Running a Business in France: Business Sense

Setting yourself up in business or becoming selfemployed is never easy, and becomes increasingly complicated in a foreign country such as France. You will encounter different rules and regulations, high taxes and social costs, and the French bureaucracy will undoubtedly tax your energy and powers of perseverance. Yet it is still possible to work within the French system and many non-French arrivals have succeeded in doing just that. Here are a few pointers.

Am I ready?
The first thing is to be clear about where you want to live and what you plan to do, as one decision may influence the other. There is a huge difference between Paris and the other major French cities, between north and south, the coast and the countryside. For example, if you plan to offer professional services to business or private clients you need to be close to a fairly large customer base, whereas riding stables or a rural gîte will do better in the warmer southern half of the country in a recognised tourist area. Your choice of location should suit your lifestyle as well as your intended occupation.

You also need to take stock of your personal qualifications and previous experience, and what gaps you may need to fill – including your fluency in French. Nearly a hundred different occupations in France are highly regulated and you cannot set yourself up as, say, a hairdresser, electrician or taxi driver without recognised qualifications and various licences and permits. Formal certificates and degrees are needed for most professions and your local chamber of commerce can explain the procedures that enable you to have your non-French qualifications recognised.

If you lack prior practical experience you could try buying a business as a going concern and working with the owner for a few months until you are satisfied you can run it on your own.

It is a good idea also to assess your income needs as many occupations may be seasonal or part time, or may not generate sufficient income to make a living. Once you start work in France, you have to pay taxes and social security contributions that are higher than their British equivalents. Many budding entrepreneurs are put off by these and find it is almost impossible to earn ‘a little extra’ legally as a result of high social charges (cotisations).

These cost about €3,000 in your first year of self-employment and rise in the second and third years, more or less regardless of your income. The benefits you receive in return are certainly generous, from maternity to free education, unemployment, health care and pension. However, after a certain age you may have less use for many of these services and find you are paying out a lot of money for comparatively little return. Your earnings must be sufficient to enable you to pay your social costs and offer a reasonable living as well. The French government has at last recognised that the country’s high social costs are a major disincentive to new business creation and has promised reform.

Getting started
Armed with a bright idea or business plan, you can get a lot of help and advice from your local chamber of commerce (or chambre des métiers for certain artisan or craft occupations).

French chambers of commerce and industry (CCI) are quite different from their UK versions. France’s 155 CCIs are significant local organisations and their activities include registering new businesses, running training courses, providing consultancy services, owning and managing commercial concerns such as wholesale market, docks or the local airport, publications, market research, fairs and exhibitions, and operating commercial courts for the settlement of disputes.

It is likely that the bulk of your dealings will be with your local chamber. If your new enterprise is classified as commercial, your chamber of commerce plays a significant role in the preparatory stages. As part of their services to new entrepreneurs, a typical chamber of commerce will normally offer a short (half day) introductory seminar, explaining the procedures for setting-up and registering your business. This is normally in French although some chambers offer an English version. During this session the presenter will explain the different ways in which tax and social contributions are calculated and paid,the choice of business format, and potential sources of funding in the form of soft loans or subventions.

You can also ask for a meeting with a business counsellor, who can be either a full-time functionary within the chamber or, sometimes more usefully, a parttime consultant employed to advise on your specific business area. The consultant is normally a local business person and you may need to make an appointment if you require specific guidance concerning particular occupations from someone working in the same area. These services are normally free and include useful documentation, such as contact details of the various organisations with whom you will have to deal.

For a small fee – sometimes as little as €100 – you can attend a series of seminars. A typical fiveday programme includes presentations on legal structures, tax and social security, securing business premises, registration procedures, and how to present a business plan; accounting and bookkeeping; risks and insurance; and market research and marketing. The final day is devoted to case studies and presentations by officials from various organisations such as banks, law firms and social security. These are particularly useful for making personal contacts and meeting other entrepreneurs. Included in the course fee are a number of face-to-face meetings with an individual counsellor. If you feel you need this level of assistance, it will be time and money well spent.

The chambres des métiers et de l’artisanat (chambers of trades and crafts) are similarly important institutions, dating back to their foundation in 1925. There are currently 106 local and 22 regional chambers serving 800,000 trade and craft enterprises within France. The service of a typical chamber will include business registration, seminars and courses, advice and consultancy, supervising craft apprenticeships, promoting quality awards and organising trade and craft fairs and exhibitions. As their name implies, the 90 chambers of agriculture play a similar role for those involved in agricultural activities. Next month: Registering your business.

Peter-Danton de Rouffignac (MA LLM) is a business advisor who runs courses for anyone setting up a business in France. www.francemediterraneanproperty. com

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