For anyone planning to move to France, earning a living is a huge stumbling block. Unemployment in France is high, so a non French speaker is going to be at a serious disadvantage – and let’s be clear here, most Brits who move to France do so before their language skills are fully developed. Certainly that applies to myself and Mrs L.
So, what are the options? Don’t even think about working on the black. That is not an option, so just don’t go there. Unless you are retiring or your company has relocated you, then there are a few options; one is to go self-employed, another is to commute back to the UK. I’ve been doing the latter while giving the former consideration. The problem with self-employment in France is the up-front taxation. French social costs are expensive and the taxe professionelle is a tax on having a business; a tax, note, on turnover not profit. Also, social charges are payable before you’ve earned anything. Ouch!
Then there is the little matter of obtaining funding. French banks are rather more cautious than UK banks and won’t lend on the basis of a business plan. We did consider a chambre d’hote, which can be run as a micro-bic where the rules are simpler, but it would not be my ideal option as it would generate some income, but not much, I suspect.
Then along comes the auto-entrepreneur…
The main highlights of the auto-entrepreneur system are that newly registered individuals will be exempt from paying taxe professionnelle for the first 3 years and there will be no social charges or taxes payable until the new business starts to generate sales.
Now that’s more like it. As of the 1st January 2009, the French system will be rather more amenable to the self-employed. I have an idea for a small business based around Mrs L’s IT skills. While I continue to work in the UK, I have an income against which we can borrow set-up costs. All I need to do now is research the bureaucracy – and, believe me, there will be plenty of it. This is France, after all.
well good luck with it.
John Gibson
LR
Interesting isn’t it that the easiest place to set up a business, either as sole trader or through a small limited company, remains (despite the best efforts of our government) the UK. Of course europhiliac “harmonisation” fans want us to copy the institutionalised bureaucracies on the continent. I hope for your sake that the auto-entrepreneur system doesn’t go the way of all flesh in France (and back here) whereby any new “initiative” ultimately becomes even more mired in bureaucracy and expense than the problem it was set up to cure.
As I understand it from friends who have done what you are doing, the existing system is wonderful at preserving small local businesses (bakers, patissiers, restaurants, small garages etc). Unfortunately, it seems that a feature of that system is that when one of those small businesses goes under, few can afford (the money and time dealing with the bureaucracy) to step in and fill the gap from a standing start. But whatever happens – the very best of luck.
Indeed, this upfront approach was always illogical and I never understood why anyone should think it a good idea. Clearly Sarkozy has realised that if France is to improve its unemployment, then a more business friendly approach is the way to go. At the moment, there is relatively little bureaucracy with the auto entrepreneur – but I’ll still have to take professional advice on setting up a SARL.
Actually – although there are a few wrinkles to iron out – rather than go the SarL route, it’s possibly more straightforward (really!) to incorporate a UK company and register it in France as the equivalent of an “oversea” company in the UK. However, depending on circumstances, there may be a complication with UK companies depending on the tax residence of the company’s “controller” and the ramifications of the new UK-France double taxation agreement. That said, it’s probably more efficient to set up a non-EU incorporated company and register that in France. However, I would refer you to this for a bit of light reading and recommend you talk to a good (French) accountant.
Thanks for that. Your last sentence says it all.