Do French entrepreneurs need separate work bank accounts?
Reader question: do I need a business bank account for my micro firm?
I am a micro-entrepreneur and have been told I must have a separate bank account for my work. Is this correct?
You are required to have a separate account if you earn more than €10,000 a year. However, this does not have to be a more expensive professional account, although this is recommended by the sole traders’ federation so, for example, you can get a business loan.
A law in January 2015 introduced the necessity for a bank account for micro-entrepreneurs, previously called auto-entrepreneurs. This was changed in May 2019 to apply solely to those with a turnover of more than €10,000 a year. There is no obligation for the account to be a professional account: it can be a simple current account. You have to open the account within the first 12 months of your business launching and it should be used for all business-related income and outgoings, including purchases and payments of social charges.
What's on offer?
Micro-entrepreneurs can pay themselves from this account and hold dedicated bank cards, cheque books and card readers if applicable. The government strongly advises all micro-entrepreneurs, even those with a turnover under €10,000, to open a separate account. It makes it easier to control fraud and for Urssaf to check your social security payments.
Thousands of micro-enterprises are created every year and, according to the Fédération des Auto-Entrepreneurs which campaigns for better rights for independent workers, banks often put pressure on clients to sign up for more expensive professional packages. This is not a legal obligation. However, the federation advises it may be better to consider a professional account as they can be better adapted to a work situation and, for example, make it easier to apply for a loan. Some banks now offer special auto-entrepreneur packages. La Poste offers one for €9.80 a month and online bank Boursorama offers one for €9 a month with a bank card included.
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This column is sponsored by Olaf Muscat Baron who is a Fellow of the Chartered Association of Accountants UK, a French expert comptable and an International tax advisor. He is the principal accountant of Fiscaly, an accountancy firm based in the Dordogne which serves individuals and businesses in or out of France. Please note that Fiscaly is only able to answer queries if retained on an advisory basis. See www.fiscaly.fr or call 09 81 09 00 15