Written by Aurélie Hermon. Translated from French.
Becoming a freelancer means being able to work in pijamas or in a café, not having to bear the absurd orders of a boss and not having to get up at 7am on Monday. But before enjoying your new life as a freelancer, you will have to register to invoice legally. And, no, it's not that complicated. We explain the steps to register under the French law for a number of different statues, including the advantages and disadvantages of each of them. Just follow these steps and you'll be running in no time!
1. The simplest options to become a freelancer in France: the status of "autoentrepreneur" (self-employment or micro-enterprise scheme) and individual company (EI)
Autoentrepreneur, micro-enterprise, individual company... With all these similar names, it's easy to get yourself in a tizzy.
Here, we will talk about the two simplest statuses to create and manage in order to work as a freelancer in France: the self-enterprise (or micro-enterprise) and the individual company.
Micro-Entrepreneur: the simplest option to start freelancing
First, here is a good time to explain the difference between autoentrepreneur and micro-entrepreneur: there is none. Indeed, in 2015, the social status of autoentrepreneur changes its name and became micro-entrepreneur. But the name of autoentrepreneur is still used frequently, so you can hear both.
In fact, a micro-entrepreneur (= self-entrepreneur) is someone who has created an individual company (EI) and has opted for the micro-enterprise tax system.
How to create a self-employed company (how to become a micro-entrepreneur) to be a freelancer?
It's very simple: just declare your activity on the official portal of the micro-entrepreneur, or the business counter, or if you prefer the offline option, by going directly to a Centre de Formalité des Entreprises (CFE) ("Business Formality Center").
The form will ask you in particular:
- The type of activity (artisanal, commercial, service)
- If you wish to opt for the payment of the tax in full discharge. This is an option that allows you to benefit from a reduced and simplified tax rate: you pay all your taxes and contributions once a month or once a quarter, and these are calculated according to your turnover. It is therefore an advantageous option in most cases because it allows you to pay nothing if you have not earnt anything. There is more information on the payment in full discharge on the website of the Union des autoentrepreneurs.
- If you want to apply for the ACCRE: it is an assistance offered to all people under 27 years (also accessible to unemployed and people in recovery), which allows you to pay lower expenses during the first three years of your activity. Do not forget to check the box and fill out the corresponding form (you can download it by completing the statement or ask the CFE).
All you need to do is attach a few supporting documents (scanned ID or photo taken with your smartphone, ACCRE form) to your file, send it and wait for to be awarded your SIRET number by mail: and here you are, you are a freelancer!
Good to know: you can start billing as soon as you submit the form! Then just mention "SIRET being awarded" on your invoices and quotes. Even if you have not yet received the letter, your SIRET may already be assigned: to find out, visit the Infogreffe website and type your name in the search bar.
Advantages and disadvantages of micro-entrepreneurship
The main advantage is simplicity: easy to create, but also easy to manage. Indeed, you will not have VAT to pay, very few charges, and there is not much to do at the accounting level:
- Create a bank account dedicated to your activity. This can be a personal account, no need to open a professional account.
- Keep a book (or an Excel file) of receipts-expenses, where you will note all your receipts.
It is also a status that is open to all (or almost all): for example, you can become a freelance micro-entrepreneur even if you are already an employee.
There are some disadvantages:
- An annual revenue cap is set: in 2017, 2018 and 2019, it is €33.100 per year for services activities. If you earn more, you will be forced to leave the micro-entrepreneur scheme.
- As you do not pay VAT, you cannot recover it.
- Micro-entrepreneur status is not advised if you have a lot of expenses to pay (for example, a lot of equipment to buy).
In summary: it is THE status that we advise you to start freelancing in France. It is very easy to create and requires little management time and fees.
EI and EIRL without micro-social scheme: for advanced freelancers
The individual company ('entreprise individuelle' - EI)
The second rather simple option to become a freelancer in France is to create an individual company, but outside the micro-social regime (that of self-employment).
The business remains easy to create (online or at a CFE counter) and the creation is always free if your activity is service-based.
The main advantage over the micro-entrepreneur regime is the absence of a revenue cap and the possibility of recovering VAT (it must also be paid).
On the other hand, the management is slightly more complicated than for a micro-enterprise:
- You will have to manage real accounts: annual accounts, accounting books ...
- Contributions are to be paid in advance, then they are regularised according to your actual revenue
The limited liability individual company ('entreprise individuelle à responsabilité limitée' - EIRL)
Limited liability is an option that you can also claim as an entrepreneur. It allows you to:
- Limit your liability to the affected assets (which must be declared), and not on all of your assets, as in the case of the EI.
- Choose to pay taxes on your corporate revenues (not on your personal income): you will then be able to pay yourself an income and dividends.
In summary: this is an interesting status if you want to avoid having a revenue cap. In return, you will have to pay more charges (including VAT), and management is a little more complex.
2 - More complex options to become a freelancer in France: single-member companies (EURL, SASU)
The following options are more suitable if your freelance activity starts off strongly (for example, if you signed a big contract) or when your business changes. In fact, single-member companies are real companies, and the formalities that go with them are quite complex.
Creating an EURL or a SASU
This time, it's more complex: to become freelancer as a EURL or SASU, we advise you to seek assistance from a chartered accountant. You will have to write articles of incorporation, fill out forms for the creation of a company, publish a notice in the legal notices journal and fill out a file at the CFE. Also, you will have regular and high expenses to pay even if you do not earn anything: this is not the best option for freelancers who are just starting out!
Similarities and differences between the two statuses
SASU and EURL are the two statuses that exist in France to create a single-member company: they are therefore suitable to those who create a company alone.
The main difference between them is the affiliation status: if you create a SASU, you must be affiliated with the salaried employees scheme (Social Security), unlike the EURL, where you will be affiliated with the non-salary workers scheme (and therefore at the RSI).
Also, EURL is automatically subject to income tax (IR), while the SASU is subject to corporation tax (IS). However, it is possible to opt for IR in SASU, or IS in EURL.
The advantages and disadvantages of each status
EURL allows for simpler management, and a higher remuneration because you will have less expenses to pay. But social protection is slightly worse.
SASU allows you to benefit from better social protection, but the management is more complicated, and you will have more expenses to pay.
In short
Becoming freelancer to work on your own in France is very simple: just declare a micro-entrepreneur activity (autoentrepreneur). This is the best option when you start because it is very inexpensive, and it is easy to manage.
Once your freelance activity grows, or if you think you will exceed the revenue cap in the first year, inquire about the status of Entreprise Individuelle: it allows, like the microenterprise, to pay charges only in relation to what you earn.
The option of a single-member company (SASU, EURL) should be considered if you want to lanch a more complex project and if you plan to have associates such as partners, freelancers or other companies
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