Setting up a business

Start your business in France with firm foundations to be in with a chance of cracking the continental markets, says Louise Sayers

For many expats moving to France, a lack of fluency in French makes getting a job difficult. Add to that the high – and rising – rate of unemployment, and it’s easy to see why many expats opt to set up their own businesses.

My husband and I chose that route in 2003, setting up our property business, Med and Mountain, in Perpignan. Since then, we’ve set up a second off-shoot business, France-SOS, helping expats in France and we have also established a property renovation company.

Gleaned from all that experience, here are some tips for when you start your own business in France:

LEARN FRENCH

It’s obvious, but worth saying all the same. Attempting to run a business in France without being able to communicate properly is adding an extra layer of difficulty to what is already a big challenge, especially if you have not run your own business before. I have the utmost respect for anyone who jumps in at the deep end with minimal French but if that’s what you choose to do, make sure that you are making the effort to learn French as you go along.

A few private lessons tailored to your requirements will pay huge dividends. Concentrate on learning vocabulary related to your particular field and prepare for the conversations that you are likely to have with your clients, suppliers, accountant and any government administrative bodies that you may have to deal with.

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DON’T RELY SOLELY ON THE EXPAT MARKET

Pots and kettles you might think, and you’d be right, but this is a bit of advice that I would give from personal experience, even though my business does target mainly expats! If your business is tailored to English speakers, you are severely limiting your potential market. Not only that, but you are unlikely to be the first Brit to have had your idea and chances are that the competition will be fierce. If you are just moving out, trying to compete with existing expat businesses who are chasing the same few clients as you is going to be really difficult.

In addition, many expats living in France have been hit pretty hard by la crise one way or another and in less affluent parts of France, like the Pyr�n�es-Orientales where I live, many expats are scraping by and just about managing to cover living expenses.

If you can think of a business which will appeal as much, or more, to the local French market then your potential sales are going to be much greater.

DO YOUR RESEARCH

Don’t just cross your fingers and hope that your business idea is going to work over the Channel. Research, research and research some more. Before we moved out to Perpignan to establish our estate agency, we visited the Pyr�n�es-Orientales area on a reconnaissance trip and spent a full two weeks visiting every town and village in the area, researching the type of property for sale, prices and, even more importantly, the competition.

Thorough research is absolutely essential to give you as good an idea as you can get of whether there is a market for whatever goods or services you are hoping to offer, and will influence your pricing structure, cashflow and business plan.

Moving lock, stock and barrel over to France on little more than a whim is absolute folly and a sure-fire way to have you moving back to the UK with your tail between your legs as quick as you can say “entrepreneur”.

HAVE A BIG BUFFER OF FUNDS

“Double your budget and halve your projected income” is a good rule of thumb when looking at the potential income and cashflow of your new business.

You may think that you will be up and running within a month, and that could well be the case, but it’s by no means guaranteed. For one thing, the laborious French administration could put a few obstacles in your way.

Think carefully about the funds that you have available to you, how long they are going to last and the standard of living that you can afford while you are waiting for your millions to come rolling in. I know from personal experience what it feels like to have just €200 left in your bank account and it ain’t pretty!

CONSIDER WHICH TAX REGIME TO CHOOSE

Much has been made of France’s auto-entrepreneur scheme in expat circles and it is a good way to get your business started quickly and with a minimum of red tape. The great advantage of the scheme is the simplicity of it. You can register online and be working within minutes. Income is declared online monthly or quarterly and the amount of tax and cotisations (national insurance contributions) you need to pay is calculated automatically. You don’t need an accountant and you pay lower cotisations than under other tax regimes. It is also very easy and costs nothing to stop if your business idea is not the success you hoped.A word of caution, however. The auto-entrepreneur scheme is not a panacea for everyone. For one thing, the amount that you can earn under this scheme is capped so if your cashflow projections show income over the maximum levels allowed under the scheme then you will want to consider the other options, such as a limited company (SARL).

The second important thing about the auto-entrepreneur scheme is that you are taxed on turnover so you cannot offset overheads. If these are significant for your business then this regime is definitely not for you.

If you opt for a regime other than the auto-entrepreneur, you will definitely need a good accountant. Finding one can be easier said than done in France where, in my experience, many accountants see their role as crunching the numbers and are not keen to advise on how best to set up and run your business.

There are good ones out there though and you must seek one out. A good accountant can also keep you abreast of changes in the law, which happen all too frequently and can have a huge impact on your business. We set up a limited company to sell property but subsequent changes in the law meant that we could no longer do that and we were left with a company that was unable to carry out the activity it was set up for!

Finally, when you register to work in France, whatever regime you choose, you will receive reams of paperwork to deal with. There are a number of well-known scams targeting auto-entrepreneurs so be very wary of all correspondence asking for money, and if in doubt, check!

USEFUL WEBSITES

www.cci.fr - use this site to find your local chamber of commerce, a useful source of information for sales-based commercial businesses.

www.artisanat.fr – for your local chambre de m�tiers if you have a skilled profession such as a hairdresser, or sell something you make yourself

www.lautoentrepreneur.fr – the government’s official site about the auto-entrepreneur scheme

www.startbusinessinfrance.com – a great English resource for anyone starting a business in France

Louise Sayers provides administrative assistance and relocation services to individuals and businesses throughout France

www.france-sos.com