Investment, Business & Self-Employment in France

INFORMATION FLASH SEPTEMBER 2012: Socialist government go for business destruction.

After the socialist François Hollande was elected president earlier in 2012, and after his socialist party obtained a majority in the National Assembly, people waited to see what type of action the president and government would take in face of the crisis.

Now we know: traditional socialist fare: tax hikes on everything that moves, and 6000 more civil servants in 2013. Here are just a few examples:

  • 75% tax on salary about €1 million. This will make it almost impossible to attract top talent to France, and some businesses have begun moving their corporate headquarters out of France.
  • Social charges on capital gains on real estate owned by non-residents. This is a violation of EU law and possibly of a number of bilateral social security agreements.
  • Increased wealth tax.
  • Increased income tax for everybody, by freezing the tax rates instead of indexing them with inflation.
  • Tax exoneration of overtime scrapped.
  • Reduction of the inheritance tax-free allowance.
  • Increased tax on business.
  • Increased tax on capital income.
  • Many town halls have drastically increased the local business property tax CFE so some small businesses find themselves having to pay up to eight times as much CFE tax in 2012 as in 2012. It is not an error: up to 700% CFE tax increase.
  • The 2013 budget included a measure to oblige self-employed using the simplified auto-entrepreneur scheme to pay the same social charges as in the normal scheme. An increase of 15% based on the present social charges is expected.

My conclusion is that France is becoming even more unattractive for business than it was already, not least because the tax environment is constantly changing. Hence, even if you make a business plan based on actual taxes and laws, there is a significant risk that future tax increases and other law changes may ruin your project. Starting a business in France today is more or less like building a castle in the sand. It only lasts until the next wave flushes it away. The new government show no understanding of what is needed to make businesses successful, a necessity for growth. Their forecasts are based on unrealistically high growth rates. France is going for bankrupt and business destruction.

I strongly discourage any investment and business creation in France under these conditions.

"Solicitors in south east France have told me about how sleazy their region is"

(Quote by a French legal professional).

The French have a strong national identity, but in the south, and particularly Provence and the Riviera, the regional identifies are even stronger. They may be so strong that they get higher priority than law and justice to the detriment of anyone not from the region.

Friends in private and public sectors group together in what has been called criminal activity in the case of Jean-Noël Guérini, socialist senator and president of the Bouches du Rhône département council. He is accused of favouring his brother's company when attributing public contracts. The scandal is now so important that the Socialist Party is busy distancing itself from Mr. Guérini. Justice has not yet spoken.

Criminal activity may also hit locals, though. That happened in a particularly serious case where a CEO, Richard Armenante, in charge of a successful business in Marseilles was harassed for 15 years by a crook named Guy Mariani. Already before it started in 1996, Guy Mariani had been convicted three times. Nevertheless, the court in Aix en Provence illegally pronounced him judicial administrator of Richard Armenante's company, illegally moving the jurisdiction from Marseilles to Aix en Provence. Then president of the Tribunal de commerce in Marseilles, Jean Aubert, was in fact involved in deliberately targeting people who had attracted powerful enemies, handing their files to the convicted crook Guy Mariani with the deliberate aim of completely ruining the victims.


Guy Mariani had falsified countless documents, fabricating all the charges. Mr Armenante and his business was ruined, lost his house and his health and is now 50% handicapped. He spent six months in jail, falsely condemned by a corrupt justice system. Only 15 years later did justice clear him and condemn the crook to seven years in prison and €750,000 fine. A magistrate, Alain Serieyx, at the time president of the Chambre régionale des comptes, has witnessed that moving the jurisdiction to Aix en Provence and illegally appointing Guy Mariani as judicial administrator was part of a plot to destroy Richard Armenante morally and financially. You can read his original statement here. It's only one page. Further witness statements can be read here.

Communique_Presse_Armenante_Vs_Mariani_2010. PDF, new window.
Injustice Journal_Top_Alerte_October_2011. Brief summary, Mr Armenante cleared after 15 years. PDF, new window.

Marseilles is a case in itself. The city managed to clean up the classic mafia many years ago. However, it has once again become the Chicago of France in a modern version. The organised mafia no longer exists, but its place has been taken by young people of north African origin living in concrete towers in the ghettos where they have been piled up without many prospects of any meaningful careers or lives. They thus handle the region's drugs needs in each their own ways. The number of shootings and executions between them has skyrocketed. Money transports are regularly violently attacked in daylight by massive force involving firearms and explosives.

Jacques Médecin was mayor of Nice from 1966 to 1990 when he fled to Uruguay under suspicion of corruption. He was extradited to France in 1994 where he was convicted and jailed.

Jacques Médecin on Wikipedia in English - only a brief summary.
Jacques Médecin on Wikipedia in French. Longer article.

According to a good friend who has worked as an American-French lawyer in Marseilles, southern France is simply too corrupt for investing. He strongly discourages it.

The rest of France is not without corruption of course. Former president Jacques Chirac was condemned for fraud in 2011 in connection with fictive employees at the Paris city hall when he was mayor, for the purpose of skimming public funds off to benefit his RPR Gaullist party.

Alain Juppé was also condemned on these charges, but that did not prevent president Nicolas Sarkozy from appointing Alain Juppé to the post of minister of foreign affairs. At the time of writing, 2011, France's minister of foreign affairs is a condemned crook. That's ok if you're one of the friends.

Jonathan Fenby has taken the trouble to write a 420-page book, 'On the Brink', about corruption in France.

For further examples of funny practices in France, you may want to read the page about professional practices in France, courts, administration, crime and fraud.

About general French cheating mentality, read more on this Streetwise-France page.

About dubious French commercial practices, read more on this Streetwise-France page.

Also read my page about travel warnings in France.

Distorted Competition

The important part of the French business world is not what you see on the surface but what you don't see underground. Friends' connections are numerous and span all private and public sectors of importance. It would be wrong to think that if you start a business, then that has nothing to do with the public sector. You can certainly do it, but you will be up against a hidden competition that consists of taking your business revenues in taxes and handing them out to your competitors.

When considering whether to get involved in business in France, do yourself the favour of reading this excellent, humorous, witty, and sarcastic article about how French industry revolves around politicians in the centre of the French universe:

Spiegel in English: Bonjour Tristesse: The Economic and Political Decline of France

The following article from This French Life is also worth reading, as it adds to the insight:

How the 'museum' that is France is slowly changing

The French government, regional councils and elected politicians say all the time that they want to attract investments and businesses to France. But what you need to understand is that they want to attract business so that they can further their own careers and causes by showcasing new businesses sponsored by them. Crisis or not, they all dispose of budgets of unknown sizes destined for handing out to friends starting the type of businesses they'd like to see. People who know how to lobby these politicians can obtain vast, even ludicrous subsidies for their businesses or associations. The way to make a business or association work in France is to find a way to get access to public money. If your project is politically correct, they may bend over backward to assist you. Don't worry if France is going bankrupt because they keep spending €3 for every €2 in tax revenue. Your politician 'friends' have already taken care of themselves, so they will still be there to assist you while the country is going over the financial edge.

If you prefer going it yourself, you may be up against all the difficulties imaginable, whether legal or not. The French hate competition. They see it as the incarnation of evil from the Anglo-Saxon capitalist world. If growth and business creation is not decreed, or at least perceived as decreed, by the public sector, then it is not worth having it, and it must be combatted as vermin. Difficulties may also happen if you start competing against a lobbying group such as taxis.

An innovative company in Avignon, EasyTake, got the idea of providing local discount transport. They were successful but attracted the ire of regional taxis who started demonstrating and taking EasyTake to court. The taxis managed to get a partial condemnation of EasyTake. They also managed to make EasyTake lose one of their two licence types, meaning EasyTake is no longer allowed to transport one single person - a restriction meant to discourage competition with taxis in the remaining type of licence.

Ryanair started its first French hub in Marseilles Airport in cooperation with the local councils and the airport when the new low-cost terminal was launched. But it didn't last long before Air France and their unions lobbied the French district attorney to take Ryanair to court over the aircraft crews' salaries being subject to social security charges in Ireland instead of France. Under president Sarkozy's reign, France had published a decree making such salaries subject to the high French social security charges in violation of European law. As a result, Ryanair announced the closure of the Marseilles hub and scrapped all their routes going out of the Marseilles hub, amounting to half of all the Marseilles flights. As soon as Ryanair was out, Air France announced the opening of several low-cost routes from the same terminal under their low-cost brand Transavia. What a funny coincidence. However, it would seem that after a reorganisation of their flight planning, Ryanair then reopened at least the same number of routes that they had cancelled, but without opening a hub in Marseilles. The planes just fly in, offload and reload, then take off. They don't remain overnight. EasyJet is subject to a similar law suit. We are still waiting for the outcomes.

"In 2010, police arrived and handed her a 30-day notice to close the business and leave France". This is how Adrian Leeds' Parler Paris newsletter of 8 April 2013 introduced a case of an American who had done everything by the book to invest in France and start a successful gourmet pet bakery and grooming salon in Paris. "Hat was forced to leave France, having lost seven years of her life's work and ambitions and all of her finances", the newsletter continues. Some civil servant didn't like her and her business, so it had to be destroyed. Destroying her business and deporting her was most likely a violation of the Convention of Establishment between the US and France, convention that makes it a treaty right for citizens of each nation to start and run businesses in the other nation and to obtain the necessary visas and work permits. But what the law says has no importance when the French administration act to destroy citizens. The French civil service is run by prejudice and other sentiments, not the law. France is in that aspect a banana republic. At the same time as they are destroying the foreign businesses they have already attracted, France is running PR campaigns to attract new business and investment from abroad. The problem with France and business is that they fail to understand that it's not enough with a PR campaign to attract new businesses, and that they also need to assure that the continuing business climate is acceptable for the businesses already there. Another more fundamental problem in French mentality is that they hate the success of others, and that those who do nothing expect the same standard of living as those who work hard for their success. Hence, a civil servant who does nothing else than fart in his chair from 9 to 5 for 40 years, and destroy the works of others, cannot get into his thick head that someone who invests his savings and works hard to succeed may earn more than him.

France can be fiercely business destructive if a business is not seen as politically correct.

Add to the above the risk of the euro exploding or imploding or whatever one wants to call it. The euro was constructed on a political foundation against all economic wisdom about a single currency requiring a single economic government. This is why the euro is going from crisis to crisis without a solution in sight. There is no guarantee that the euro will exist next year. If the euro goes away, a new franc may be devalued 20% to 30%, meaning your investment will instantly lose 20% to 30% of its value.

Still Want to Start a Business in France?

In case you still want to risk your money, time and health in France, the rest of the page contains practical information, but it does not tell you how to lobby politicians and get into the 'friends' circles.

Essential Business Vocabulary

TPE = Très Petite Entreprise = very small business
PME = Petites et Moyennes Entreprises = small and medium-size businesses

The English term self-employed would be auto-employé in French if translated literally. It isn't translated like that, perhaps to underscore the different legal status of a self-employed and the different system for social security charges, as compared with an employee.

If we refer to individuals earning money from activities where they are not employees and where there is no limited company, various terms are used to refer to the same thing:

  • entrepreneur individuel
  • entreprise individuelle
  • travailleur non salarié (worker who is not an employee)
  • travailleur indépendant (independent worker)
  • free-lance

A particular type of entrepreneur is the

  • auto-entrepreneur

who is an entrepreneur individuel who has opted for a super-simplified scheme for income tax and social security charges. In all these cases, there is no separate legal entity for the business. The individual and the business is one and the same natural person.

Another term you will often see is the

  • micro-entreprise

which refers to a somewhat simplified scheme for calculating social security charges but which can refer to an entreprise individuelle as well as a limited company.

As for the legal form of the business, the basic choice is between: 

  • entrepreneur individuel (individual entrepreneur) where the business activity is exercised by a personne physique (natural person), and where the income can only be subject to income tax, not corporation tax,
  • various types of société (limited company), such as SA, SAS, SARL, where the business activity is exercised by a personne morale (legal entity), and where the income can only be subject to company tax,
  • and a couple of hybrid forms for a single entrepreneur, such as EURL and the new EIRL, where either type of tax can be chosen.

A new choice in the hybrid group has just been added, the EIRL - Entrepreneur Individuel à Responsabilité Limitée (Individual entrepreneur with limited liability) - to address the problem of a self-employed person being liable with his or her entire personal property. There is no separate legal entity but a separation of personal property and business assets. Click below for more information (in French):
- - public site.
- - online book from the accountants.
- - online book from the lawyers.

Business income is either industrial and commercial (BIC) or non-commercial (BNC). Any sort of sale of goods is commercial, while more abstract professions are non-commercial (advice, counselling, lawyer, doctor...). The definition of commerce appears in the beginning of the Code de Commerce.

There are special schemes and treatment for many specific groups, for example artisans, agriculture, journalists, authors, and personal services in the home of the client. It is very important to determine if special provisions apply to the activity you intend to do. That is not always an easy task.

Things are notably complicated for authors and a few related activities. They are by definition self-employed, but special provisions in the Social Security Code stipulate that they have to pay social security charges as if they were employees. Hence, authors cannot be auto-entrepreneurs or any other type of entrepreneur. An author paid by a French publisher would notice only about 23% employee's social charges having been withheld, the publisher having already paid the employer's charges, while an author paid by a non-French publisher would have to pay both the employer's and the employee's social charges. In the latter case, the total of these charges amount to about 45% of the gross royalties. That remaining amount is subject to income tax as if it were a salary, meaning the author can choose between the 10% expenses allowance or the actual expenses. This is a very condensed version of very complicated rules, meant to illustrate the pitfalls for the unwary.

Back to standard entrepreneurs: you will also need to choose a tax scheme.

For the individual types of business, the simplest form is auto-entrepreneur.

Please note that the auto-entrepreneur scheme is presently under review by the new socialist government. While they have made it known that they will not scrap the scheme, it is uncertain how the system will evolve.

Annual turnover must not exceed 81,500 euros if you sell tangible items, or 32,600 euros for other activities, notably services (2011 and 2012 figures). In case of a new business created during the year, these amount are reduced on a pro-rata basis. Instead of paying 10 different social security contributions, you pay a flat rate each quarter or month based on your actual turnover that period. The amount paid is final. This is close to the British self-employment model with the notable exception that no expenses can be deducted so you are taxed on your gross turnover. Income tax may be either an additional flat rate or taxation as salary on the tax return. The flat rate option, known as versement libératoire de l'impôt sur le revenu, is only available if your revenu fiscal de référence, fiscal reference revenue, a figure that appears on your tax return, two years earlier did not exceed €26,420 (for the 2010 income) per part (see "French income tax explained" for an explanation of the parts). You are automatically VAT exempt and cannot opt in to VAT, something that is a disadvantage in certain situations, for example mainly business clients that recover the VAT, or an activity where only 5.5% VAT applies so you would have received VAT refunds in the normal system. No minimum turnover is required (except that if you declare no income at all during 24 successive months, you will lose your entitlement to the scheme) and there are no minimum contributions (with one exception, see below).

All the business schemes without exception entitle you to public healthcare and retirement.

WARNING: Annual Company Car Tax.

One of the criteria to take into account when choosing a legal company type is the annual Company Car Tax that can be a very significant annual expense for cars used by a legal entity, whether owned, leased, registered in France or abroad and even if you refund mileage to your employees for using their own cars (although an annual allowance of €15,000 is applied in the latter case). The effect of the tax is made worse by the fact that it is not a deductible expense for the calculation of corporation tax. A self-employed person running a business as a natural person (entreprise individuelle) is not concerned by this tax.


Businesses and self-employed persons pay the contribution économique territoriale (CET), which is in fact a common name for two different taxes: Cotisation foncière des entreprises (CFE) and Cotisation sur la valeur ajoutée des entreprises (CVAE) (links to Wikipedia). These taxes replace the taxe professionnelle which has been scrapped from the 1st January 2010.

Auto-entrepreneurs are automatically exonerated from the CFE in the calendar year they start and the three following calendar years if their closest family have not exercised a similar activity during the last three years.

There are a number of exonerations from CFE, so it is worth finding out if you can benefit from one of them.

The CFE is based on the value of real estate used by the business (whether rented or owned, and even if you work at home and already pay taxe d'habitation and/or taxe foncière). The CFE tax base must be between €200 and €2,000, as defined locally. The local authorities also set their own tax rate. The minimum tax is due even if you earn less.

In 2012, a large number of towns raided an even larger number of small businesses by raising the CFE tax so much that many businesses found their CFE tax doubled, tripled, or increased as much as 700%.

Legal base for the CFE: code général des impôts articles 1447-1478, 1647 bis, 1647 D.

The CVAE concerns businesses with a turnover exceeding €152,500 and is based on the valeur ajoutée, a not straightforward concept. The total amount of CET due cannot exceed 3% of the valeur ajoutée.

Legal base for the CVAE: code général des impôts articles 1586 ter-1586 nonies.

Legal base for the CET (CFE and CVAE): code général des impôts articles 1647 B sexies-1647 C quinquies C.

Simulator for estimating the CET.

WARNING: Business garbage tax.

Most businesses produce more or less garbage, so they get annual garbage bills. Nothing surprising here. What is more surprising is that even if you're an auto-entrepreneur working at home, doing nothing else than sitting in front of a computer, you may be required to pay a business garbage tax in addition to your household garbage tax. It is a tax the government has 'forgotten' to warn auto-entrepreneurs about on their official auto-entrepreneur information site The amount can vary between less than €100 and thousands of euros.

WARNING: Business sign tax.

Each commune has the option of taxing external signs and commercials, the definition of which is to be found in articles L581-2 and L581-3 of the Code de l'environnement. This tax is called taxe locale sur les enseignes et publicités extérieures (TLPE) (tax on external commercials and signs). The interpretation of what is considered a taxable sign varies from one commune to another. Some communes have demanded tax of the text showing opening hours and the mandatory fuel price displays at filling stations. Interior signs are not taxed even if visible through shop windows. It is impossible to provide global guidance for the tax rates, as they are fixed locally. Just expect to keep paying taxes as soon as you do anything else than sleeping.

WARNING: Business TV licence tax.

If your business has one or more TV sets in premises separate from your home, you may have to pay the TV licence tax (redevance audiovisuelle) for each TV set.

These two articles give you a good idea about what not to do as auto-entrepreneur: non compatible auto-entrepreneur interdit les professions et professionnels exclus du regime d'auto-entrepreneur

The next simplest option is micro-entreprise in various forms and denominations if the revenue is below a the thresholds mentioned for auto-entrepreneurs. In a micro-entreprise, the fiscal deduction of business expenses is replaced by a fixed allowance as a percentage of turnover. The fixed deduction varies between 34% for non-commercial activities such as the liberal professions to 50% for commercial services and 71% for sale of tangible goods. If you are a micro-entreprise, then you are automatically VAT exempt. It makes life simpler, but the 34% for non-commercial activities often doesn't cover the actual expenses, and in the beginning of the activity, before the business is developed to become profitable, you lose a large part of your fiscal deductions. Becoming VAT exempt is not automatically beneficial.

Below a certain threshold, with or without micro-entreprise, you have the option of becoming VAT exempt. Consider whether your clients are mostly VAT registered or mostly individuals.

If you have the choice, consider that under current law and practice, women who create or take over businesses may obtain credits guaranteed by the State and women with small children get priority if their business is in difficulty and they apply for help paying social security contributions. Men in the same circumstances are excluded or do not have priority. This is clearly illegal discrimination but for so long as the discrimination continues, a couple starting a business may be better off having the woman as owner than the man.

Many expats moving to France keep their foreign-registered companies in place abroad, keep them taxed abroad and don't register them in France. The most common reasons are to avoid the complexities of French administration and the high taxes and social charges in France. Many refer to the right of any EU national to run companies in other member states. They make the assumption that a company is necessarily taxed in the country where it is registered. They overlook the fact that the double taxation agreements between France and other countries contain very complex rules for determining the country where a company is taxed. The basic rule is that if you keep running and managing a foreign company from France, then the company is taxable in France, regardless of the country where it is registered. If it were really that simple to avoid French charges, then there wouldn't be many companies left in France. But it is not that simple. It is in fact extremely complex to set up a legal arrangement to manage a foreign company and have it taxed abroad. In reality, many expats are committing tax evasion and exposing themselves to heavy penalties if the taxman finds out. The French tax authorities may be messy, but they are not stupid, and they are aware of this sort of tax evasion, whether it is committed in good or bad faith. If they suspect that major fraud is taking place, then they can and will raid your home and business premises and turn everything upside down. There is a further complication in French tax law called abus de droit (law abuse). It is a measure that says that if you make a legal fiscal arrangement with the sole purpose of paying less tax, then the taxman can legally disregard your arrangement and tax you according to the reality of the situation. Morale: Don't play amateur with your business arrangements but get professional advice to assure that you can sleep at night. You may end up with the conclusion that many others have arrived at: That France is not a business-friendly country and that it would be more profitable to run your business elsewhere. It may mean that you cannot live in France but only visit the country without becoming resident. You can't have your cake and eat it. If you want to live in France, then you must accept it with all its quirks - or run the risk of being ruined the day you're found out.

A foreign business that has a subsidiary in France with a business establishment and employees in France must register with the local Centre de Formalités des Entreprises (CFE) according to the type of activity taking place. See the Directory of CFEs.

A foreign business that has no business establishment in France but employees in France who are subject to French social security must register with the Centre national des firmes étrangères (CNFE) at the Urssaf du Bas-Rhin which is responsible for this specific situation.

A foreign business that has neither business establishment nor employees in France but activities subject to French tax, such as for example VAT or corporate tax (impôt sur les sociétés) must register with Service des impôts des entreprises étrangères (SIE).

And now that we're at it, let's quash another myth: That it is only a matter of counting days to determine where you are resident for tax purposes. The days criteria appears in list of criteria to determine tax residence in the double taxation agreements after the following criteria: Where you have a permanent home and where your personal and financial ties (centre of vital interests) are. For example, if you've installed your family in a home in France and you travel outside France more than half the year, then you are still liable for tax in France, unless you can show that your financial interests outside France are so strong that they outweigh the interest of your family in France.

Start Business in France Get expert answers on starting and running your small business in France (in English).

Simulator to compare different tax schemes. The French association of accountants have produced a downloadable simulator in an Excel file to guide the entrepreneur about which tax scheme is most profitable, based on simple criteria.

Employing Staff in France

Before hiring staff in France, be sure to fully understand what you are doing. French employment regulations are among the most restrictive in the world, making it difficult or impossible to lay off employees. Taxes and social security contributions nearly double the cost to the employer compared with the employee's take-home salary. Getting it wrong could be very expensive if a disgruntled employee takes you to the employment court conseil des prud'hommes.

The main employment law is the Code du Travail.

The Code du Travail is supplemented with a long list of conventions collectives that provide additional provisions, sometimes overruling or interpreting the provisions of the Code du Travail, for specific sectors. This includes minimum salaries that may be higher for certains than the SMIC.

The weekly working hours are 35 hours unless otherwise agreed. 
A working year is, for practical reasons, considered 52 weeks. 
One month is thus considered to have 52 weeks/12 months = 4 1/3 weeks/month.
One month is thus considered to have 35 hours/week x 4 1/3 weeks/month = 151.67 hours/month.

France has a minimum salary called the SMIC (Salaire Minimum Interprofessionnel de Croissance). The present and past SMIC rates can be looked up on the INSEE's site (Institut National de la Statistique et des Études Économiques). The rates are gross, meaning they indicate the salary before employee's social security contributions or tax are deducted. It is a criminal offence to pay an employee at a rate below the SMIC.

The main types of employment contracts are:

  • CDI (Contrat à durée indéterminée). That is a permanent contract. The essential restrictions are that such an employee can only be laid off if he or she has severely misbehaved (licenciement pour faute grave) or if the employer's financial future is threatened (licenciement économique).
  • CDD (Contrat à durée déterminée). That is a temporary contract. A CDD can only be used in specific cases and under specific provisions. If any of these provisions are broken, the employment court may transform the contract into a CDI. A CDD can only be renewed once, although there is an exception if the purpose is to replace temporarily absent staff. The total duration of the CDD and its extensions cannot exceed 18 months. If the employer wants to hire the same employee again on a new CDD, there is a waiting period that depends on the duration of the previous CDD, during which it is illegal to hire the same person on a new CDD (except for replacement of temporarily absent staff). The reason for using a CDD must be detailed in the contract. It can notably be used for temporary replacement of absent staff or a temporary increase of the employer's activity. The employer who uses a CDD must pay 10% of the total salary paid including overtime, paid vacation and all other supplements at the end of the contract to compensate for the contract ending, unless the CDD is transformed into a CDI by the same employer and without any gap. Historically, the duration of the CDD had to be defined as a period. Today, it is allowed to define the duration of a CDD as depending on a specific event to happen, such as for example the return of a temporarily absent employee. It is illegal for the employee to quit his or her job in the middle of a CDD, except for very specific reasons detailed on the Code du travail. If he does, the employer may be entitled to compensation from the employee. If, however, the employee can document that another employer has given him a CDI, then he is entitled to quit his CDD with short notice. In that case, the employer having issued the CDD must pay the 10% due as if the CDD had run out until the end date defined by the contract.
  • Seasonal contracts. These can only be used in specific sectors with natural seasonal variations.

In all cases, the employee is entitled to five weeks' paid vacation per year. If the employee does not use these days, a supplement of 10% of the salary must be paid instead. It is customary in France for the employee to take all his or hers vacation entitlement or be paid for it.

There are endless complications, exceptions and exonerations for employing staff, and they regularly change. UCANSS wrote a 174-page quick reference guide in 2006 to outline the essential provisions for employers, but it would be out of date by now.

Business & Product Categories

If you start a business in France, you need to find out which category - or categories, if you have more than one activity or product - best describe your activities and products.

NAF codes describe the activities. The same business can have several different activities, unless specific regulations rule it out. The NAF codes have statistical purposes and do not mean that a business is limited to the NAF code chosen. The APE (Activité Principale Exercée) code for a business is the NAF code that describes the business' main activity, mostly measured by turnover. If a same business has more than one establishment, one distinguishes the APEN code for the business as a whole and the APET codes for each establishment.

Product categories are described by the CPF codes.

NAF codes (Nomenclature d'Activités Française). Business categories.

CPF codes (Classification des Produits Française). Product categories.

Business Links


How long to keep business documents. A business or self-employed person is obliged to keep different types of documents for various lengths of time as a minimum. The government site tells you how long. Click here for the rules for private documents.

Business & Association information sites

Infogreffe. The official French business database.
Verif. Legal and financial information about businesses in France and worldwide. Contrary to many other business information sites, tells you if a company is in liquidation or receivership without asking you to pay ("Documents Légaux" tab). Registration is free.
Manageo. Get information about any French business. More free details than on most similar sites.
Corporama. Also displays information obtained from unofficial sources (websites, LinkedIn ...).
Cofacerating. Get information about any French business.
Societe. Get information about any French business.

Net1901. Directory of associations declared under the 1901 law.

Auto-Entrepreneur sites

Warning: some companies have set up web sites to trick entrepreneurs into paying them for setting up as auto-entrepreneur. There is no fee for doing this on the official site That site should be the only one used for setting up your business. If you want to pay for assistance, be sure the services offered have real value.

Lautoentrepreneur. Government site for declaring yourself auto-entrepreneur. Don't set up your auto-entrepreneur business anywhere else.
Auto-entrepreneur official guide. Download the government's official guide to the auto-entrepreneur scheme.
Chamber of commerce: Information about auto-entrepreneur.
Auto-entrepreneur. Private site with advice for auto-entrepreneurs.
Auto-entreprenons. Private site with advice for auto-entrepreneurs.
Planète auto-entrepreneur. Private site for auto-entrepreneurs.
Planète auto-entrepreneur: How to declare your activity. Guide.
Planète auto-entrepreneur: Add yourself to a free directory of auto-entrepreneurs.
Autoentrepreneurs. Magazine for auto-entrepreneurs.
autoentrepreneurinfo. Auto-entrepreneur forum.

Protecting your trademark

INPI. Institut National de la Propriété Industrielle. Protection and registration of French trademarks.
OAMI. Protection and registration of EU trademarks.

Accounting, financial and fiscal matters

APCE: Explanation of regulations for issuing invoices. French association of accountants.
FCGA. Fédération des Centres de Gestion Agréés.
UNASA. Union Nationale des Associations Agréées.
Macompta. Cheap online accounting service.

Financing your business

OSEO. Government scheme to help financing businesses.
ADIE. Association helping people create small businesses by providing micro-credits if other credit methods cannot be obtained.
Portail PME. Index of aid available for businesses.
Objektiva. Purchase of credit and restructuring of debt for liberal professions and medical professionals.
Médiateur du Crédit. Ombudsman service dedicated to businesses being refused credit.

Merchant accounts, payment solutions

Seasoned entrepreneurs are aware of the chargeback risk, but it is not obvious for a beginner. In the EU, any payment provider client (including bank clients) can contest unauthorised payments up to 13 months after they were debited, except for cheques. When that happens, the payment provider may well pass the bill for fraud onto the merchant by debiting the amount refunded to the client. That is known as a chargeback. The danger is that payment solution providers aimed at small businesses often fail to warn less experienced merchants about this risk. The risk description is there if you look for it, but nobody tells you to look for it.

Although mainly disgruntled Paypal clients have contributed with accounts of a vast number of fraud cases and other problems, this does not mean that such problems are limited to Paypal. The chargeback risk applies for all payment solutions, unless the payment solution provider specifically agrees to cover the chargeback risk against a more or less modest fee.

W-ha. - Foreign Currency Direct - Irrevocable Payment Document

Paypalwarning. Paypal clients tell about their bad experiences.

Google Checkout and Amazon Payments are not presently (August 2011) available to businesses in France.

VAT reclaim agencies

Recovering VAT paid in another Member State can be a bureaucratic nightmare. An agency can help avoiding mistakes and avoid days of legal research and translation.


Debt recovery agencies, Credit risk management

Fichier National des Incidents de Paiement

Business creation procedures and information

Informational sites

APCE (Agence Pour la Création d'Entreprises). Help and info for starting a business. Official site.
Création Entreprise. Help and information for starting a business.
Creer-une-entreprise. Practical information about starting a business.
Défi Création. Informational site.
Entreprendre en France. Association created by the Chambers of Commerce and Industry to accompany business creators.
Legal information from the Chamber of Commerce of Paris

Official sites for actually creating a business

Guichet-Entreprises. Official site: one-stop-shop for creating a business. Business creation online for liberal professions.
CFE-metiers. Business creation online for artisans/craftsmen or other activity classified as artisan. List of all the chambres de métiers.
CFENET by the Chambers of Commerce: Business creation online as shopkeeper or other trade belonging to industry or commerce.
Lautoentrepreneur. Government site for declaring yourself auto-entrepreneur. Don't set up your auto-entrepreneur business anywhere else.

Warning: some companies have set up web sites to trick entrepreneurs into paying them for setting up as auto-entrepreneur. There is no fee for doing this on the official site That site should be the only one used for setting up your business. If you want to pay for assistance, be sure the services offered have real value.

About social security contributions

WARNING: Starting a business in France can be bad for your health. It's not a joke.

If you start a business in France, be prepared for the shock of having to pay around 45% of your profit in social charges (for auto-entrepreneurs, it is a percentage of turnover). Unless you have chosen the auto-entrepreneur scheme, you will have to manage nearly ten different charges, such as family allowances, health and maternity care, deductible general social contributions, non-deductible general social contributions, refund of the national debt, basic pension, complementary pension, professional education, each calculated in its own way.

Except for the first two years, these charges are based on your result two years ago. If your result changes a lot from one year to another, the social charges can fluctuate dangerously.

If your profits increase quickly, you underpay during two years until they catch up with your increased revenue, and they will then claim, during the same year, increased charges for the current year and additional payments to adjust for the previous two years. The result is that you may end up having to pay nearly three years' charges during one year. If you are not managing these charges carefully and putting money aside for future payments, they may end up making your business go bankrupt. This is the most common cause of business failures in France.

If your profits decrease drastically, they will continue to claim social charges based on your good period two years ago. This means that the social charges due for the current year may exceed your revenue. The surplus will be refunded two years later, but that doesn't help if there is a liquidity problem. This is another cause of bankruptcy. A law change from 2005 addressed this problem and made it possible to ask for the provisional charges to be reduced and based on the business's own predictions. However, it is not a right to have it recalculated, so in theory the request can be refused. Also, the authorities are very slow when it comes to replying to and enacting such requests. The law change doesn't apply for liberal professions' pension contributions, and they alone have the potential to exceed the entire revenue.

During the first two years, you are supposed to provide advance payments that presume a certain profit. Even if you earn much less, you still have to pay.

Not only is the system for social charges inhumanly complex, it is regularly adjusted, and the public services appointed for administering them and collecting money, the RSI and the URSSAF, are a pathetic shambles. They often send out wildly exaggerated bills for social charges. They lose mail sent to them. They forget to apply reductions one may qualify for. They commonly lose payments made to them, or they forget to register them, so they keep sending out reminders for social charges already paid or not due, and after a few weeks they send out bailiffs to collect payments already made but not registered, or payments not due. I have been told by a person who actually visited an URSSAF office that they had an office full of unopened mail.

People who have been fighting with unfair treatment by the URSSAF or the RSI for many years often complain of resulting health and stress problems. Think twice before starting a business in France.

Americans should note that "social security" in Europe refers to a wide range of services including healthcare, old-age pension, family allowances and more.

Net-entreprises. Declare revenue online for calculation of social security contributions.
UCANSS. (Union des CAisses Nationales de Sécurité Sociale). Official site.
UCANSS. Employer's social security guide.
URSSAF. URSSAF collects social security contributions from employers, be it individuals, self-employed or companies. Official site.
CANCAVA. Pension fund for artisans and craftsmen registered in the chambre de métiers.
CNAVPL. Pension fund for liberal professions and freelancers.
CIPAV. Pension fund for liberal professions and freelancers.
CANAM. Health cover for liberal professions and freelancers.
Libre Assurance Maladie. Independent site informing how to legally opt out of the public French healthcare system.

Other Official Business Sites French government portal for businesses. French government portal for small businesses, shopkeepers, craftsmen/artisans. French government portal for industry.
CCI. French Chambers of Commerce and Industry portal.
European American Chamber of Commerce (France).
European Commission: European portal for small businesses.
Greffes formalités
Greffe du Tribunal de Commerce de Paris. Official site.
INSEE. French National Institute for Statistics and Economic Studies. Business Portal.
Marketing Pour PME. Official site assisting you in your marketing.
APCM. Assemblée Permanente des Chambres de Métiers.
Service-Public. Business information portal. Official site.
Sirene. The Sirene system attributes unique business identification numbers.


Investinprovence. Marseille-Provence Chamber of Commerce and Industry and the Bouches du Rhône conseil général's (~county council) English-language portal for partnership with foreign businesses investing in Provence.

B2B Business Directories, Providers

See also Office Equipment & Stationery.

Pagesjaunes. Yellow pages. When you sign up for a business phone or Internet subscription, it usually includes the right to one free business listing in the Yellow Pages, including a web site and e-mail address. If you don't want you fax spammed, don't list it. Technically, your phone company or ISP will add your business to the annuaire universelle. The Yellow Pages and other directories should then pick it up automatically. If they don't, you may need to call the Yellow Pages on 0810 810 767 ('local rate' number). B2B yellow pages. Paid inclusion only.
Annuaire Entreprises. Free business directory.
Companeo. Catalog of products and services by selected providers for businesses.
Decideur - Business directory. Browse & list your own business free of charge.
Espacedevispro. Get quotes and find providers.
Gautier-Girard. Entrepreneur network site with business directory. List your own business free.
Professionnel. Find providers and compare quotes.
Metro. Cash and Carry France. Large stores.

Trade Specific Sites

ARAPL. Associations Régionales Agréées de l’Union des Professions Libérales.

Business Press, News

01net. IT magazine.
Decideur. Business news, newsletter.
Journal du Net. Focus on the Internet but not targeted exclusively at businesses.
Rebondir Magazine. Job and Business creation.
Village Magazine. Create your life in the countryside.

Press release sites


Business Community & Network Sites

Decideur. Business network site.
Gautier-Girard. Entrepreneur network site. Entrepreneur network site.

Professional Education

FIFPL. Fonds Interprofessionnelle de Formation des Professionnels Libéraux.
FormaPL. Education of liberal professions.

Other Business Sites

Self-employed, freelancers or other contractors looking for work: please refer to the listings of job and contract sites to look for contracts.

Ask legal business questions online. A service from Telexper.

Investinfrance. Information for foreign businesses wanting to create businesses or invest in France.
Investinprovence. Information for foreign businesses wanting to create businesses or invest in Provence. Calls for tender.
Business in Europe. Expanding your European business from France.
CIGREF. Club Informatique des GRandes Entreprises Françaises.
Decideur - Advertisements.
Decideur - Club. Site for the business community.
Decideur - Info. Business news, newsletter, directory and much more. For business creators.
Entreprise & Droit. Legal business information.
l'Entreprise. Business magazine.
FedEE. Federation of European Employers. Organisation for international employers operating across Europe. Founded 1989 with funding from the European Commission.
Freelances en Europe association. General site for freelancers.
GroupeRF. Legal portal for business.
Import - Export. Assistance from Teknea.
Libérez votre esprit d'entreprise. Government site to help business creation.
Microsoft - Business France.
NetPME. Business portal.
Paris-Entreprises. For businesses in Paris.
Portail PME (Petites & Moyennes Entreprises). Business portal.
Union Nationale des Professions Libérales.
Wiktik. Free business ads.

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