The French Government is working on a new law, which will simplify the process of setting up a micro enterprise business in France. The Loi de modernisation de l’économie will have an impact for you if you have a micro enterprise or if you are thinking about starting a new business. The objective of the law is to free the entrepreneurial spirit by reducing the administrative burden and financial risks involved.
Four key measures should be implemented by the 1st January 2009 with the creation of the auto-entrepreneur kit. This new law has been passed but will not be implemented before January 2009. This implies that some modifications might occur, so I’ll keep you posted on the changes. Unfortunately if you have set up a business in 2008, these changes won’t apply. You won’t be able to close down and re-registered in order to opt for the regime micro social.
Existing entrepreneurs having set up an entreprise individuelle will however benefit from the increased yearly turnover allowed for a micro enterprise. The yearly turnover will be increased from 76,300€ to 80,000€ for trading activities and from 27,000€ to 32,000€ for services.
- The auto-entrepreneur setting up a micro enterprise will have the option to pay social and fiscal charges on a monthly or quarterly basis according to actual turnover. This is a major improvement as the actual system is based on a set amount for the first two years (3,000€ in year one), with regularisation in year 2 and 3. The social and fiscal charges will represent 13% of your turnover for trading activities (shops, e-commerce, crafts) and 23% of your turnover for services (consulting, private lessons, workshops). This new system is entitled the régime micro social. In order to opt for this system, your yearly income before starting the business shouldn’t be over 25,195€ for a bachelor, 50,000€ for a couple and 75,000€ for a couple with one child.
- The business registration process will be made easier for pensioners and employees. If you are currently employed (not self-employed) or retired and planning on setting up a business to increase your revenue, you no longer need to register your business with the Chambre du Commerce or Chambre de Métiers. The auto-entrepreneur should only complete a specific form “formulaire de déclaration” and return it to the Centre de Formalité des Entreprises.
- Better protection of your asset. The main downside of the current micro enterprise system is that you are liable for the company’s debts on your property and asset. So far you could only protect your house by having a notaire write a contrat d’insaisabilité. From January you will also be able to protect all your properties and land, as long as they are not used for your business activity.
- Tenants won’t require an authorisation from their landlord in order to set up their business from home, as long as the activity is based on the groundfloor of a building or house.