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Company Formation France



Open a Business in France as an Auto-Entrepreneur

Updated on Tuesday 13th July 2021

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Open-a-Business-in-France-as-an-Auto-Entrepreneur.jpgStarting a business in France as an auto entrepreneur refers to a person who wants to set up a small business in his or her own name. The auto-entrepreneur is also known as micro-entrepreneur and it defines the status of having a micro-enterprise. This type of activity is generally suitable for those who want to work as freelancers and the micro-enterprise regime was created so that such persons can easily register and pay taxes accordingly. 
If you want to open a business in France as an auto-entrepreneur, you can address to our team of specialists for in-depth information on all the registration steps. Our team of consultants in company formation in France can present the advantages of this structure, the taxes you will be liable to, as well as the accounting compliance procedures you will have to meet. 

What is the tax regime for a French auto-entrepreneur?

The French auto-entrepreneur, or the micro-entrepreneur, has its own tax status, which is determined by the fact that the structure does not represent a legal entity, separate from a legal point of view from its founder. Thus, the owner and the company are the same and this means that the structure will be taxed based on the personal tax system applicable in France
Those starting a business in France as an auto-entrepreneur should know that they will be the owners of the company, while being self-employed in the same company. In other words, the auto-entrepreneur has the same characteristics that are commonly know for the sole trader, through which an individual can open his or her own small business, while being fully liable for any debts the business may have. 
An important aspect that should be taken into consideration when opening a company in France as an auto-entrepreneur is that this structure does not impose a minimum taxation level with regards to social contributions, as they will be charged based on the sales of the company. Provided that the company does not have any sales or revenues, the business owner will not be required to pay social contributions. 
From an accounting point of view, there are numerous benefits as well; in general, businessmen who will open a company in France are required to maintain accounting records and books of accounting that can present all the company’s financial operations. The auto-entrepreneur has little obligations in this sense, which makes it ideal for those who do not have much knowledge regarding accounting procedures. 

Important tax considerations when starting a business in France as an auto-entrepreneur

Regardless of the company type one will open here, as long as the company will carry out commercial activities, a tax liability will appear in a form or another, based on the legal entity under which the investors develop their operations; companies can be taxed based on the personal income tax system or the corporate income tax system and you can request in-depth information on the particularities of both systems from our team of consultants in company registration in France; below, you can discover the main tax considerations applicable to the French auto-entrepreneur
  • the maximum turnover threshold one can have when starting a business in France as an auto-entrepreneur in the services sector is of EUR 72,500 per year (the same applies if they develop professional activities);
  • those developing sales activities or operate in the catering or accommodation industries can have a turnover of maximum EUR 176,200 per year;
  • a company can develop both services and sales activities, but the auto-entrepreneur status will be maintained as long as the overall business turnover is of EUR 176,200, while the services component represents maximum EUR 72,500 from the entire turnover;
  • please mind that before 2018, the French auto-entrepreneur was not required to pay VAT, but this obligation is now applicable in certain situations;
  • thus, micro-companies with a yearly turnover above EUR 34,400 (for services based businesses) are required to pay the VAT;
  • the same applies for those involved in sales activities, and if the turnover is above EUR 85,800, the company will be liable to VAT. 
For more details regarding the payment of the VAT in France, you can access the website of the French Tax Authority. You can also request in-depth information on this subject from our team of consultants in company formation in France, who can advise on the tax and VAT obligations imposed when you develop an online business.  
Please contact our team of specialists, who can help you in the process of starting a business in France as an auto entrepreneur. You can rely on our team if you need to apply for business licenses or if you are seeking for a suitable office space for your company. 

Meet us in Paris

Call us now at +33 9 73 22 01 51 to set up an appointment with our lawyers in Paris, France. Alternatively you can incorporate your company without traveling to France.

As a BridgeWest client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in France.