FRANCE is tipping into recession and expats are hit particularly hard.
Unfamiliarity with French laws and practice and slowing trade and poor exchange rates with the UK are harming many businesses.
Mirror restorer and salesman from Basse Normandie John Street said he was struggling because he sells many of his mirrors to antiques shops in the UK.
“Generally speaking things are pretty bad in the antiques trade but I have weathered it better than some because I have a little niche, and I am trained in gilding.
“With the pound at about €1.20 rather than €1.40 as it was last year my profits are down about 15%. My customers are used to paying a certain amount in pounds - you can explain but they don't want to pay more than they have to.
“The dollar value also comes into play - the American trade has supported dealers in the UK over the years, but that has declined, so that has hit their profits too. If the Americans aren't buying from them they don't buy from us.
“Another problem is that a lot of my competitors never even register as businesses or pay tax - they flit between two countries and no one ever seems to pin them down.
“It makes it harder for those of us doing things properly, though I have heard the French and UK tax authorities are going to start working together more.”
Accountant Joanna Reintjes is trained in British and French systems and helps others establish businesses through her firm Account Revision.
She also has the added experience of running a gîte business near Mont Saint-Michel and says this year has been particularly hard.
“People left it late to book, which makes things more uncertain especially if a gîte owner has a French mortgage to pay.
“British holidaymakers have been put off by high ferry prices as well as by not getting much for their pounds.
“As for the gîte owners, if they work with the English market they may be linked to a holiday company price in pounds or offer a facility to pay in pounds, so they often hit harder than the holidaymakers themselves.”
She said she had to work hard to secure bookings.
“We had to do more marketing and be totally on top of enquiries. Even when people were booking very late we were one of several gîtes they were looking at - two years ago people were desperate."
She said expats in building trades were suffering as second home owners were unwilling to spend on their properties. Estate agencies had also seen a downturn. Setting up in France is more complex than in the UK.
Many who try are starting in business for the first time and also had language difficulties. She said chambers of commerce helped: “Some go out of their way to help English-speakers.” Some recent reforms would also be beneficial.
“The auto-entrepreneur status, which starts on January 1, will mean a person starting a small business can pay social charges only on what they earn, not a set initial rate, which at the moment is about €3,500 in the first year.
“There are also useful provisions in the Loi Tepa, which, for example, allow businesses to pay overtime without social charges on it.
Charges
“People who love France will still want to live here and take their holidays. Those who will survive in the next couple of years will be businesses that are prepared to tackle the bureaucracy and just get on with it.”
While Julia Holt, from Aquitaine is still in the process of winding up her first business, she said the experience had helped her prosper with her second - even with the slow economy.
She said getting a chartered accountant from the start would have helped. “It would have saved us a lot of grief with the greetings card business. We spent ages going round different offices. However it was La Poste's attitude that shut it down.
“They said even if I wanted to send a couple of cards in an envelope this was a parcel and not a letter and it was business merchandise - their tariffs started at €5.10 and we offered free delivery.”
However she said the new business Prêt à Plonger which sells swimming pools, was doing well. “We were worried about the weak pound. However so far it has not affected us.
“Expats are not buying homes but French people are building houses and want pools for them, and many of our customers have jobs here and the pound factor is not an issue to them.”
She added: “Our main selling point is personal service, which you can't always count on here. Some people don't seem to care, they just say 'this is the price, do you want it?'”
Photo: Restorer John Street believes being in a specialised trade is helping in downturn
