Self-employment structures and categories

France offers several self-employed business structures. The multiple-structure system reflects differing needs in scale, risk, taxation, and social security, while allowing the state to tailor oversight and contributions to each profile.

Most small business start out as some form of enterprise individuelle, that is a sole trader business in your own name, where there is no separate legal entity created. You do not pay yourself a ‘salary’ or dividends from the business, any money you make from the business is free for you to use.

Prior to 2022, there was not much protection from creditors for personal assets under these set-ups, but now the default situation is that personal and professional assets are automatically separated.

Business assets consist of everything that is useful for the business activity. This includes, for example, business premises and business bank accounts.

Personal assets, on the other hand, consist of everything that is not included in business assets, such as bank accounts and homes.

This separation protects personal assets from potential business debts. However, if the entrepreneur fails to comply with tax or social security obligations, the tax authorities or social security agencies may seek repayment of their claims from both sets of asset.

The micro-entrepreneur structure

The micro-entrepreneur (also known as auto-entrepreneur) regime exists to make it easy to start small-scale with a business idea. It is a simple form of enterprise individuelle (sole trader business).

Administrative formalities are minimal and social charges are calculated as a percentage of turnover (the rate depends on the type of activity you carry out) and usually payable at three-monthly intervals. Tax can also be paid in this way (at 1% for commercial businesses, 1.7% or 2.2% for services) or under the usual bands but with fixed expenses allowances. 

The latter are currently 71% for sales and 50% or 34% for services. Furnished holiday rentals the allowances are 50% for rentals classified under an official star system or otherwise 30% (and other furnished rental is 50%).

Annual turnover under this scheme is capped (€77,700 for services / freelance work, and €188,700 for commercial activities, or €15,000 for unclassified holiday rentals.

Other structures

Once turnover levels rise, or if you have a lot of expenses you want to offset, you may want to set up as a traditional entreprise individuelle under the régime réel tax regime. 

This allows deduction of actual expenses and usually people under this set-up are in the VAT system, which requires you to charge VAT to customers but also allows you to recuperate VAT paid on supplies. It usually requires using an accountant to prepare the annual declarations, however their work is also tax deductible.

For those seeking clearer separation between the individual and the business, France further provides simple company structures such as the EURL (single-person limited liability company) among others. This provides a stronger protection for personal property. 

How do I register as self-employed?

You register via the official Inpi (National Institute of International Property) online portal for business registration in France (procedures.inpi.fr) and obtain a SIRET (a 14-digit code identifying a specific business). 

The site will forward your details to various other relevant bodies with which you need to be registered.

You may not invoice clients until registration is complete.

Note that opening a specific French bank account for the business becomes mandatory if annual turnover exceeds €10,000 for two consecutive years.

Self-employment categories

In France, the type of self-employed work you do is known as your activité. 

When registering, you must choose a category, as this affects tax treatment and social charges. There are three main categories:

1. Profession libérale

These are independent professional services. Examples include:

• consultants

• IT, marketing, media

• translators, writers

• coaches

2. Enterprise commerciale

This category is for buying and selling goods or services. Examples include:

• online retail

• shops

• import / export

3. Enterprise artisanale

This covers manual trades and crafts, and often requires French qualifications and registration with the Chambre de Métiers et de l'Artisanat (CMA). Examples include:

• builders, plumbers, electricians

• hairdressers

• catering

Regulated professions

It is your responsibility to check if your chosen profession is regulated in France. 

A number require recognized qualifications, as well as professional registration and authorization from a French body. Examples include building trades, healthcare roles (including alternative provisions in some instances) and legal professions. 

Authors and other creative people 

People involved in creative professions usually fall into specific categories. 

Authors, painters, photographers etc are considered to be an artiste-auteur. 

If a person is classified as such, they benefit from a special social security regime for people in that profession, from their first declaration of activity. You can create your business as an artiste-auteur via the Inpi website. 

Some crossover exists with micro-entrepeneur status - artiste-auteurs cannot charge for their work or most work-related activities under the micro-entrepreneur label, and cannot set up a micro-enterprise to deal with these. 

However, you can declare certain activities under a micro-entrepeneur label at the same time, for example, activities ancillary to the main artistic activity, such as workshops, courses, etc.

Performing artists generally do not set up a business, but rather are employees under short contracts and they can benefit from a special unemployment benefit regime called being an intermittent du spectacle. 

After registration

You must declare turnover to Urssaf (social security body), and file an annual French income tax return, even if income is zero. 

Most US citizens must also continue filing US tax returns (unless their incomes are very low). France and the US have a tax treaty to avoid double taxation, but compliance with both systems is required. 

How social charges are calculated for the self-employed

Self-employed people registered as micro-entrepreneurs pay social charges as a fixed percentage of turnover, with no deduction for expenses. Rates depend on activity type (sales, services or liberal professions) and are paid monthly or quarterly. This system offers simplicity, but can be challenging for those with high costs.

Social charges for self-employed people under the régime réel are calculated as a percentage of net income (turnover minus allowable business expenses), rather than turnover alone, although the method varies by legal status. They are collected by Urssaf and cover healthcare, pensions, family benefits and other social protections. 

They typically amount to around 40–45% of net income, though the effective rate is lower at modest income levels due to reduced or exempted contributions, and new businesses may also benefit from temporary reductions.

Once in the system, most self-employed people pay provisional contributions, based on previous earnings. These are later adjusted once actual income is declared, leading to either a refund or additional payment.

Artistes-auteurs follow specific rules, with social charges calculated on declared artistic income and collected via dedicated bodies.

In all cases, accurate declarations are essential, as social charges directly affect healthcare cover and pension rights.

The facts: what you need to know before you start

If you want to work as a self-employed person (travailleur indépendant) in France, you must have the right to do so first. Working without the correct status is illegal, even if no income has yet been generated.

To do this you must have a suitable residency long-stay visa or residency permit with the entrepreneur / profession libérale category which authorizes self-employment. 

You should obtain this before you arrive in France, by applying through the official channels at the French consulate and meeting the correct criteria. Typically this requires demonstrating an economically viable project or activity (business plan, income potential, resources), and meeting any sector-specific requirements (ie. professional qualifications in regulated fields).

Note that a standard permit issued under other headings such as visiteur (often used by retirees) or other non-work purposes such as study does not allow self-employment, nor do permits issued specifically for employment. 

Permits issued for family reunion reasons (vie privée et familiale) do, however, allow you to work in self-employment. 

If you have another kind of permit and want to apply for the entrepreneur / profession libérale category once you are in France, you can do so although the process is time-consuming and not guaranteed - the change is treated as a new permit application, not a simple validation.

You must meet the conditions for the category (viable business project, sufficient resources, etc), in addition to submitting a full dossier.

Once you have the correct residency status, in order to be officially self-employed you must then register your activity as such by choosing the appropriate structure.

What if I want to run a holiday rental property?

You do not automatically have to register as a self-employed person if you rent out a furnished holiday property. 

Holiday rental income is treated for tax purposes as commercial (BIC) income, so it is necessary to register the activity with the official Inpi online portal and obtain a SIRET. 

However, if you want to avoid this being treated as a self-employed business, you must register as an LMNP (loueur en meublé non professionnel).

This status is possible only if rental receipts are below €23,000 and less than 50% of your total household income from most other sources.

You are not automatically considered self-employed for social charges purposes.

Where rental incomes increase beyond the LMNP levels, you are classed as running a professional self-employed furnished rental business.

Recently, however, there has been an additional complication in that in many cases turnover over €23,000 from holiday rentals requires payment of business social cotisations even if you do not meet the full criteria for being ‘professional’. 

Some tax experts therefore caution against going over this - or engaging in any other activity involving payment of business social cotisations - if you are on a residency status that does not allow for running anything that may be seen as a business by the authorities. 

In addition to tax registration, in many municipalities you also must register a holiday rental with the local town hall and display a registration number on all listings. Local change-of-use rules may apply in Paris and some other cities.

In general, holiday rentals have been subject to increasingly strict rules in terms of taxation and authorisations in recent years, partly to free up more property to be used as main homes. Renting out a furnished property as someone’s home can be a simpler option, but is also subject to the rules on when the activity becomes ‘professional’. 

Renting out an unfurnished property is seen as a kind of investment income rather than professional and does not involve registering a business or paying cotisations.