Sole Legal Representative (for French NI)

[Deimos]

I am looking into becoming a contractor for a UK company

and, living permanently in France do not really want to set-up a French company,

French NI etc.  So I was wondering if

there is any reason why I could not set-up a UK company (owned entirely by

myself) and be employed by that company. 

I would take a nominal salary (probably just above the minimum wage) and

would declare myself as a “sole legal representative” in France for that

company and thus personally be liable in France for both the Employer and

employee NI payments.

The company would get more income that it would be paying me

so I would also periodically receive dividends, which I would need to declare

as income for French Income Tax (but not NI).

Does this sound “legal decent honest and truthful” (to nick

a phrase from the past).  Have I totally

misunderstood the system or completely overlooked something ?

Many thanks

Ian

[Nick Trollope]

In a word, no. If it worked, we'd all be doing it!! Because; a) The employers contributions are huge (about +50%) and the dividends would attract social charges. b) A UK Company does not absolve you/it from registering in France - so you'd be back to square 1. c) The admin costs of doing this (if it were possible) would be huge...

Etc etc.

That said, if you make it work, set up a consultancy to tell the rest of us how!

[Owens88]

I have seen this thread, or something like it, a few times.

I still haven't seen anybody authoritatively show that if you live in france (and pay taxes on your world wide income) you must have a company there even if your work is outside of france. (apologies to Nick if you have).

 

NB I am NOT talking about working in France and evading proper structures.

John

[Teamedup]

I think how it goes is that if you work for an overseas company and are based in France you have to become the french agent for that company and register that agency in France.

And that is what you will be doing isn't it Deimos, working for an overseas company from France.

[Deimos]

Background is tt really relates to a UK company that wants

me to do some consultancy work.  They

are offering me a contract based on 3 months notice with a minimum term of 6

months.  However, to go to the “grief”

of starting (and paying for” a French company seems a bit like “excessive”

whereas a UK company seems a lot easier (plus might avoid some though not all of

the high French deductions).  In theory

the contract will go on indefinitely but being realistic might last a year or

two.  I suppose I’m inclined to decline

the work just on the basis of excessive work for what will in practice be a

limited period.  Its not like I’m

starting a company that I wish to develop and grow in the longer term.  It then comes down to how they can get me

money in return for my work legally/”above board” without excessive costs and

grief.

Ian

[Nick Trollope]

[quote user="Owens88"]

I have seen this thread, or something like it, a few times.

I still haven't seen anybody authoritatively show that if you live in france (and pay taxes on your world wide income) you must have a company there even if your work is outside of france. (apologies to Nick if you have).

 

NB I am NOT talking about working in France and evading proper structures.

John

[/quote]

I'm afraid it is not a matter of what/who/where you pay in taxes, it is a matter of registration - the legal right to do what you do, IN FRANCE. This has nothing to do with EU rules on "free movement", it is about French fiscal law. If you are resident and work in France, you must register here (and will pay social charges as a result), regardless of how (or where)  you get paid. If it was that obvious, don't you think all of us (who have "offshore" businesses) would be doing it?

[Owens88]

Hi Nick

I think my point was that the original poster was to be resident in France but not working in France.

 If one works on a North Sea Oil rig, or inmtermittently for a london symphony orchastra or are of Richard Branson stature in a company ; if you work in the UK but live in France why must you incorporate in France?

Cheers

 

[Iceni]

Deimos said "living permanently in France" so we deduce that he is working here, using the "bum on seat whilst earning yr crust" rule. In which case he is initailly liable for French tax etc at least as far as UK taxman is concerned even if still resident or ordinarily resident in UK.

In the examples quoted by Owens88 work is carried out in UK etc NOT France so incorporation or similar is not required in France.

BTW if you are a director of a close company AFAIK minimum wage rules do not apply though taxman frowns if ALL remuneration is taken as a dividend. Not sure whether Prudence Brown has woken up and closed this stable door.

John

not

[Deimos]

Work would be done in France but for a UK company..  It was just a thought for reducing the “grief”

in starting up a French company for a limited period and for a single contract

(and maybe avoiding some NI by taking a low’ish salary from the company – lower

than the contract value).

Many thanks for the advice and comments.

Ian

[Will]

It depends on the duration of the work, and the status of the various companies involved. There are special European rules which apply to the offshore oil and gas industry, seafarers etc. I believe there also were once (a long time ago now) special concessions for IT contractors, but they were abused so much that they were withdrawn. Performers are a different case, and the likes of Branson have so many companies that they can use to be a bit creative about their affairs that there are ways around things (I am sure a Virgin subsidiary exists in many countries, including France). If you are taking existing work, or work of a similar type to that you were doing in Britain, without interruption, and you are not sure if you are staying permanently in France (i.e. you maintain a UK base of some description) then it is possible to be self employed on assignment overseas, which means you pay tax and NI in Britain but gain access to French health services etc through the E form system. But this too has to be set up properly, ideally before you move to France, and it lasts for a finite time - normally the French authorities won't allow you to do this for more than two years before you have to transfer your business to France. 

I think Deimos' best bet would be to consult the French Chamber of Commerce in London. They have loads of information on setting up businesses, including subsidiaries, in France. I personally see a lot of potential hazards, such as if you formally employ somebody, even yourself, you become subject to French employment law, which sets down statutory minimum salaries, compensation on termination of employment etc. It looks like an administrative nightmare, but there may be ways round it. I wholeheartedly agree with the comment that if it was easy, we would all be doing it. Many of the contributors to this forum, and this topic, have set themselves up in France and we have all ended up doing it a certain way, and this is the route recommended by accountants (even those who think there must be another way to deal with work carried out in France 100% for British clients, paid and banked in sterling, end up at the same conclusion once they have looked into all the implications).

[0zeb100ddMMyyyy0Falseen-USTrue]

Hello

I don't think it matters where you work if it is just sat in front of a computer I would just keep my head down and get on with earning some dosh. I didn't know the words "decent" "honest" "legal" or "truthfull" had a place in the business persons vocabulary.

Regards