Reader experiences: What it is like to be your own boss in France
With Covid raging in 2020, record numbers of workers opted to start their own businesses and the trend is growing this year. We look at the different ways of finding freedom at work in France and talk to those who have made the step
We look at the different ways of finding freedom at work in France and talk to 4 people who have made the step Pic: Branislav Nenin / Shutterstock
The holy grail of working in France has traditionally been the CDI – contrat à durée indéterminée – meaning you are employed by a company indefinitely.
Covid has changed that and many people are opting out of employee status to be self-employed.
In 2020, a record number of workers started their own businesses, and the trend continues in 2021.
The first five months saw 287,440 new micro-entreprises (also known by the old name auto-entreprises) registered – 100,000 more than the same period in 2020.
The type of business you choose to start can have big implications on how much you can earn, the taxes you pay and your benefits, such as maternity, paternity, unemployment, training and, eventually, pension.
The simplest is the micro-entreprise tax regime for sole traders and 87% of those new businesses chose this for its lack of formalities. Owners are taxed on turnover while the related business status enterprise individuelle is taxed on profits and requires accounts to be kept.
More formalities come with starting a company. Those with a single owner may be called EURL (entreprise unipersonnelle à responsabilité limitée) and those with multiple owners are SARL (société à responsabilité limitée).
We now look at four people who are their own boss in France.
Gary Margel - Garage owner - EURL
When Gary opened his car garage near Lyon in 2003, he knew he would have to set it up as an EURL – a company with one shareholder, equivalent to a UK limited company. Owning a garage that sold cars meant his business turnover would be higher than allowed under the micro-entrepreneur system.
He also wanted the extra legal security of having a more formal business set-up.
“It’s a lot better to have a limited company on paper for both parties, because the seller has more protection and so does the buyer,” he said.
The process of setting up a EURL was admin-intensive. “I had to go to the chamber of commerce with a business plan, and they say if it’s feasible or not. Then you can open your business bank account.”
This was followed by putting a public notice in a legal paper and applying to government bodies, including statistics agency Insee, social security payments agency Urssaf, the tax office and the commercial courts.
Then he was issued his company ID number, which allowed him to activate his business bank account, which must have funds in it in case of legal dispute. The final step was hiring an accountant.
The whole process “can take a little while”, he says, especially if different bodies request extra documents, “then you’re sent to the back of the queue”.
Having worked in both the UK and France, Gary has chosen to top up his UK state pension. In France, he pays himself a salary each month, with pension and healthcare deductions taken out according to his earnings, but he said: “I’ve never really looked into that too much.”
If he were to close or sell up it would need a similar amount of paperwork to setting up – while micro-entrepreneurs can close their firm online.
Owning his own EURL has given Gary the freedom to pivot the business to offer a support service for expats that ties in with his own expertise. As well as offering normal garage services, he also does part-exchange for UK right-hand drive cars and helps clients register cars in France.
With his office next to his house, he can fit his work hours around his clients easily. He enjoys work. “It’s half a job and half a hobby. I enjoy what I do and every day is different. I could never work for somebody else now.”
Steve - Part-time IT consultant - Micro-entrepreneur
Steve (he did not want his surname used) became a micro-entrepreneur when he and his wife moved to France from the UK to live in a holiday chalet in the Alps that they have owned since 2004.
Initially, they had planned to split their time between France and the UK as they moved towards retirement, living off their savings and off Steve’s part-time earnings in the UK.
“Obviously, the agreement the UK had on Brexit destroyed all that,” he said. Instead, they became French taxpayers and applied for French residency and a carte de séjour.
With contracting work in the pipeline, Steve spoke to an accountant about his different options.
Setting up as a limited company meant expensive registration costs, and, by comparison, “the micro-entrepreneur seemed ideal for someone like me who only wants to do a relatively small amount of work”, he said.
He registered his micro-entrepreneur status online, getting a French neighbour to double-check the form before he submitted it, and found the process simple: “It’s free, it’s easy, and a couple of weeks later your certification comes through.”
The downside of working as a sole-trader rather than a limited company means Steve must pay for professional indemnity insurance each month, costing him around 5% of his total income.
He says: “As a micro-entrepreneur, you are your business. There’s not a legal distinction between you and your company in the way there is for a limited company. So, if a client decides to sue you, they can come after your personal assets as well.”
Since 2015, family homes have, however, been protected.
The insurance gives him peace of mind that his personal assets are safe and, overall, the flexibility of the micro-entrepreneur status suits him and his current work-life balance.
On the day we speak, the sun is shining and he has just returned from a mountain hike, but in the next few weeks he will take on a new contract “for October and a bit of November, when the weather here is not so good.
“It’s useful to not have to live on the savings, and to have something interesting to do when you can’t go out.”
Jane MacAvock - Researcher/Translator/Teacher - entreprise individuelle
Jane eased into self-employment when working for a law firm in Paris and ended up doing translations.
“I started thinking about translation work in the art world, which is where my academic background is,” she said.
She went from doing translations for galleries on the side to leaving her office job four years later to work as a self-employed researcher and translator and part-time art history teacher.
She set up as a micro-entrepreneur, but had to change status as she went over the permitted annual earnings limit. “The threshold was somewhere around €36,000 at the time. I had a really good year and I went just over that amount.”
Her business had to become an entreprise individuelle with a new tax regime. The process was simple. “I just got a letter from social security agency Urssaf saying ‘you went over the threshold, you’re now an entreprise individuelle’,” she said.
In practice, it means a higher annual earnings limit and more admin.
Micro-entrepreneurs “basically record your income and you declare it every three months. It’s very simple.
“Now, I have to have proper software and keep proper accounts. The administrative work is pretty big.”
A pleasant surprise is that the tax office has been understanding if she makes the occasional accounting error. “If you go to them as soon as you realise, they’re always going to be more open to any mistakes, as they do understand their system is complicated if you’re on your own.”
She also pays higher contributions towards unemployment and pension.
“It will be worth my while further down the line. I’m in my early 50s, so I’m thinking about that.”
She can claim work-related expenses, including frequent travel between Paris, where she lives, and the south of France. She is thinking of moving south at some point, something her self-employed status would allow without too much difficulty.
A big benefit of being self-employed is that she has built a career around her interest in 17th century art. “I’m travelling all the time and I spend a lot of time in cold churches, but it’s pretty great. It’s fun a lot of the time, and I have a very nice quality of life.”
Mathilde Guillemet Translator and interpreter Micro-entrepreneur, profession libérale
When Mathilde and her family moved to France in 2019, a career change was part of the plan.
After years teaching translation and interpreting in the UK, she said: “I really wanted to do what I was trained for again. I was quite clear that I wanted to start my own business.”
As a registered translator and interpreter, she is classed profession libérale and started her micro-entreprise with that status – see note at end.
Mathilde found the online registration process “surprisingly straight-forward”, especially compared to other administrations she was dealing with.
She said: “I hadn’t had a social security number in France for years, I didn’t have CAF (Caisse d’Allocations Familiales welfare agency) for child benefits. All that side of things was more complicated to set up than the actual micro-entrepreneur status.”
While she wants to remain self-employed, she is unsure if she will continue as a micro-entrepreneur or switch to a different regime.
Micro-entrepreneurs cannot claim expenses for things such as work-related travel and also make lower contributions towards state pensions, unemployment and health coverage.
“In terms of benefits, being a micro-entrepreneur is very limited,” she said.
“I’m currently thinking about taking out private insurance so that if I fall ill, I get a bit more [financial] help.”
She is also saving for retirement independently with an assurance vie savings account.
Overall, she is pleased with the freedom the micro-entrepreneur status has given her. “A lot of people do it when they wouldn’t have before because it was so much more complicated.
“It creates employment in a different way, and I think it’s quite good.”
Apart from profession libérale, there are options for commercial and creative businesses. Each has turnover limits, with €72,500 a year for profession libérale and creative businesses, €176,200 for commerce. However, the thresholds for becoming liable to charge VAT are €34,000 and €85,000.
Exceeding the limits means having to quit micro-entrepreneur status to be taxed as a business.