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 TVA 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 and -71% for trade)
In order to opt for the micro enterprise, your yearly turnover has be less than 27,000 euros if your are providing services (consultancy, teaching, etc) and less than 76,300 euros 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 two 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 1,500 euros, 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 euros. 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.