Start Your Own Business – Everything You Need to Know

The self-employed scheme has several advantages:

• Self-employment is easy and accessible.
• You can create your business easily, without the need for a diploma or professional experience.
• You are free to run your business as you wish, even if you are not a craftsman or a trader.
• You will not pay a substantial amount for your business registration, because you are not subject to VAT.
• You benefit from the simplified social and tax system, in particular the VAT deductible or the personal income tax payment.

If you want to start your own business and become your own boss, the freelance system is a good way to test the experience.

Let’s look at everything you need to know before you start.

A state open to all

The status of the car dealer is very flexible.

Applies to all entrepreneur profiles. Whether you are a salaried employee, a retiree, a student or a job seeker, you can create a self-employed activity and benefit from the simplified scheme.

As a self-employed person, you only need to be of legal age and domiciled in France to start your own business.

What are the steps to becoming a freelancer?

If the administration scares you, you know that the steps to create and run your own business are easy.

In fact, you can perform administrative procedures remotely through the use of an online platform. This saves time and no need to move.

Just:

• Declare your start of activity.
• Please wait to get your SIREN number.
• Choose a home for your business.
• Choose your professional insurance and comply with the accounting, tax and information obligations of the self-employed scheme.

To help you in your efforts, the self-employed portal offers you a space dedicated to entrepreneurs.

Here you will find all the information you need, as well as online services.

A simple and fast payroll tax system

Declaring and paying your charges is very simple.

Simply:

• Sign in to your Car Dealer account to access online services.
• You must then choose your payment frequency, accrue a bill, and declare your income.
• Once all the steps have been completed, the amount of the contributions is calculated and charged automatically.

In case of late payment of social expenses, penalties apply: a penalty equal to 1.50% of the amount due per month or fraction of a month’s delay is applied.

The particularities of the scheme

The microsocial scheme is a simplified scheme for setting up your business.

In fact, you do not need a professional bank account to declare your income. You can opt for the high tax (optional) to be able to tax on the income generated by your activity.

Income tax corresponds to a percentage of the turnover achieved. It is originally deducted directly from your bank account and is automatically applied to your tax return.

The tax rate is 1.7% for the sale of goods and services, and 2.2% for professional activities. It can be reduced if you have expenses below a certain amount.

Social security and final payment are optional, but highly recommended. The discharge payment option does not exempt the individual employer from declaring their monthly or quarterly billing, at their choice.

The social rate is calculated on the turnover without taxes. It is paid by both the contractor and the collection agency.

Rotation limit:

The framework for self-employment is specified, in particular, by the limits in terms of turnover:

The VAT ceiling:

The car owner is not obliged to pay VAT if their turnover does not exceed the limit established by law.

For liberal activities and professions:

• The VAT exemption threshold is € 34,400 excluding taxes in 2022
• Increased VAT threshold (or tolerance threshold) is € 36,500 excluding taxes
• The VAT tolerance period is between € 34,400 and € 36,500 excluding VAT
• The annual turnover threshold is set at 72,600 euros without taxes in 2022

For freelancers:

• The VAT exemption threshold is € 85,800 excluding taxes in 2022
• Increased VAT threshold (or tolerance threshold) is € 94,300 excluding taxes
• The VAT tolerance period is between € 85,800 and € 94,300 excluding VAT.
• The annual turnover threshold is set at € 176,200 excluding taxes in 2022

Self-employment tax and social taxes:

Self-employment taxes and social expenses are calculated based on the income of your business. They consist of two parts.

• A fixed part: VAT and public health contributions
• An amount proportional to the turnover (called “withholding tax”) of the social security entities. This amount is deducted directly from your bank account.

The conditions for exemption from these taxes are subject to certain geographical, sectoral or activity limits: you must always consult the specific rules in force when setting up your micro-enterprise.

Possible help to create your own business:

Various grants are available to fund your project based on the profile of the candidates and their professional activities.

The self-employed person is not entitled to ARCE compensation. On the other hand, you can benefit from other compensation such as ARE or social benefits (such as family benefits).

If you want to know more about the different benefits of self-employment, we invite you to consult our website where there is a complete guide.

The creation of an autonomous company is also possible thanks to the PPE (Professional Entrepreneurial Project). This training allows candidates to acquire the skills needed to become an entrepreneur. In addition, participants benefit from free training.

What are the conditions for opening a micro-enterprise?

Eligibility criteria must be met in order to benefit from this business structure (not being a civil servant, not being an independent entrepreneur, etc.).

For example, anyone can become a self-employed person, either as a primary or secondary occupation. In addition, you must register with the Mercantile and Mercantile Registry (RCS) if you are a trader or with the Trades Directory (RM) if you are a craftsman.

Creating a freelance business is relatively straightforward and easy. However, it is important to understand the tax and social charges associated with this type of activity so that you can make informed decisions to start your own business.

What is the difference between a micro-entrepreneur and a self-employed person?

The micro-entrepreneur is a business structure that was created in France in 2008. It allows the self-employed to create their own company with reduced administrative procedures and simplified social and tax rules.

The self-employed person is a business structure that was created in 2009. It is similar to the micro-entrepreneur, but with even simpler administrative procedures.

The micro-entrepreneur and the self-employed are both legally designated as “micro-entrepreneurs” since 2016. There is no longer any difference between the two schemes.

Specify the nature of your activity:

It is important to know that the self-employment scheme is not intended for all activities. For example, if you are a lawyer, doctor or architect, you cannot be self-employed.

A code dedicated to each activity is assigned as soon as an autonomous company is created. Thus, certain APE codes do not allow claiming AE status. To find out if your activity is suitable for self-employment, we invite you to consult the dedicated portal where a complete list of eligible activities is available.