Working as a self-employed expatriate in France means you will have to register your activity.
This step is mandatory for legal, tax and social contributions purposes.
Among other solutions, the most straightforward is the auto-entrepreneur status. Although the status is now officially called “micro-entrepreneur”, “auto-entrepreneur” and “auto-entreprise” remain primarily used.
This article will help you understand
- in which situation you should choose this status to start your freelance venture in France, as well as
- how to register yourself as an auto-entrepreneur and
- how to manage your auto-entreprise.
This article will also help you anticipate the next step and help you achieve a transition towards a more complex status once your business is up and running and exceeding the turnover caps.
Why Choose the Auto-entrepreneur Status in France as a Foreigner?
A Simplified Status
Also known as “micro-entrepreneur”, the auto-entrepreneur is a solo entrepreneur who benefits from :
- Lighter accounting,
- Reduced social contribution formalities,
- VAT exemption up to certain caps.
In addition, registering as an auto-entrepreneur is free, simplified, does not require any capital, and the entire process can be rather quick.
The status was built to stimulate business creation for solo entrepreneurship, and place the entrepreneur in better conditions to register the new business under a more advanced status later on.
A Foreign-Friendly Status
Depending on your conditions of stay in France, registering as a foreign auto-entrepreneur in France can be hassle-free. EU citizens have to follow the same process as French nationals. As for non-EU citizens, they will have to include their residence permit to the application.
What are the Requirements to Register as an Auto-entrepreneur in France?
General Requirements to Register as an Auto-entrepreneur
The auto-entrepreneur status is open to anyone, with only a few specific activities being excluded from the scheme (farmers, artists, lawyers, etc.). As such, you can become an auto-entrepreneur in France if:
- You are an individual (a natural personal, as opposed to a legal entity)
- You are over 18
- You are residing in France (with a mailing address, which can be obtained through domiciliation services)
- You are not prohibited from managing a business
- You are not under guardianship (tutelle) or a protection for vulnerable adults (curatelle)
- You are an EU national or have a resident permit
- You have a bank account in your name in France, which will be dedicated to your freelance activity exclusively (in some cases you can use your personal bank account, but you will still have to open a bank account in France)
The status is compatible with other activities such as work as an employee,, student or retired worker.
Additional Requirements for Foreigners
For EU citizens, the requirements for starting a business in France as a foreigner are the same as French nationals.
For non-EU citizens, you will need a proof of residence in France:
- French residence permit (carte de résident)
- Long-term EU residence permit
- Temporary « private and family » or « entrepreneur » residence permit (carte de séjour temporaire « vie privée et familiale » ou « entrepreneur/profession libérale)
- Multi-year « Talent Passport » residence (carte de séjour pluriannuelle « passeport talent »)
Obtaining the relevant residence permit is a prerequisite to register as an auto-entrepreneur. Formalities to get the residence permit must be dealt with prior starting the creation of the micro-entreprise.
Hopefully for you, we have a lot of tips on how to get your visa as a self-employed in France if you don't know where to start.
Now, let's see how to start and manage your business as an auto-entrepreneur in France.
Register as an Auto-entrepreneur: Step by Step
Step 1: Online Registration with the CFE
The first step is to register your activity online with the dedicated URSSAF portal. For this purpose, you will have to create an online account. Once your account is verified, you can fill in the registration form (déclaration d’activité), which will include the type of activity you want to pursue, your personal information, and social and tax information. Based on the activity you select in the drop-down menu, your activity will be categorised under one of the following categories:
- Commercial activity (activité commerciale)
- Artisanal activity (activité artisanale)
- Professional activity (profession libérale)
If your activity belongs to the commercial or artisanal categories, you will be automatically redirected to the relevant platform (CFE) at this stage.
At the end of the process, you will be asked to attach a copy of your ID card, passport or residence permit before sending the form.
Note: From January 2023, all formalities related to French companies, including starting a business as an auto-entrepreneur, will be managed through the INPI portal.
Step 2: Registration with the RCS or the RM
If your activity is commercial or artisanal you will have to register respectively with the Registre des Commerces et des Sociétés (RCS) or the Répertoire des Métiers (RM). This formality is free for auto-entrepreneurs with the RCS, but is fee-based for the RM.
Step 3: Receiving the Registration Documents
You will receive a Siret and Siren number, 8 to 15 days after the online registration, by mail. These numbers are your company ID numbers which will be used for any future formalities.
Within 4 to 6 weeks, you will receive your affiliation certificate from the social security services, certifying that you are now attached to the social regime for independent workers.
Bonus tip : you can start invoicing before you receive your Siret number. To do so, add “Numéro Siret en cours d’attribution” on your invoice, where you put your company information (usually in the top left corner).
Managing your Auto-entrepreneur Business
When invoicing, you must comply with some formalities such as indicating your company’s info (Siret number, address, etc.) and write the invoice in French whenever possible (a bilingual invoice will be accepted for international clients).
For auto-entrepreneurs exempt from VAT, you will have to mention the following sentence, preferably right under the total of your invoice: “TVA non applicable, art. 293B du CGI”.
Invoices are to be saved for 6 years for professional activities and 10 years for commercial activities.
In France, self-employed workers are responsible for paying the social contributions (cotisations sociales) themselves. You can choose to pay them monthly or quarterly.
At each due date, the auto-entrepreneur declares the previous month/quarter turnover directly online on the dedicated platform, even when there is no turnover*. The contribution rate will vary depending on your activity category:
- Commercial activities: 12.8%
- Services and professional activity: 22%
The rate of contributions to professional training (taux de contribution à la taxe professionnelle) is added to the previous rate as follows (between 0.1% and 0.3% depending on your type of activity)
Bonus Tip: If you forget to declare your turnover to the social contribution services (URSSAF), you will get a fine. Incidentally, this is rather inconvenient when your turnover is zero as you will end up paying the fine out of pocket.
However, if this is the first omission, you can declare the missing turnover immediately and contact the URSSAF services to appeal for suspending the fine by explaining your situation.
Income and Property Taxes
Every year, self-employed workers in France declare their income… just like everyone else !
Income will correspond to the annual turnover of the freelance activity. Note that when you declare your annual auto-entrepreneur income to the tax services, you will also have to declare your other revenues.
For example, if you have revenues from an employee activity, you will have to fill in the “employee income” form (formulaire 2042), in addition to the “additional income” form (formulaire 2042C, déclaration complémentaire).
In addition, every company is subject to the property tax (cotisation foncière des entreprises), which is linked to the premises where the activity is carried out and is related to the annual turnover.
Auto-entrepreneurs are exempted from this tax for the first year of activity.
What Are the Limitations to the Auto-entrepreneur Status?
Turnover and VAT Caps
The status was created to help launch a business or for side activities. With that in mind, there are limitations to the annual turnover an auto-entrepreneur can report :
- 188 700 € for commercial activities ;
- 77 700 € for services.
When exceeding the cap, the freelance cannot remain under the auto-entrepreneur status. This means you will have to switch to a more complex status with heavier accounting formalities.
Additionally, another cap was put in place for VAT exemption:
- 85 800€ for commercial activities
- 34 400€ for services
This means that when exceeding the VAT cap, the auto-entrepreneur has to start collecting and paying back VAT.
The auto-entrepreneur status does not allow the freelance to claim any business expenses.
Because you cannot declare your real business expenses, the tax services will automatically apply a 34% deduction on the annual income declaration, to cover some of these expenses and prevent you from paying income taxes on expenses that were never used as a revenue for you.
For activities with low expenses it can still be viable. But for activities requiring regular and costly business expenses, it means that these expenses will be taxed as revenues.
The company and the auto-entrepreneur are not distinct, as this status is a sole trader with a company registered under his own name.
As such, the entrepreneur has been historically liable for the company’s debts.
But good news : this status has been revised with the intent to add limited liability to the entrepreneur. However, the protection level remains unclear.
Looking Forward: Alternatives to the Auto-entrepreneur Status
When an auto-entrepreneur reaches the turnover cap or when the other limitations are too important for the type of business the freelance wants to start, there are other options.
Entreprise individuelle (EI)
The “entreprise individuelle” is a sole trader company, without the simplified accounting and formalities.
This type of company used to cover several status, the auto-entrepreneur status included. Among these status, some were working under limited liability for the entrepreneur (the EIRL status for instance), while the others were not protecting the entrepreneur against the company’s debts.
With the recent law change, some status have been removed, to ensure the same protection against liability to all solo entrepreneurs.
EURL or SASU
The SASU (Société par actions simplifiée) and EURL (Entreprise unipersonnelle à responsabilité limitée) are two types of one-person business called “société”, with liability limited to the business capital.
They are rather complex structures to incorporate and manage so you will need the help of a lawyer or expert comptable to help you. But if you're ready to put in the money and time take a look at our in-depths articles helping you get a better understanding of SASU and EURL.
The freelance is employed by the umbrella company, which is in charge of all the social contributions and tax formalities, while the freelance remains totally independent in carrying its business activities. As such, the freelance remains in charge of finding and carrying out assignments with his own clients.
The portage salarial status allows you to:
- Be attached to the employee regime, giving you access to a better social protection
- Obtain reimbursement of business expenses
- While having no turnover cap
If you want to learn more about this status, you can have a look at our dedicated article or book an appointment with our team, this is our expertise!
The auto-entrepreneur status has many benefits for a freelance who wants to quickly launch a business in France, with no capital.
However, make sure to look into all the aspects of the status before taking the plunge.
Social protection is not as strong as other status, and income taxes might not be adapted to your activity if you have significant business expenses.
Additionally, the status can be an issue for other unrelated formalities such as getting housing, getting a loan, etc.