My family and I are relocating to Champagne Mouton next month.
I am a selfemployed builder in the UK and I am still unsure which is best Micro-enterprise or SARL?
I would like some adcice and
/or input from some of you who have one or the other.
Thank you in advance.
It’s not a case of “which is best”. Each business structure has potential advantages and potential disadvantages. It’s a case of which will suit you best, which in turn will depend entirely on your business model and your family circumstances. Things like expected turnover/overheads, do you need/can you afford to pay higher cotisations for higher social protection, will your wife/partner help in the business eg taking phone calls and doing the accounts, etc, etc - lots of factors to consider.
Just out of interest, why have you picked micro and SARL to choose between? Why not also consider SAS, SASU, EIRL, EURL…?
Hello Anna. Thank you for your reply.
Yes there are a lot of factors to consider but i decided between those two as they were recommended to me by builders i know in the area. I am looking at the other structures now.
We hope she can help with the accounts and day to day running of the business. Also we will be converting an outnuilding for family and friends but would like to rent it if we can. (Extra income) Is any of these structures suitable?
I suggest you either look into it in a lot more detail for yourself, or you get professional advice eg a Skype consultancy with Catharine Skype Consultancy Services or advice from Valérie http://www.startbusinessinfrance.com/ or go to another of the many sources of advice available.
Choosing the most suitable business structure can make all the difference to the success or otherwise of your business so it really is worth going to a bit of trouble to understand how the various structures work and make a good decision. What works for other builders might or might not work for you, it’s impossible to advise without knowing anything about your business model. Have you done a business plan and worked out some projected figures? You say “builder” so to start with, which trade will you register for, will it be just one trade or several, if several how many exactly? Which specific trades you register for will determine what professional insurances (if any) you will be obliged to take out, then you will be able to get an idea of how much you’ll be paying per year in insurance. This is an important factor because on micro your deductions are based on turnover, so the higher your expenses and overheads, the less attractive micro becomes. On other regimes your deductions are based on actual profits, which involves more paperwork and could even be to your disadvantage if you have exceptionally low outgoings, but will be beneficial if you have high outgoings.
So for instance if you’re going to register for 3 or 4 trades and pay out several thousand € in insurance over the year, and if your work will involve buying lots of materials and/or investing heavily in equipment, and if your wife will work in the business with you, micro would be a crazy choice. On the other hand if you’re going to register for one trade and do small jobs that don’t need decennale cover and don’t involve supplying materials, it might be a good option.
I have heard of someone registered as a Petit Bricolage which is a kind of handy man. He pays 25% taxes as an Auto Entrepeneur. I know AU is no longer available it is ME now. I think something like that would suit me to start.
It’s worth doing the research to find out which regime suits your needs. The AE/ME system has always been popular with British workers moving to France as they see it as the easiest way to become self employed like they were in the UK with the added benefit of easier accounting and taxation. However they don’t understand the French mindset when it comes to trades and there are countless stories about how someone who, for example, registered as a painter and decorator now plies his trade as a second rate roofervwithout the necessary insurances etc. If you need to buy a lot of raw materials or employ staff ME is not for you. Rather than sign up to an unsuitable regime now and go through a change later why not find the most suitable now. You’re going to a new country to set up a new business, surely it’s worth investing the necessary time and money to get it right. I can’t see that signing up as a Petit Bricoleur is really the way for a professional, skilled tradesman to go.
Yes, if you only intend to do small unskilled jobs and your wife won’t be involved in the business then ME could be a good way to start. Petit bricolage is classed as services à la personne (domestic services) not artisan activities, if you register for this you can’t take on skilled work and each separate job must take no longer than a couple of hours
https://www.entreprises.gouv.fr/services-a-la-personne/travaux-petit-bricolage gives examples of what you can and can’t do. For example you can assemble flat pack furniture, put up shelves, put up smoke alarms, put up curtains. You can’t do structural repairs or maintenance.
You don’t actually need to set up a business to do odd jobs, France has an online platform where householders can pay domestic service providers, and there are some advantages to doing it this way. This system is explained in English here https://www.connexionfrance.com/Archive/Employing-people-to-help-at-home . But obviously you can register a business instead if you prefer, or you can use a mixture of both systems.
NB the 25% you mention is mostly social security (ie equivalent of NI contributions) not income tax.
Hi, I am Antolin’s wife, Kate. I thought I’d join the discussion to say a big thank you to those who have contributed so far. We certainly do need to look into this in more depth in order to make the right decision, but so far, your replies have made my understanding of the options much clearer. Thanks again, keep the replies coming.
Hello Anna and David.
Thank you both.
In your experiences what recomendation can you give me.
Should I register for the ME and the two trades i am good at Plastering and tilling. Or can i register as a general builder?
Or should I register for EIRL as i want to do small jobs on my own and don’t want to set up a full fledged company?
I guess if i am going to convert a barn for a customer my turnover will surpass the treshold for the ME so i will have to register my company as EIRL.
If you’re qualified as a plasterer and a tiler you can register for those two if you want. I believe you are legally obliged to take out the 10-year insurance guarantee to cover tiling work, which will likely cost you between 1000 and 2000€ per year. Not sure whether you would also need 10-year insurance to cover plastering work, if you do your overheads are starting to get quite high already. Incidentally the French tend to use plasterboard, they don’t tend to do much plastering the UK way.
However I don’t see how you could do a barn conversion on your own if you’re only registered as a plasterer and a tiler, because wouldn’t there be likely to be other activities involved besides plastering and tiling? If it needed any roofing you couldn’t do that unless you are registered and insured as a roofer, if it needed any carpentry or masonry or plumbing you couldn’t do that unless you are registered and insured as a carpenter or mason or plumber. You would have to bring other tradesmen in to do those things.
Of course there are broader categories categories that let you build new houses or carry out renovations, but the insurance premiums for major categories like that would be eye watering. Big companies will register under these codes but I can’t imagine it would make sense for a one man band.
Regardless of whether they are a micro or a EIRL or a SARL or what, most French artisans who work on their own stick to one trade, to begin with at least, because it makes more sense to focus on one activity and thus only have to pay out for one professional insurance.
As regards turnover, the turnover ceiling as an artisan on ME is currently around 80k. If you turned over 80k as an ME, you would pay getting on for 20k in social contributions. Does that make sense to you, because it doesn’t to me. If I was turning over 80k I would be looking at ways to reinvest some of that back into the business so as to gain some strategic benefit from it and minimise my deductions, So I would not be on ME even though technically I could be. But, that is your decision.
I found this site which specialises in insurance for micro entrepreneur artisans (I’m not recommending it, I know nothing about it) https://www.mon-assurance-decennale.fr/code-ape-decennale-btp.html -
scroll down a bit and you’ll see a list of activity codes for the building sector. There is a different code for each activity and you can see how specific each code is. You might decide to register one activity code or several. For each activity there will be a definition of exactly what it covers and what it excludes, and there are specific rules on what insurance is required for that activity code. You can’t carry out any activities that you’re not registered and insured for. So you can see why for a small business, “general building” that involves a bit of everything isn’t a viable option because even supposing you were qualified enough to be allowed to register for all the trades you might need and then to be accepted for insurance for all of them, you would have paid out tens of thousands of euros before you’d even started. If you click on the name of each trade, at the bottom of that same webpage, it will tell you what that tradesman can do and give you a ball park figure of how much the insurance might be for that activity.
Hope this helps clarify how it works.