In the past starting a small business in France was an administrative nightmare and financially often not viable. I have been offered small bits of work in the past but had to turn them down. The old system meant that payment of social charges was based on a set amount for the first two years (3000€ in year one). A bill of 3000€ in the first year of a small startup is a definite turn off.

The new system, Auto Entrepreneur, (lautoentrepreneur.fr in French) is more like a self-employed system where you pay charges based on turnover. More information in English is available at startbusinessinfrance.com.

One article that caught my eye was 120,000 registered so far which I think highlights the fact that people want to work for themselves but couldn’t in the past. In the top five professions using AE are computer programmers – which suits me fine.

In Brief, from startbusinessinfrance.com

The Auto Entrepeneur system is a pay-as-you earn system that offers an easy registration process and the ability to pay your social charges and income tax based on a fixed rate of your turnover. The purpose of the auto-entrepreneur scheme is to make starting a small business simpler and less financially demanding in the early years. It is also a low risk option to testing your market because if you do not sell anything, you do not pay any social charges.

Auto-entrepreneurs are not allowed to be VAT registered and have a yearly turnover limit of 32,000€ for services and 80,000€ for trade. Social charges represent 18.3% of turnover for professions libérales, 21.3% of the turnover for services and 12% for trade. Income tax will add an extra 2.2%, 1.7% and 1% respectively.