Profession libérale vs Micro Entreprise

[miaviv]

I was thinking of setting myself up in business, dealing in expat

relocation, bilingual services, secretarial assistance etc..... I am

having trouble finding out enough information to guide me in the right

direction.  Does anyone know what are the pitfalls/advantages of a

profession libérale and a micro entreprise ?  What internet sites

could I look at that give some clear information either in French or

English ?  Any help appreciated.

Thanks

[zeb]

[quote user="miaviv"]I was thinking of setting myself up in business, dealing in expat

relocation, bilingual services, secretarial assistance etc..... I am

having trouble finding out enough information to guide me in the right

direction. Does anyone know what are the pitfalls/advantages of a

profession libérale and a micro entreprise ? What internet sites

could I look at that give some clear information either in French or

English ? Any help appreciated.

Thanks

[/quote]

A French friend who offers this service has gone down the profession liberale route, but you really need to get expert advice from an accountant.

This website may (or may not) help. Good luck.

http://www.apce.com/index.php?rubrique_id=300000112&type_page=IL&pays=1

[miaviv]

thanks for the advice, I've been on this site and yes, there are some

useful things but I just need someone to compare the options and tell

me which one is best for me, I suppose I'll have to find myself an

accountant.

[Nick Trollope]

Surely it is not a matter of PR v micro? "profession liberale" is a "registration" type and "micro enterprise" is a tax regime. You could be both, one or neither, surely?

I doubt if what you intend offering would be a "profession liberale", although, if you turn over less than 27,000€ pa, you could (indeed should) be a micro. Speak to your local Chambre de Commerce.

 

[Will]

www.apce.com is the place to look for information on setting up businesses in France, some pages are available in English. I agree with Nick that what you propose may count as a commerce rather than a profession. It is not necessarily better to be taxed under the micro regime, though. Our accountant has managed to show a lower profit, and hence tax and social security liability, for me under the réel regime in 2005 than under a micro regime in the previous year, despite a larger turnover. It is not that I have not worked as profitably, rather that the fixed percentage for expenses etc allowed as a micro can work either way. Another possible disadvantage of the micro regime is that you cannot charge or recover TVA.

Do consult a good accountant, who will also be able to advise on the best way to register.

[Nick Trollope]

[quote user="Will "]

Another possible disadvantage of the micro regime is that you cannot charge or recover TVA.

[/quote]

Not so I'm afraid, Will. With a micro, you are not compelled to account for VAT (but you can, should you wish to). The big advantage of a micro is it's (relative) simplicity.

 

[miaviv]

I've read a little more since I posted my original question and now know the following :

As has been suggested, micro entreprise is a tax status not an actual

company status (I didn't know that before !).  Anyway, I

understand that URSSAF contributions in 2006 are fixed at a rate of

6505 euros and would be 9757 euros in 2007 - this is for anyone setting

themselves up as profession libérale and would be paid in the first

year of activity (perhaps even first 2 years) then as results of the

company are known, these are adjusted and possibly paid-back if you

paid in too much.... etc. 

Not very encouraging for anyone starting a business in France. 

There is the possibility of benefiting from an ACCRE (aide création ou

reprise d'entreprise) help in setting up a company but certain

conditions apply and not sure if many Brits who haven't worked here

before would get this but don't take my word for it.......  If you

get ACCRE status, I think you don't have to pay contributions in the

first year....?

Hope I haven't confused the issue for anyone out there !  I

certainly understand it a bit better now..... but a good accountant

would be my next port of call.

[Jo53]

[quote user="miaviv"]I've read a little more since I posted my original question and now know the following :

As has been suggested, micro entreprise is a tax status not an actual company status (I didn't know that before !).  Anyway, I understand that URSSAF contributions in 2006 are fixed at a rate of 6505 euros and would be 9757 euros in 2007 - this is for anyone setting themselves up as profession libérale and would be paid in the first year of activity (perhaps even first 2 years) then as results of the company are known, these are adjusted and possibly paid-back if you paid in too much.... etc. 

[/quote]

I earned 18,000 euros in 2005, my first year as a prof liberale (and a micro BIC). I was not asked for anything like 6505 euros in cotisations that year. On some of the cotisation demand forms, mainly those to do with pensions, you had to put your 2004 revenues. If this was zero (ie 2005 was your first year), you were exempted from payment. This year's cotisations are being based on last year's earnings AFTER the 56% (I think) allowance as a micro BIC. This too takes me into a band where many cotisations are reduced. So in my second year, I am not paying anything like 9757 euros. Many of the forms have bands where you pay nothing at all if your profits are very low (below 5000 ish, but you'd have to check the figure).

I know this is a little vague (would you believe in the UK I was highly organised and did all my own accounts - that seems to have gone down the pan over here[blink]), but as the system has worked for me so far, you do not have to pay these high flat rates when your earnings and profits are low. The time you are more likely to get clobbered is in the 3rd year apparently. But get this from an accountant, not from me.

Remember also that you likely won't pay much income tax, unless your partner has a highish income. So cotisations are pretty much all the deductions you will get when your earnings are low.

BTW, if you provide services like translation, secretarial work and interpreting, I would have thought you'd be a prof liberale.

Best of luck

Jo

 

[tj]

 

At last, someone to speak up about this never ending nonsense that cotisations are fixed, THEY ARE NOT! and anyone setting up in business here in France is only obliged to pay health and pension minimum contributions in the first year around 1000 euros.

But be warned, if you are earning serious money they will get you later :)) But better to pay after you have earned some money right!

If your net revenu is less than 5000 euros, ( under the micro enterprise it is more then possible ) you never have to pay URSSAF, and less than 12000 euros only the minimum health charge around 350 euros .