Hi all, My partner and I are wanting to move back to France (I spent my childhood there). We will be purchasing a ski chalet and running bed & breakfast/running retreats etc.
We will most probably be having outside investment to start with/mortgage. My question is, would it be better to pay ourselves a wage from the business so then all profits can be split between us? Or put the business accounts through and then divide up?
Thank you 
That depends on a lot of things.
Companies in France are not like the UK. There, you pay a nominal fee to Companies House and you have a limited company.
There are a few company structures to choose from, each with its own merits and drawbacks. Within each structure there are a few financual reporting regimes, one of which should be chosen and recorded inthe company registration.
The simplest form is the Micro-Enterprise. Drawbacks are that you are liable for all debts, all possessions bar the roof over your head can be seized should things turn really bad. A partner or spouse can be recognised as a participant and under French law their possessions can also be siezed. That us, if I fully understood our Stage Prealable d’Installation at the Chambre de Metiers.
You can set up as an enterprise owned by one individual, or with multiple persons each owning a share. In terms of taxation, you are assessed as a household in France. From a tax viewpoint there is not much to be gained from spreading what the company pays you between more people.
Social contributions are what you may want to consider. I do not know what nationalities you hold; for us, us UK nationals I wanted to protect us from potentially being declared Third Country Nationals, either soon or at some stage later. The key thing I wanted to ensure is that Jackie’s contributions to Securite Sociale are recognised in her name, that she is not holding a Carte Vitale solely based in my own income. We set our business up as an SAS, Societe sur Actions Simplifiee. We take a minimal, nominal wage out, then will take dividends on a quarterly basis. The company uses the financial regime of Impots sur Societe, tax and cotisations are paid on dividends.
At our age we cannot amass sufficient pension points before retirement age to qualify for a French state pension. We have paid sufficient UK NI to qualify for the UK state pension, when we are old enough. The rules for an SAS require less Securite Sociale cotisations because it does not contribute to the state pension funds.
I mention all if this not because I think it was what you should do; this just gives a highlight of some of the decisions we made when trying to decide on company statut and financial regime.
We started at the local Chambre de Commerce for advice, I suggest doing the same. Even though our business (Micro Brewery) is not in their remit, they were very helpful and pointed us in the right direction - Chambre de Metiers et Artisans. They even followed up to make sure that we had successfully contacted them.
At the CMA we had to attend a 5 day business start up course, it was well worth it if a bit hard going. 5 days, 9:00 - 1700, 1.5 hours for lunch, lecture upon lecture - in French of course .
Hi Martin,
Tha k you ever so much for that. Fantastic news that they run courses. I am bilingual which helps the situation a lot. My hope was that we would be able to take out a minimal salary and then withdraw dividends 1/2 per year, where we can then give the other investor their cut, similar to what you were explaining. Just trying to get my head around some bits so I can explain to the potential investor what will happen. Again thank you
https://www.lecoindesentrepreneurs.fr/imposition-des-dividendes/
explains how dividends are taxed.
see
https://www.assistant-juridique.fr/declaration_insaisissabilite_autoentrepreneur.jsp
Good luck with getting a French bank loan if you file a declaration of insaisissabilite, they dont like them and if they dont know you already as a client, it might be more difficult to get one.
Another thing to bear in mind is that if you create a business structure like a SAS, you need to be aware of the rules relating to dividend pay outs (18 month wait for first acounting period ?), corporate taxation rates, and income taxation on dividends. Even with the new proposed lower corporate taxation rates, France is still one of the highest overall taxation countries in the EU. You might want to consider setting up your business in a different EU country with more favorable corporate taxation and then pay the 30% personal income tax in France on any dividends paid out from that business. Obviously, overheads also need to be borne in mind for this kind of setup.
Maybe the obvious choice would be to set it up as a UK company whilst still UK resident? then move to France and go onto the company’s payroll as French employees.
By repute the UK is the lowest tax, lowest regulation EU state and likely to get even more so after Brexit.
Or, would there be restrictions a UK company providing this particular service in the EU?
We won’t be getting a bank loan, we have an investor/family member who we will be sharing the venture with. I don’t think we would want to go down the running it from a different country, specially with Brexit looming. We are aware of the high tax implications it was more to find out what business models were available to a b&b/gite business with more than one owner, 1 of which will be living abroad. Thank you for your replies
This is probably a good place to start
https://www.economie.gouv.fr/entreprises/entreprise-choisir-statut-juridique
Thank you very much