Micro-entrepreneur status: Pros and cons of self-employment in France

After a shaky start when it launched in 2008, micro-entrepreneur status (then called auto-entrepreneur) has become part of French working life.

It is hard to remember quite how revolutionary it was at the time, when almost all the state’s efforts went into pushing salaried employment.

Anyone who was not in salaried employment, including many doctors and plumbers, had to sign up with trade bodies or chambres de commerce, complete multiple forms and pay a fee to be allowed to work.

Hiring accountants at €1,000 a year to complete tax returns was an additional financial burden.

Read more: Self-employed in France get new law to protect home if business fails

What are the benefits of registering as a micro-entrepreneur?

The simplified procedures for micro-entrepreneurs are far less demanding.

Advantages of the system include:

• being able to create a business in your own name as a one-person operation
• not having to register for VAT if your sales are below €91,900 for vendors, or your income is under €36,800 if providing services
• simple accounting you can do at home, which is unlikely to be challenged by authorities
• simple monthly or quarterly declarations to Urssaf for health, retirement and other obligations
• flat-rate tax allowances of 34% for professions libérales, 50% for services and artisans, and 71% for buying and selling, which avoids the need to calculate the 'real' expenses for deduction each year
• being in the French social security system with rights nearly as good as salaried workers
• sick pay, as long as you earn between €4,162 and €43,992 (2023 figures)

Read more: Explained: which self-employment visa to live and work in France?

What are the downsides to being a micro-entrepreneur?

However, the system does also have its flaws, among them:

• you still miss out on some of the advantages, such as meal vouchers and health insurance, which salaried workers have
• retirement benefits are not as good as for salaried workers and your contributions are higher
• banks can be wary of lending to micro-entrepreneurs, and typically ask to see tax returns for four years
• complementary health insurance policies (mutuelles) are around a third more expensive than for salaried workers
• you cannot deduct your expenses – not ideal if you have employees or are renting premises, for example
• although simplified, vestiges of the old bureaucracy remain – micro-entrepreneurs say that the latest online registration form takes around 90 minutes to fill in, with the last question asking if you are a professional fisherman (marin pêcheur)
• obligatory social security charges are at least 16% of what you earn – with income tax on top

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