The auto entrepreneur system for small businesses

THE initial costs of setting up and running a small business in France can see the best laid plans crumble into dust.

In an attempt to cut down on the paperwork and reduce the payments involved the government is to introduce the auto-entrepreneur system for small businesses.

The system is set to be in place for the start of 2009 and the official Service-Public pages feature information on the law's progress through parliament.

Registering a new business within the auto-entrepreneur system should be a simple process as it is aimed at those running a part-time concern, or those considered a professions libérales.

The French-Property website highlights the taxes and charges involved; those considered to be offering a service will pay 23 per cent of turnover, while those providing a more commercial offering will pay 13 per cent.

This arrangement will be especially helpful for small business as they often face a high initial payment towards social charges before any money has actually come in.

There are limits on turnover under the system, €80,000 for commerce and €32,000 for services, and it is still not clear as to which type of businesses can register, at the moment students, employed people, professions libérales (such as journalists, marketing, PR), retired people and unemployed people will be able to apply.

Payments will be based on the previous month or quarter's turnover that are submitted by the business owner. But it seems that existing small businesses, such as those registered as a micro-entreprise will not be able to swap across to the auto-entrepreneur system.

Once brought in next year the process of registration should be very simple and involve the completion of a form, either paper or over the internet, which will then be processed by the relevant social security and business registration bodies.

An example of the form is available on the French language website, auto-entrepreneur, which forms part of a useful 11-page guide to the system.

It must be remembered that the legislation has not completed its full process through parliament and a number of questions still remain, including whether the auto-entrepreneur system will have any impact on recent changes in health provision for those considered non-active but below retirement age.

Other resources:

Créer un statut d’auto-entrepreneur - Finance Ministry

Loi de modernisation de l'économie - APCE

Other articles:
Update to English language guide to auto entrepreneur system

Comments

[Carole Archibald]

Several sites state that charges are 13% for commercial and 23% for services. So there seems to be soem sort of discrepancy with this statement. Does anyone have the correct answer?

[Craig McGinty]

Hi Carole, my fault I'd swapped the two figures, the article has been updated.
All the best, Craig

[john white]

after working 4 years in a french enterpise in the building trade, i would like to start my own small enterprise. how do i go about this now that things are changing. what is the best line for me to do this.
thanks John

[Craig McGinty]

Hi John, the auto-entrepreneur system is still taking shape, but my suspicion is that it won't be available to people in the building trade. I'll keep up to date with any developments.
All the best, Craig

[jennifer]

Hi, I still live in the UK and pay tax here so if I want to do a car boot do I have to register as an auto entrepreneur and who do i pay tax to - France or UK?

[Craig McGinty]

Hi Jennifer, you will pay taxes to the UK authorities as that is where your main residence is and so you won't need to be registered as an auto entrepreneur, but you'd still have to be registered within the UK.
All the best, Craig

[Fiona]

HI. My husbadn wishes to register as an entrepreneur to supply and install fencing - which he did in the UK. This doesn't appear to be an artisan profession so does it come under commercial? Will he need to join any other organisations with this? Also, I'm a little unsure what is meant by the sectio about conjoint being collaborateurs or not. I work full time so would not be involved in the business. Many thanks.

[Eddy]

Dear All,

Interesting discussion since I also plan to register myself as a Consultant.

I've recently set up a Linked In group for "Global Talents for FRANCE" (expats of all origins). And this is the kind of things we share and exchange about ... please feel free to register.

Here is the link: http://www.linkedin.com/groupRegistration?gid=2369990

Looking forward to seeing you there.
Eddy