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Moving to France: do I need to set up company? In France or UK?
Thread poster: B D Finch

B D Finch  Identity Verified
France
Local time: 19:14
Member (2006)
French to English
+ ...
Jul 31, 2006

I hpe to be moving to France in September or October. I understand that freelance translators in France are much more vulnerable to claims than in England and also that one cannot simply take on work without having formally registered as a company.

Because of the complexity and costs of the French system, I was thinking that it might be better to set up a company in the UK before leaving.

I'd appreciate any advice on this issue.


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Ford Prefect  Identity Verified
Burkina Faso
Local time: 17:14
German to English
+ ...
... Jul 31, 2006

If you live in France and work as sole employee for a UK-based company, the French authorities might well decide that the UK company has a presence in France and make your company register in France anyway. So you will then be made to go through four sets of tax returns (personal and business, two countries), two sets of audited accounts, two VAT registrations and who knows what else, and for all I know get fined by the tax office and extra special attention for years to come for not registering in France in a timely fashion. It doesn't sound easier than dealing just with the French authorities, and if you spend any length of time in France, you will have to deal with the authorities eventually because if you don't go and find them, they will come and find you. The longer you leave it before you start, the worse position you will find yourself in.

I don't know anything specifically about France, but I would say it is unlikely that you aren't allowed to work for yourself at all without having a registered company. [cynical]I mean why would the French government want to put bureaucratic hurdles in the way of economic productivity?[/cynical]

It might be an option to do the work for the company and leave the money in the company, not pay yourself anything, but aside from the fact you need to eat, this is unlikely to be tax efficient, and you might still fall foul of the French authorities re: company registration and taxation.

Disclaimer: consult an accountant or tax expert who can advise on your individual situation. In fact, consult two, one in each country.


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Mary Lalevee  Identity Verified
United Kingdom
Local time: 18:14
French to English
Tax and social security in country of residence Jul 31, 2006

The fact is you have to pay tax and social security contributions in your country of residence. Maybe if you have a good tax lawyer there are ways of avoiding this, but it seems a bit iffy to me.

If you're planning on settling in France I think it would be advisable to register there, but as the previous poster said, you should seek professional advice.

Good luck!

Mary


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Courtney McConnel  Identity Verified
France
Local time: 19:14
French to English
+ ...
You can keep your current set-up if you want Jul 31, 2006

Many Americans here in France stick to their U.S. system all-around. It depends on whether you want the French social advantages.

If you go the French route, I hear AGESSA is taxed less than URSSAF.

And yes, the French DO hinder economic productivity! : ) URSSAF is a special govt body for self-employeds that charges self-employed taxes.

Other than garage sales, people have to have a route for declaring their earnings, income tax alone is not enough (unless you're staying on your country's system).

There is a great deal of debate about this subject, but I have asked the French Fisc twice, and I have met many Americans who also confirm that there is a place for financially independent foreigners in France.

: )

Good luck with your move!


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B D Finch  Identity Verified
France
Local time: 19:14
Member (2006)
French to English
+ ...
TOPIC STARTER
Clarifying the issue? Jul 31, 2006

Mary Lalevée wrote:

The fact is you have to pay tax and social security contributions in your country of residence.


Thanks Mary. I do intend being registered in France for income tax. Indeed, though there is no option about this, I would choose to do so anyway. I would, therefore expect to pay French income tax and social security contributions on worldwide earnngs. The question is whether setting up a company (to, among other things, protect me against unlimited personal liability in the event of a work related claim) should be done in France or England.




James Visanji wrote:

I don't know anything specifically about France, but I would say it is unlikely that you aren't allowed to work for yourself at all without having a registered company. [cynical]I mean why would the French government want to put bureaucratic hurdles in the way of economic productivity?[/cynical]

[centre]-------------------------------[\centre]
Thanks James,

I believe that it is actually very difficult being self-employed in France. One does need to have some sort of a company as protection and in order to file accounts. As for your "cynical" question - well, I have heard from a number of French people that, pointless though it may seem, the bureaucratic hurdles put there by the French government are actually quite daunting.

[Edited at 2006-07-31 22:10]


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xxxdf49f
France
Local time: 19:14
URSSAF registration or travail au noir Jul 31, 2006

Courtney McConnel wrote:
...There is a great deal of debate about this subject, ...


There is no debate whatsoever about the fact that it is illegal in France for any person or company to outsource/contract work to anyone residing in France but not registered in France as a professional (freelance or corporate). The alternative is called "travail au noir" and it's an absolute legal no-no (even carries a possible jail sentence for employers caught doing it... ).
Aside from the fact that moonlighting is unfair competition against those of us who dutifully pay our French taxes and social security contributions: easy to charge lower rates if you pay no taxes/contributions on your fees... (ref. the EU debate about the "Polish plumber" and the Service Directive).

Courtney McConnel wrote:
Many Americans here in France stick to their U.S. system all-around. It depends on whether you want the French social advantages.

...could be... but then it's illicit undeclared work if they are physically residing in France (same as the US, no green card, not allowed to work...).
Our clients, direct, freelance colleagues and more particularly agencies are regularly audited by tax authorities who require them to produce proof that their subcontractors are properly registered as independent professionals in France or else prove that they do NOT reside in France (i.e. are physically present less than I forget how many days, around 175 days). All outsourcers (including self-employed freelancers) have to file a special form each year with our tax return listing out the names, URSSAF nbr and addresses of all persons (including non-French residents) whom we paid for services during the year. Clients and agencies in particular are therefore very reluctant to work with anyone not fulfilling these requirements.
As an occasional outsourcer (freelancer, not an agency), I would NEVER give out work to a foreigner (particularly non-EU) residing in France and not properly registered with URSSAF, SIRET and other authorities. I know many colleagues (translators and interpreters) who feel the same way.
Foreign translators and interpreters, just like any other professionals (whether EU or non-EU nationals) wishing to reside and work in a country must abide by the laws of that country. If someone wants to enjoy our roads and TGV and beaches and ski resorts and hospitals and écoles maternelles and cafés on sidewalks with dog-poop, all of which are paid for with my taxes, then why shouldn't they also contribute to society with taxes and ss contributions?? In addition, you can try to slip through the net for a while, but when the "fisc" tax men hit your clients, they'll unravel the thread and also end up finding you.

df


[Edited at 2006-07-31 22:42]

[Edited at 2006-08-01 10:00]


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xxxdf49f
France
Local time: 19:14
self-employed in France Jul 31, 2006

I believe that it is actually very difficult being self-employed in France. One does need to have some sort of a company as protection and in order to file accounts.

It is not difficult at all and much simpler than setting up a company: you go to the URSSAF office, you fill out a long form with basic information on you and your type of self-employment business, then they transfer that information to all other authorities who will then contact you to let you know what you need to pay as social security contributions (% of income). Registration doesn't cost anything.
As for professional liability, if you really want coverage, you can buy liability insurance from any insurance company (relatively inexpensive).
df


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Charlie Bavington  Identity Verified
Local time: 18:14
French to English
More claims? Aug 1, 2006

Barbara Finch wrote:

I hpe to be moving to France in September or October. I understand that freelance translators in France are much more vulnerable to claims than in England and also that one cannot simply take on work without having formally registered as a company.

Because of the complexity and costs of the French system, I was thinking that it might be better to set up a company in the UK before leaving.

I'd appreciate any advice on this issue.


I'm not sure what your source is for this "more claims" stuff, but anyway.
It's fairly straightforward to register as self-emp'd with URSSAF, and once that's done, you'll be prompted for all the other stuff you need to deal with (health insurance, pension, etc.) as mail will flood thru your letter box
You've got 3 months from starting to "operate" to register with URSSAF, and while that is happening, you can put "registration in progress" on your invoices. So no need to register until you do your first job.
I didn't actually bother, but once you're registered, I would see no reason for civil liability insurance being a problem.
If you're full time, you'll probably earn enough to reach the VAT threshold too.
Bureaucracy is not a French word for nothing, so be prepared for it to take time, but it's not insurmountable.
I recommend "S'installer a son compte" by Cesbron and Sterin, pub'd by Delmas - it's a mine of useful info, I followed it to the letter and never had any trouble.

The UK company, of which you would be a employee resident in France, sounds like an unnecessary administrative nightmare. True, setting up a UK company takes only half an hour, but after that... all earnings would be under UK corporation taxes, whereas your remuneration would be under Fr income tax... I can see a large chunk of your income going in accountants' fees on both sides of the channel. (Whereas if you keep your wits about you, you can do without an accountant in France, if you keep things simple.)


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Elisabetta M.  Identity Verified
Local time: 19:14
Member
English to French
+ ...
a tip to calculate french social charges Aug 1, 2006

There is a web site where you can calculate social charges in Franc and have some infos on the kind of company which is best for your activity it's http://www.canam.fr/aide_a_la_creation_d_entreprise/index.php
Good luck
Elisabetta


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nordiste  Identity Verified
France
Local time: 19:14
Member (2005)
English to French
+ ...
EURL or Entreprise Individuelle Aug 1, 2006

To work as a freelance in France you can be self-employed as an "Entreprise Individuelle" and just register with your local URSSAF , or go for EURL (Entreprise Unipersonnelle à Responsabilité Limitée) which is the French equivalent of a Limited Company with one unique associate.

Some websites can help you : www.apce.com (gouvernement site, very good and updated) gives you lot of information, and www.urssaf.fr / rubrique "CFE" (centre de formalité des entreprises) about registering.

Bienvenue et bonne chance !


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Williamson  Identity Verified
United Kingdom
Local time: 18:14
Flemish to English
+ ...
A comparison by the BBC Aug 1, 2006

http://news.bbc.co.uk/2/hi/business/5048428.stm

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Courtney McConnel  Identity Verified
France
Local time: 19:14
French to English
+ ...
legal foreigners Aug 1, 2006

I would just like to clarify, in light of Dominque's response to my post, that I was referring to a perfectly legal, not 'under the table' scenario. If your clients are non-French or you are financially independent of France, you are allowed to remain under your country's taxes, retirement funds, etc., as there is reciprocity. In this scenario, you do not have to live here less than 175 days a year (or thereabouts), but you do have to have an international clientele as opposed to French, as Dominique says. But I think it is a nice option to know for expats who have a lot tied up in their country's system.

Thanks for bringing up this interesting topic.

Speaking of international, I'm off to India!


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Sara Freitas
France
Local time: 19:14
French to English
Shopping around for your tax home? Aug 2, 2006

Courtney McConnel wrote:

I would just like to clarify, in light of Dominque's response to my post, that I was referring to a perfectly legal, not 'under the table' scenario. If your clients are non-French or you are financially independent of France, you are allowed to remain under your country's taxes, retirement funds, etc., as there is reciprocity. In this scenario, you do not have to live here less than 175 days a year (or thereabouts), but you do have to have an international clientele as opposed to French, as Dominique says. But I think it is a nice option to know for expats who have a lot tied up in their country's system.

Thanks for bringing up this interesting topic.

Speaking of international, I'm off to India!


As far as I know, your tax home is determined by physical presence. The US-France tax treaty simply allows foreign nationals to avoid double taxation and double SS Self Employment tax payments. As far as I know, you don't get to shop around for your tax home to find the best deal, but if you earn under the annual threshold, you do get to use the treaty to avoid double taxation.

I would be really surprised if the fact that I work with clients in the US and Ireland, for instance, would somehow legally allow me not to pay into the system in France, my tax home. If this were legal, heck, we'd all be doing it.

I have to say I agree wholeheartedly with Dominique's post. It really is annoying for those of us who pay tens of thousands of euros into the system each year to hear of people who are working illegally.

I would advise the poster moving to France to get professional advice on both ends (from an accountant, for instance) in order to find the best (and hopefully legal) way to set up her business in France.

Best of luck and welcome to France!

Sara


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Williamson  Identity Verified
United Kingdom
Local time: 18:14
Flemish to English
+ ...
Consult an accountant and stay under British legislation Aug 2, 2006

Unless you want to lose 50% of your income to "La douce France", you'd better see to it that if you have family, you work from your families' home in Britain and stay only 174 days in France. Perfectly legal and feasible if you have a laptop.

There are 220 working days in a year. It will make a lot of difference in taxes and social security if you could navigate between the two countries. Beside the state is not going to put somebody beside you all the time to check if you are physically present in France. Have a British accountant write invoices. If you create a company the company becomes a legal entity different from a natural person (you).
This company can always pay you minimum wages...

Unite, unite Europe, only taxes is the one thing that remains national...
So, do feel free to shop around and set up a company in the cheaptest country.

Another way to get around is a Luxembourg fidiciare: these are companies specialised in legal matters, accounting and taxes who will rent you an address, take care of your
administration, tax-matters and if need be debt collection.

On this site a translator mentioned that the first thing a translator should be able to do is to calculate. She is right. With the money you save, you can pay ten times the Eurostar to England or the ferry to the Channel Islands, in which case you are not on French soil any longer.

I have known an Italian translator who spend half a year in Italy and more than the other half on the Bahamas. Guess why?

As said, consulting a specialist on both sides of the Channel and hear both bells rings could prevent a lot of uncessary hassle.

And for those who complain that they pay too much taxes: in Europe there is such a thing a freedom of movement of persons. Free choice to live where you want within the boundaries of the soon 27 E.U.-Member States with 27 different types of fiscal and social legislation.
If you feel compelled to live in the country where your working language is spoken, there is always tiny Luxemburg. If I am not mistaken it's official languages are French, German and Letzenburgisch.



[Edited at 2006-08-02 19:06]


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B D Finch  Identity Verified
France
Local time: 19:14
Member (2006)
French to English
+ ...
TOPIC STARTER
Thanks for all your replies Aug 6, 2006

Thank you to everybody who answered. Rightly or wrongly, I now feel less trepidation about dealing with the bureaucratic side of registration in France

I definitely believe in fully contributing to the society that one lives in - which in a way is what every one of you has done by pitching in with your answers and advice.

I greatly look forward to experiencing on a daily basis France's wonderful market produce, the good roads and public transport system, the mountain air, grandes randonées and mountain refuges, the health service, pavement cafés and polished pavements adorned with a light sprinkling of dog pooh, the subsidised theatre, concerts, music festivals of varying qualities... I shall pay my socially necessary tax contributions to the same and look forward too to living in a state where the idea of citizenship has more currency and where [hypothetical] marches of millions of people against illegal wars might come up against the CRS, but would not just be ignored.


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