay the fee normally required for business registration, and neither will you be required to attend a short 'training' course, as is otherwise normally required for certain business activities eg building trades.

The auto-entrepreneur status does not exempt you from other criteria that may apply to undertaking a particular business activity, eg entry qualifications.

Neither does the status exempt you from the need to take out appropriate professional insurance where this is formally required in France eg building professions, lawyers, accountants. You need to check with the business registration centre, or your trade/professional body just what, if anything, is required.

On all bills and other paperwork you are required to state your adddress, business registration number (SIREN) and to also state either:

  • "Dispensé d'immatriculation en application de l'article L123-1-1 du code de commerce", for those with a commercial activity, or
  • "Dispensé d'immatriculation en application du V de l'article 19 de la loi n° 96-603 du 5 juillet 1996 relative au développement du commerce et de l'artisanat", for those registered with a trade based business activity.

If you do not register as an auto-entrepreneur but decide instead to opt for the general status of micro-entreprise, then you are required to register your business with the authorities in the normal manner, more details of which you can find here.

II. Social Security and Tax Payments

The procedures for the calculation and payment of social security contributions have been greatly simplified for an auto-entrepreneur, so that you pay a standard flat rate contribution each month or quarter based on your turnover for each period.

This is probably the main advantage of auto-entrepreneur status, as the 'pay as you go' system is clearly beneficial to cash flow. If you have no sales in an accounting period, then no social security payments are required. However, 'sales', does not necessarily mean 'cash receipts' so do not be misled by the terminology.

This social security regime is called micro social. You can also elect to pay a flat rate payment for income tax, called the regime micro-fiscal.

If you do not incur any sales in the period you will not pay any social security contributions or tax. This means that no minimum level of social security contributions are payable, as is the case under the business tax status of régime réel (circa €1500 per year).

The other great advantage is that you pay your social security contributions to a single agency, URSSAF, the social security collections agency.

The regimes micro social/micro fiscal are also available to a mainstream micro-entreprise business, which also has the opportunity to opt for the general micro-entreprise regime of social security and tax payments.

Both of these social security and tax payment regimes are examined on the next page.

III. Business Rates Exemption

Auto-entrepreneurs and a micro-entreprise opting for the tax regime of micro-social are exempt from the business rates, the Cotisation Foncière des Entreprises (CFE), in the year of the creation of their business, and for the following two years.

So it seems that a micro-entreprise opting for the régime de base (see later) would not be entitled to exemption, but further clarification is being sought on this point.

In order to benefit from this exemption the business owner or other immediate family members must not have previously exercised a similar activity during the previous three years.

You also need to formally request exemption by 31st December in the year of creation of the business. If it was created after 1st October, then the application must be made within three months of creation of the business.

In order to benefit from this exemption you need to complete Déclaration initiale pour la cotisation foncière des entreprises (CFE).

Next: Micro-Entreprise Tax Regimes

Back: What is a Micro-Entreprise?

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