France is a popular place to go for entrepreneurs and businesspeople. If you’re going to start a business, why not do it in a dreamy location? With recent reports claiming that French people tend to be wealthier than in the UK and the US, it seems like a great place to start…
What do I need to start a business in France?
In France you need certain documents – or at least started the process to obtain them. These are two documents that you need before you can go any further. What you need are:
• Certificate d’Immatriculation (Formal business registration)
• Carte Vitale (computerised card that allows you to reclaim medical expenditure)
In the past a carte de séjour (residency permit) was also required, but that is no longer the case for EU citizens. Keep an eye on our Brexit zone for updates for UK citizens.
You will most likely want to seek out a French accountant in your local area, ideally one who speaks English well. As you will need an accountant further down the line, it would be wise to engage one now. In France every business must have a qualified accountant (expert-comptable) to act on its behalf. It’s also important to note that accountants in France charge significantly more than in the UK.
You must also register your business with the Chamber of Commerce. If you don’t want to find an accountant in the very early stages, the Chamber of Commerce can also help you with the paperwork you need to start up the enterprise, but the assistance generally stops there.
Why do I need an accountant for my French business?
First and foremost, you need an accountant because it is a legal requirement.
Many people will be able to handle the book-keeping and basic profit and loss calculations. However, an accountant who is well-versed in the financial and legal matters relating to business ownership will be a great asset to you. Any guesswork or mistakes on your part could be far more expensive than getting the right advice in the first place. Also, an accountant will be an expert in French taxation and advise the optimum way to minimise your tax. Trying to save money by scrimping on your accountant is, if you’ll pardon the pun, a false economy.
It is important to bear in mind that your French accountant will need to be aware of UK income if you have selected to become French resident for tax purposes. It is absolutely essential for anyone embarking on major change such as launching a business in a new country to take professional advice.
How do I choose the classification of my business?
You must decide early what form of business is most suitable for your situation. Your accountant’s advice could be essential here. For most start-ups this is likely to be an Entreprise Individuelle also known as EI (similar to UK self-employed status) or SARL (similar to UK private limited company).
For the majority of people moving to France to start a business an Entreprise Individuelle (or Micro Business) is an appropriate choice for the first year or two, and as their business grows, the classification may change to become a SARL.
Being an EI has a number of benefits. The most obvious is that your personal income and business income are treated as one which means lower tax, less formal record-keeping, no mandatory pension contributions and full access to the health care system. Micro businesses must turnover less than €27,000 per annum, which also avoids the necessity to register for TVA (VAT).
How do I set up an Entreprise Individuelle?
If you do choose to start up as an Entreprise Individuelle you (or your accountant) will need to complete two forms:
• Demande d’Affiliation ou de modification d’Affiliation au titre d’un activite non-salarie (Form TNS)
• Declaration de debut ou reprise d’activitie non salarie (Form PO)
These will be in French and determine your business and tax structure (e.g. micro-business), TVA registration (or lack of necessity thereof) and create your social security records. They must be sent (with appropriate cheques drawn from a French bank – budget around €200 Euros) to the Chambre de Commerce et d l’Industrie and Greffe du Tribunal de Commerce in the Department where you live and will base your business.
You will be asked to supply a variety of documents with these forms – which may well differ from department to department. Make sure you check exactly what is required in your department or your submission may be delayed or, at worst, rejected. These documents are likely to include:
• Photocopies of your own and, if relevant, your spouse/partner’s passport
• Proof of French address (e.g. Acte de Vente)
• Copies (two) of your Birth Certificates
• French translation of your Marriage certificate (if applicable)
• Copy of existing health care cover – if you have a UK or worldwide Private Health care policy that’s ideal, if not you can try with the EH1C – although some departments may be reluctant to accept this as proof of cover.
• Details of how you plan to fund your business; e.g. personal funds, loan
We would suggest that it is worth paying your French accountant to process these forms and handle any queries. For example, if you are working from home or using part of your home for business these forms will also generate another form from the Centre Recette des Impots (Tax Office) requesting information on the proportion of your floor space you use for business. It is vital you take advice in completing this form or you could find yourself with a hefty tax bill – in France you pay tax on the proportion of your home used for business purposes.
What documentation will I be given if my business is approved?
If all goes well you will eventually receive:
• Certificate d’Immatriculation (Extrait du Registre du Commerce et des Societies). This is a formal document that is signed and sealed and contains details of your business structure and registration number (e.g. SIRET number). Many organisations will require your SIRET number to prove you are a bona fide business.
• Carte Vitale – this is a green card the size of a credit card with an embedded a micro-chip that contains confirmation of your entitlement to health care.
You will also start to receive requests for contributions to the social and health system from MCIPLS (Assurance Maladie des Professions Independantes).
What else should I consider?
There are four fundamental sources of help and advice for anyone thinking of setting up a business in France. They are the mairie, the Chambre de Commerce, a French-based accountant and a currency expert. I could also add that a trip to a UK accountant to sort out the British tax position is also a good investment.
Befriending the Mayor and his assistant is time well spent. Make an appointment, take along a French translation of your business idea and ask for their advice. The questions to pose are ‘here is my idea, what do you think?’ followed by ‘is this something that you would support in your community?’ and ‘what advice can you give me and what do I need to do to help make this work?’
Never forget that the Mayor has probably seen it all before, and they are extremely well connected and much more powerful than Mayors in the UK or US. Generally, the Mayor – particularly in rural communities – will be delighted that you are bringing economic input into the community. Cultivate the Mayor and you have a friend for life. Ignore him or her, and you could encounter some difficulties.
Building a relationship with a currency expert is very important if you plan to move money overseas for any reason. Whether you need to move money to France when you relocate or to exchange your start up capital into euros, a currency exchange expert could make a huge difference. We trust moneycorp to give invaluable guidance, great exchange rates and other services to make currency exchange a breeze. Getting their advice early could save you thousands in time and money.
And, finally, a quick note on language barriers. Your choice of location will greatly affect the likelihood of you encountering people who speak English at all, let alone well. Any time you can invest into learning French will be extremely valuable, especially when it comes to making friends with local officials. Where you can, find professionals who speak English fluently who can act as an intermediary, but don’t rely on being able to find them, especially if you settle in a rural area.
France is a fantastic place to start a business. Like any place, there are some hoops to jump through, but you have every chance of success! We hope you’ll be joining France’s ranks of millionaires in no time.
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