Auto-Entrepreneur: A Tax Classification, Not a Visa Status

On more than one occasion I’ve gotten emails from people who use “auto entrepreneur” and “profession liberale” interchangeably.  They aren’t interchangeable, and more importantly for readers of this blog, auto entrepreneur is not a visa status.  It’s a tax classification, and not necessarily a desirable one at that.

How Did It Start?

In 2009 President Sarkozy created “auto entrepreneur” as a simple way for French people (and foreign nationals) to start small businesses.  With a ceiling of 32,900€/year of topline revenue, it was seen as a liberalizing measure, without committing to full Anglo-Saxon soul destruction.  You would pay your social charges “as you go” which meant if you had no sales, there were no charges, and if you went two years without earning anything, you  would simply automatically lose the classification with no penalty. This allowed holders of the status to try starting a small business “risk free” in tax terms, and potentially add on an additional stream of revenue without onerous accounting burdens.

The regime is actually now called “micro entrepreneur” and you are said to be running a “micro enterprise” if you use this tax classification.  In American terms this is a sole proprietorship, meaning you have unlimited legal liability should problems result.

Confusion

There’s a lot of bad advice on the internet and so on more than one occasion people have registered for auto-entrepreneur while on Visitor visas, thinking that they had found a legal way to work in France, not realizing that the regime that allows you to register and get a SIRET (what Americans know as an EIN – employer identification number) isn’t connected with OFII so they aren’t equipped to validate whether you’re eligible to register.  You just have to supply some basic info and then you can get a number.  But this has led to tears on more than one occasion when someone showed up to renew their visitor visa with auto-entrepreneur earnings on their bank statements and a SIRET they shouldn’t have had.  Visa renewal denied, eligibility to live in France ended, and the process of living in France had to begin all over again, back in their home countries.

Furthermore, President Macron raised the limit that micro-enterprises could earn to 70,000€, but most people don’t know that the minute you go over 33,100€ you are subject to VAT (as I outlined here), no matter what your tax classification is.  Goodbye simple accounting, hello nightmare exchanges with URSSAF and the Department of Finance.

So…

So, if you want to have a business in France, make sure you have the correct visa for it, or that your CDI allows for it.  For some foreigners here on a salarie work visa, their contract specifically prohibits their starting a business under the micro-entrepreneur classification.  If you’re here as a Visitor, you are ineligible to apply for this classification.  I know that there’s nothing on the internet that seems to say this, but it’s just a simple fact: if you don’t have a visa allowing you to work, going to a website and clicking a few buttons isn’t a magical fix.  This relates back to something I’ve said before: no one from French immigration ever tells you that as a visitor you have to file taxes in France even though you aren’t paying taxes in France.  Remember, in immigration in general and in France in particular, if it seems too good to be true, it is.  Always double and triple check before you make a major decision regarding these issues.

If you want to start a small business in France, profession liberale remains the simplest route, with many options to change it if your business becomes really successful, and zero requirement to register as a micro entrepreneur at any stage whatsoever.

Photo by slon_dot_pics from Pexels

Which Long Term Visa to Pursue: Visitor or Profession Liberale?

Often when people schedule a consultation with me about the profession liberale visa, they do so convinced that this is the right path for them, but on more than one occasion, after asking the right questions, I’ve helped them understand that what they should probably do is obtain (or renew) a visitor visa instead.  This original misapprehension is due in part to an unclear understanding of immigration and the visa process in general, and other times it’s due to a lack of clarity as to the why and how of the client’s projected time and future in France.  So this article is a hopeful corrective to the confusion about which visa to get.

In brief, I characterize “visitor” status as easy, option-oriented, but repetitive, and “profession liberale” status as all-in, with a path to citizenship, but challenging, as it involves starting an actual business.

Visitor

People consider it a “hassle” to show up once a year with a predictable and easy list of paperwork so that you can continue to legally live in a country in which you have no citizenship.  But it’s not a hassle.  It’s pretty easy once you get used to it, and it becomes something seasonal, like putting up Christmas decorations.  It’s a chore, but you’re so happy when it’s done.

Visitor status does not provide a path to citizenship.

Visitor status requires you to file taxes, even though your visa status ensures you won’t be paying taxes.

Visitor status gives you access to the EU, as you are a French resident.  Technically you should be in France the majority of the calendar year, but the French have no real way to verify this, and don’t really care, as long as you fulfill your legal requirements.  I know of someone who lives in Malta most of the year, but for some reason has chosen to have French visitor status and flies in for his prefecture appointments.

Visitor status allows you, after the first renewal, to switch to another visa, at any time.  You’re not stuck with this status forever.  If at any point you want to wind things up, simply leave France.  No additional paperwork required: you’ll just expire out of the system.

Profession Liberale

Profession Liberale status (not to be confused with “auto entrepreneur,” which is a tax classification, not an immigration status and hereafter PL) was a dream fit for me for a number of reasons: I’m a veteran business owner, I want French citizenship, and I wanted the possibility of a multi-year card.

People get very interested in this visa status because of the citizenship path but ignore or downplay that you have to start and validate a business.  This means you will enroll in a number of French agencies that will continue to bill you forever. This includes your social charges, health care charges, and your pension, to say nothing of taxes.  Visitor status is just about obtaining the right to live in France, whereas PL is about living AND working, and the paperwork is correspondingly more onerous, both in application, verification, and renewal.

If at any point you decide this (by “this” I mean France or running a business) isn’t for you, you’ll need to close your business, close down your bank account, and de-register at all the agencies you are registered at, which otherwise will continue to bill or charge you indefinitely.  It also means that your visa will expire at the end of your current term.  In that sense, it’s not as traumatic as a traditional work visa, in which you lose your residency rights within 60 days of losing your job, but it does mean that unlike a Visitor visa, a PL visa is connected with something other than your simple will and desire to live in France: it relies on your ability to maintain and keep a business, which is an entirely different set of skills from obtaining a basic visa or having a “regular job.”

Now, if you already have a successful or growing business/freelance career, you would simply start billing your clients through your French entity and such pressures are obviated.  Otherwise, if you are starting a business from scratch, you add the pressure of business startup to an immigration visa.

Whatever visa you decide to pursue, remember to banish panic and fear and replace it with knowledge and calm.  This process is only as scary as you let it be.