P-D de Rouffignac

Difficult to comment on your particular situation but all "enterprises" - ie including an agent commercial or a web designer who works from home - pay a "taxe professionnelle" as you doubtless know, and under the new auto-entrepreneur scheme new enterprises will be exempt for the first three years. Where there is a mix of commercial and residential use within the same building (eg a shop with an apartment above) there is normally a seaparation for tax purposes, and indeed in the event of the sale of all or part. But each case is different so not easy to comment generally. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com  

In terms of selecting a business format for your enterprise (making and selling pottery) you could look at the new auto-entrepreneur regime which starts on 01 January. It would allow you a turnover of 80 000 annually without VAT charged or recovered, and a simplified form of paying your tax and social security - around 13% of turnover, based on actual rather than estimated earnings (the latter having killed off many small businesses in their first two or three years). It might also suit your partner as an alternative to employment (if that's the case) by the French company, as it is basically what we understand as self-employed. For 'services' and liberal professions, t/o limits are 32 000 and tax and SS payable at the higher rate of around 23%. Regarding using your home, under the new scheme, for business, the restrictions have been lifted regarding the use of 'ground floor' premises, so I don't think you would have a problem. You should sound out your local mairie and through them local groups of artists and craftsmen who can also explain anything that might be useful regarding the special status of artists (it's not my field, I'm afraid!). Re the auto-entrepreneur setup, it has been covered on this and other forums, and you can access a French website/forum www.auto-entrepreneur.fr - the forum may have covered the question of artists/craftsme, already. Hope this helps, and best of luck with your move and your venture. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

I really do hate labouring the point but I cannot not reply to Will's comments following my post. 1. I do not think it is fair to make a comparison between employed staff of an agency (= the good guys) and an agent commercial working on commission (= must be bad). Everyone is under a certain amount of pressure to sell, as I found during two years as an employee in an agency (which is why I became an independent advisor, being more comfortable in that role). . 2. Why do you assume people are pressured into signing a compromis after a viewing? Saying 'Yes, I am interested' is of no use to anyone if you really wish to buy. Signing a compromis de vente secures the property (in the buyer's interest) and gives him/her the chance to go through the document in detail with the agency representative, line by line if necessary. Better that than sending a 30-page document in French a week later, indicating simply where to sign. (This will happen of course but you will understand what you are signing/have signed). 3. Whether signed in the agent's office or later when sent to your home address, the buyer has ample time for reflexion - the delay between the initial visit and receiving the document by registered post at home, the statutory seven day cooling-off period - and longer if seeking a bank loan or mortgage. 4. I have not heard of details being 'glossed over' by either agents or notaires. Misunderstandings, when they do arise, are often due to lack of understanding French (so use an interpreter - you are committing a lot of money) and/or the property buying system, in spite of the pages of advice given on this forum and elsewhere. But I have found buyers are requently relucant to take/pay for advice and the next thing we see is a long, sad (I mean it) story appearing on Living France. 5. In the region where I work, two of the principle agencies have been in business for over 50 years, both of them until recently run by their original founders, now in their 80s. My local firm of notaires is now run by the grand-children of the original founders and comprises 5 partners and a dozen support staff, several of them speaking excellent English.  Of course agents work closely with notaires, it helps get things done (searches, technical reports, planning guidance etc) - and yes, they are well known at the Mairie too. These are people who have known and trusted each other since schooldays, and I feel mildly privileged to be accepted among them after only seven years in the region.  Why do you read anything sinister into all that? Local reputations take years to build, only a moment to lose. 6. No-one has any problem with buyers, sellers or anyone else seeking additional information or advice from another source, if that's what they want to do and are prepared to live with the consequences if it all goes disastrously wrong as a result. Personally I'd rather recommend people I know and trust and have been through many transactions with, for former buyers, now friends, some of whom now live 100 yards from my apartment and I see nearly every day! I can already hear the doubters saying 'Ah yes, of course they'll give you a reference, they're your f r i e n d s!' There are some situations in which you just can't win.   Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com

I remember some years ago my late father complaining that the tone of his golf club had fallen. When I asked him what he meant, he replied that it was 'full of estate agents and men wearing suede shoes' ! He added a third category which I will not repeat here, and I was so aghast at this pronoucement that I never really found out the connection between ones occupation and ones footwear. There seems to be a similar reaction on this forum and elsewhere whenever estate agents are mentioned. Do we see the same reaction when the shoe salesman obliges you to buy a pair of shoes, the insurance man a life policy or the car salesman a vehicle? Are property buyers frogmarched into the estate agent's office and forced at gunpoint to sign a compromis de vente? Of course estate agents etc want to make a sale but that does not oblige you to buy. As I have said on numersou occasions, the French property buying business is one of the most highly regulated and (consumer) protected in Europe, with numerou safeguards built into the system. The whole point about the compromis de vente is that it is a pre-contract, in a way a foretaste of what you are committing yourself to. By all means have a translation into English, but far better to get an explanation of what you are about to sign. English legalese is just as baffling when read by the layman. Seek advice from your estate agent, a notaire, a qualified expert, whatever. But it is not helpful to assume that everyone is out to cheat and rob you. If you would like the address of my father's golf club, please contact me. Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com  

I would advise on no account to commit to purchasing another property until you have sold your existing one, if the purchase of one depends on the sale of the other. Even in the so-called good times. Around 30 000 French people are curently caught in the bridging loan trap - basically they have bought a second property using a two-year bridging loan on their existing property (80% of its value normally) - BUT have failed to sell the first property within two years, and are now being pressed by the banks to repay the bridging loan with money they do not have. This is in addition in many cases to paying two lots of mortgage instalments for two years or more. Sell first, rent if necessary until you find something else. There is a wide choice of properties on offer and some prices, in some areas are coming down. If you lose a 'dream home' I guarantee you will find an even nicer one just arund the corner. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com  

As so often, headlines such as this are far too simplistic and do not take account of the realities of the French property situation. It is true that some properties, in some areas are coming down slightly in price but they have actually risen in Paris by 10.1% and by up to 5% in other cities. The city of Nice has recorded the highest rises in 2008 of 7.27% for apartments and 10.5% for houses (figures from Notaires de France:INSEE, 23 October 2008). My advice is always to do your research, look at niche markets and don't be unduly influenced by headlines. After all, the world's stock exchanges have 'crashed' and risen again within a matter of days. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

'Hébergement' is the provision of lodgings or accommodation, and is not a word used to describe rental agency services or anything to do with estate agency, which has been specifically ruled out of the auto-entrepreneur scheme (due to the need to be registered for VAT and of course have the necessary such qualifications such a business or law degree). And, Yes as a 'commerce' it would be subject to the lower deductions for social security/income tax and higher allowable rate of turnover. Peter-Danton de ROUFFIGNAC

It is not a matter of 'rules' but of custom that a deposit is paid over at the time of signing the 'compromis de vente' and this is held in a sequestered account either by the notaire or the agent, if he is authorised and insured to do this. The amount is not fixed and can be up 10% (or more) and it is taken as a sign of seriousness/good faith by the intending purchaser of the property. However, I have bought one property without handing over a deposit (in specific circumstances) and I have seen sales go direct to the final 'acte de vente' without signature of a 'compromis de vente'. In the case of new-builds a pecentage deposit (small) might be paid at the stage of reserving a plot or property to be purchased VEFA (off-plan) and there is normally a right to cancel and withdraw from the purchase, for example if the building work does not start on the daye specified in the reservation document. This can happen if the developer fails to sell the required number of plots before he can start building work and the completion date obviously slips or in extreme cases the project is cancelled. If all proceeds according to schedule, stage payments are made as the building nears completion (regulated by French law) with a final 10% handed over on acceptance by the buyer. As always the situation is fairly complex and requires a reasonable knowledge of the property business and French law to understand. Property buying in France is highly regulated for the protection of both buyers and sellers. Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com  

I think the impact of the new auto-entrepreneur scheme will be greater than some people have implied. At a conference last week on the new regime, it was noted that the various public agencies had so far received 500,000 expressions of interest (that's 1 per of the French population) and prediced that there would be over 100,000 new enterprise creations under the scheme in the first quarter of 2009. The CFE's are hopefully gearing up for this onrush. Regarding providing accommodation services, a document from the Government's small business service (DCASPL www.pme.gouv.fr) includes 'prestations d'hébergement' under one of the 'commerces' that would be eligible under the scheme, up to an annual turnover of 80,000 euros, along with 'achats/ventes, ventes à consommer sur place'. 'Hébergement' is specifically excluded from 'services' with the lower maximum turnover of 32,000 euros.   Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com    

I don't think one can assume that Polish workers working in France or elsewhere in the European Union are both (illegal) and (b) incompetent. The Irish construction boom (now sadly bust) was sustained by immigrant workers, many of whom at the same time revived the property rental business. Many of these same workers have now migrated to London and the Olympics project, and the image of the 'Polish plumber' is well estabsished over a number of years. Over the decades immigrant workers have traditionally taken on the lowest paid jobs and/or been prepared to accept lower wages, due to the lower living costs back in their home country. The European Union is founded on the principle of the freedom of movement of 'people, goods, services and capital'. These are the realities. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

I don't think the picture is as black and white as you suggest. I have worked since 2001 in the French property business and it is quite common for agencies outside France to act as 'apporteurs' - literally bringers of clients, and one of the largest firms I have worked for has agreements with a number of non-French companies acting in this role. After all, many of Britain's top estate agencies have an Oveseas Department, which is often the first port of call for an intending buyer. Often clients are brought to the office by someone from the non-French agency, and I have met several British, Irish, Dutch, and Scandinavian intermediaries this way. It is not uncommon for commission to be shared among a number of parties (making less available for everyone including the hard working negotiator) and can sometimes involve a non-French agency (bringing the client), a second French agency who perhaps represents the property owner, and the original agency the buyer. A three-way commission split. The buyer does not pay anything extra, we all get less, unless he/she chooses to use the services of another person, such as a UK lawyer, or - increasing these days, a property searcher or relocation adviser acting for the buyer or his employer. We would all like willing clients with cash in had to walk into the office and buy property direct, that that situaion is increasingly rare these days. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com     

The Ministry of Commerce/Small Business (DCASPL) has just published a new 24-page guide, the most detailed and comprehensive to date, including worked examples over a number of years etc. Link www.pme.gouv.fr/essentiel/loimodernisationeco/auto_entrepreneur_int2_bd.pdf (Note that there are underlines not hyphens in all cases between 'auto   entrepreneur    int2    bd.pdf' Regards, Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

Just to add a couple of words. On the French site www.auto-entrepreneur.fr there is a lively Forum on which the subject of the SIRET has come up for discussion. Some contributors are arguing that a SIRET should be made available under the auto-entrepreneur scheme but not a Kbis - the latter being regarded as essential for opening trade accounts with suppliers. I would hazard that if you wish to operate at this level, you will probably want VAT registration as well (in order to reclaim on purchases of supplies) and so probably may need to look at one of the other possible regimes. Peter-Danton de ROUFFIGNAC

In one of the recent reports on the state of the property market, it was noted that about 30,000 French people were caught in a bridging loan trap. They had taken out a bridging loan based on up to 80 per cent of the value of their existing property, repayable within 2 years, but have gone ahead and bought a second property - and failed to sell the first one within two years. Not only are they faced with two lots of loan repayments, but also if they reduce the sale price of the first property to get a sale (often being pressed by the banks to do so), the proceeds may not be sufficient to cover the bridging loan plus interest. Looking at the UK, an RICS report this morning shows the volume of sales down by as much as 52 per cent in some areas, and prices down by 12 per cent, with estate agents selling an average of only one property per week. As in France, there is currently an over-supply of certain types of property (including many buy-to-let apartments) and problems for buyers seeking finance. I always advise selling first before even starting to look for another property. It is invariably easier to buy than to sell, especially in these difficult times. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

Details of the auto-entrepeneur scheme are still being finalised and although there is a 'kit' available (you can download it online) which includes draft forms for registering your enterprise, most people seem to be waiting for something more definite in the next weeks. You could check with your chambre des metiers meanwhile, also on things like regulations. Note that under the auto-entrepenru scheme, the plan is you won't get a SIRET number, but like most things that might change once the civil servants start working on the details. Some people are arguing that a SIRET number is essential for dealing with suppliers etc, which might be applicable in your case, and note that if you are in the business of 'buying and selling' your turnover can go up to just over 80 000 euros. You cannot register for VAT under this scheme, but if your clients are the general public, they'll be buying from you at nearly 20 per cent less than the commercial competition; You cannot recover VAT on supplies of course, but under the higher turnover (ie 'buying and selling') your fixed tax and social security charge is just 14 per cent as opposed to just under 24 per cent for services (up to a T/O of 34 000 euros). And only payable on actual earnings. Sorry for a long winded reply but you need to weigh up all these pros and cons before you get started. But as noted you can start checking the hygiene etc regulations and doing your market research, planning your marketing, sorting out suppliers etc ahead of a possible 01 Jan start date which is only a few weeks away..... Hope this helps - Peter-D de R.

You need to visit your local 'chambre des metiers' and discuss this, including what (hygiene) regulations apply for preparing food, for example, in your own home for sale to the public. If this is going to be a part-time, low key activity, or even not (income up to 34 000 euros pa for providing a service) you might think of using the new 'auto-entrepreneur' scheme which comes into effect in January. This offers a simplified tax and social security regime, based on a 23 per cent (for services) payment monthly or quarterly, but only calculated and payable on actual - as opposed to - notional earnings. The present small-business regimes tend to kill off enterprises that find themselves struggling to pay fixed tax and social security based on money they have not earned. The registration process is simplified (ask the 'chambre des metiers') but other regulations regarding qualifications, hygiene rules etc will of course still apply. Hope this helps. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com

Yes, you can sign a 'mandat simple' with more than one agent, and also reserve the right to try and sell the property privately through your own efforts. POINTS TO WATCH: Agents sometimes get into disputes as to who first introduced the client to the property and is therefore entitled to his/her commission. Also whether a buyer was introduced by them or genuinely by the vendor him/herself. They will protect themselves by having the potential buyer sign a 'bon de visite' and I have known cases where they have sued a vendor for their commission. There are mixed views about the value of having more than one agent handle a property. If it is seen for sale in several agent's offices it can hint at desperation. Also, potential buyers get annoyed when they are sometimes shown the same property more than once by different agents (then disputes arise as noted above). Ensure that all the agents advertise the property at the same price to avoid confusion, as the price can vary according to the level of commission. If you find your own buyer, they will ivariably expect a price reduction, arguing that your are saving the commission, so you are not really gaining anything.   Your best option might be try a sole agent for, say, three months and see how you get on. Even in these difficult times, good properties correctly priced should sell within this time. Sorry, a long answer when a one-word reply would have done. Peter-Danton de ROUFFIGNAC www.francemediterraneanproperty.com  

Last Sunday night's edition of 'Capital' on M6 included an interview with the president of FNAIM, the estate agents' trade body. He reported that property prices overall in France have fallen by 1 - 2 per cent each month since the spring, and are predicted to have fallen by a total of 8 - 10 per cent by the end of the year. He also said that forecasts suggest that prices will continue to fall by 10 per cent in each of 2009 and 2010, before stabilising. An 'economist' on the same programme was broadly in agreement. I suppose this is good news or bad news, depending on whether you are buying or selling, though of course many sellers are also buyers....... P-D de Rouffignac www.francemediterraneanproperty.com

New auto-entrepreneur scheme The more I read about this, the more I am impressed by its breadth of application. A number of references of particular interest include the website www.montermonentreprise.com which gives an example of a photographer earning about 2000 euros a month. On this he would pay 23% combined tax and social security (345 euros) leaving him with 1 155 euros in his pocket (after paying suppliers etc) - considerably more than the average French person earns. Another site 'transversel' mentions those registering receiving a SIRET number in the normal way - there seems to be have been a question mark over this in earlier notices. I have also seen mentioned that having a SIRET number is essential if you wish to register a 'declaration d'insaissabilité' to protect your private assets from seizure - as recommened in the Government's own auto-entrepreneur kit. The site 'CreaStart' also refers to this. Part of the Government's auto-entrepreneur kit includes specimen invoices - in which a sample SIREN number is featured....... The 'transversel' site suggests that a special 'micro-assurance' offering professional indemnity cover should shortly be available for 220 - 350 euros a year. Also the fact that 'taxe professionnelle' is referred to in official publications (in the context of its not being levied for the first two years after registration) seems again to reinforce that working under the new auto-entrepreneur regime will be regarded as a 'proper business' and not just some part time activity as some people have implied. It seems that there is quite a lot of fine-tuning and interpretation going on, as the new regime evolves over the coming months and keeping abreast of new developments will be an interesting exercise. I will continue to add my two'pennyworth to the Forum as and when. P-D de Rouffignac www.francemediterraneanproperty.com    

Dear Imc - I think you have to take into account the sort of people the new auto-entrepreneur scheme is aimed at. In the words of the documentation produced by the French government these include specifically part-timers, job seekers, students, the retired - that is, essentially people who may have a basic income but wish to supplement it with something extra. I imagine someone like an IT student selling his/her expertise creating websites; retired business people offering consultancy on an occasional basis; or - a real case situation - a colleague who is a qualified counselor and wants to launch herself in France. Clearly the scheme is not aimed at large-ish enterprises, as there are limits on turnover. In a sense social security deductions are relatively high under the scheme - for example, a British person already retired and receiving a UK pension pays inordinately high French contributions the minute they start to work, for absolutely zero added benefit in return. I have had endless discussions with the various collection agencies on this point and was told I am helping the unemployed and families with lots of children! The whole French system could be simplified overnight if they adopted the UK rule of no social security contributions after retirement age - one has typically paid in for 40 - 45 years at this point - and if you decide to continue working, you pay tax on the combination of pension+income, less personal allowances and business expenses. When I have explained this to French officials they are amazed it is all so simple. (If you are retired and living in France with CEPAM cover, this is effectively paid for by the UK out of the contributions one has paid there over many years). Over the years reading this forum and others, the subject of older/retired British people moving to France and needing to earn a little bit extra before it's too late is a recurring topic, so I welcome the French scheme on their behalf. It also makes political sense if you take a broader view and consider Europe's evolving demographic profile - the age pyramid top heavy with older people living longer, the bottom base contracting due to smaller families and a decreasing working population. It is clear that the working population will be struggling to support the retired in years to come, and there is every need to help yourself to survive in old age. Any fiscal barriers to self-employment remind me of what used to known as the benefits trap. At least the proposed French scheme is a small step in the right direction, given its intended target group. Let's hope they don't manage to mess it up in practice. P-D de Rouffignac www.francemediterraneanproperty.com

Spot-on, Albert the I-G. Which is why I chose my words carefully, as the proposed new regime is still evolving. It might of course be possible to "cease trading" one business, pause, and then "start" another........... Peter-D de R.

Put simply, one of the disincentives to starting an enterprise in France is that social contributions in the early years are based on fixed amounts of estimated earnings - and payable whether you earn any money or not. It seems that in some cases you can plead your case and get a reduction, but this will probably have to be paid in later years. A possible solution could be the new 'auto-entrepreneu' scheme, due to start in January, under which tax and social contributions will be paid on actual earnings (if any) as a percentage of turnover. There is a thread covering this new regime on the forum. Hope this helps, P-D de Rouffignac www.francemediterraneanproperty.com

Just to say how refreshing it is to read this thread - what an articulate bunch we are and ready to help each other out! I have already learnt a lot, so thanks from me also to all the posters so far. Best wishes, Peter-D de R.

Hallo. You could start by looking at the website www.counsellinginfrance.com which lists English speaking counsellors by region, with a short presentation if you click on a name. The site also offers a number of other resources. I use it myself (I am an English trained counsellor and also work in the property business to pay the bills!) but have not had a single referral from it - yet. Regarding controls on psychotherapy in France, as in Britain the situation is very fluid and the word 'counsellor' which I prefer is simply not known here. I operate through a charity (association loi 1901) but starting in January 2009 you may know there will be a new simplified form of self-employment, which will include 'professions libérales'. Basically it is designed for small, part-time entrepreneurs and goes under the name of the 'auto-entrepreneur' regime. The main advantages include payment of tax and social contributions ('cotisations') based on a fixed percentage of turnover - around 23% in the case of services - and this is only payable as and when you earn. Up till now, even the smallest enterprise has had to pay high social costs, even if you earned any money or not. If you are retired you need to reduce these as much as possible, as what you get back from the French State is minimal (if you are retired and receiving a British pension). Regarding therapeutic choices, the profession is dominated by psychiatrists, psychologists and psycho-analysts brought up in the Freudian tradition (cf Lacan and others) who are trying to persuade the government to reserve the word 'psychotherapist' to their members only. A number of other professionals are opposing this, including the AFP-ACP (person centered counseling association) to which I belong. Regarding medicinal cures, the French are the world's largest pill poppers and I think the bigger problem is educating them generally about the advantages of the 'talking therapies' as opposed to taking drugs. It's an uphill battle. Hope this info helps. P-D de Rouffignac

New 'auto-entrepreneur' status I have just received - thanks to help from a Forum member - a copy of the Government's 'kit' outlining the proposed new status applicable from 01 January 2009. Over 11 pages it says nothing that's not already in the various press releases issued and summarised on this forum, though it does give examples of the simplified form of notification of the start of the new enterprise (as well as one for its closure). The document also stresses that it is provisional, depending on final confirmation of the enabling legislation, so it might be best to hang on till the definitive version is available, hopefully before the end of the year. The good news is there are no radical changes to what has already been announced, so it looks as though it might be a go-er. P-D de Rouffignac