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Everything you need to know about starting a business in France

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Always wanted to start a business in France but never quite knew how to go about it? Well this is the moment, reckons Maupard, an English-speaking business advisory boutique based in Paris. They tell us everything you need to know before you take the plunge.

Following Macron’s promise to make France "a start-up nation", France seems ready to compete with Silicon Valley as a hub for entrepreneurs.

France knows that the best way to stimulate its economy is by investing in start-ups and small companies. For this reason, France has the most generous tax credit schemes and government subsidies in Europe, making it the ideal place for start-ups and small companies to invest.

The French have a penchant for bureaucracy and paperwork which means there are a few extra hoops to jump through. Here, Rotimi Akindeinde, business developer at Maupard Fiduciaire in Paris, a firm which specializes in helping small businesses do business in France, explains more about these challenges and how to tackle them.

What are the options for starting a business in France as a self-employed individual?

When looking to setup a business as a sole-trader, the best two options are to apply as a micro-enterprise or as an SAS. As a micro-enterprise, you are just subject to personal income tax. A micro-entrepreneur is excused from professionally declaring their profits but must declare the annual amount of gross sales through the annual revenue declaration form.

It’s worth noting that the micro-enterprise status has a turnover limit of €33,000, so if you think your business will take you over this threshold, you’ll need to incorporate a business in France. At this point, you best bet would probably be the SAS option, but depending on the nature of your business, one of the other frameworks could be more advisable. It is also worth noting that before incorporating, representation through a Liaison office or Branch can be a cheaper way to start out in France on a remote basis. We can help you decide which form would work best for your business.



So how do you go about incorporating a business in France?

If you need your business to be a visible entity in France (for billing purposes, credibility or financial visibility) you’ll want to incorporate in some way. Incorporation is essentially registering your business so that you are formally recognized by the various administrations in France. When it comes to incorporation, we advise registering VAT in advance, filing your rulings for tax incentives and setting up your administrative address, even if there is no business yet. The main choices for which type of business to incorporate are the following.

SARL – société à responsabilité limitée – this is a private limited company which much have at least two shareholders – (likely to be business partners).

EURL - entreprise unipersonnelle à responsabilité limitée – this is also a private limited company – but which can only have one single shareholder. This shareholder  – can also be the manager or can appoint someone else as a manager (won’t be shareholder). If the EURL’s single shareholder is a company then the EURL will be subject to corporate tax. If the single shareholder is an individual and is also the manager, then you can apply for the microenterprise status for the EURL. If the shareholder is an individual (as against a company) but not the manager, the EURL will be subject to income tax.

SA – société anonyme –  equivalent of a Plc. Has a board etc. Has the option of being publicly listed.

SAS - Société par actions simplifiée(a more modern legal framework - the most simplified form of a company in France where shareholders (at least two) control the company - subject to corporate tax. Easier to run and manage than SA, but cannot be publicly listed.

SASU - Société par actions simplifiée unipersonnelle – same as the SAS but one single shareholder. Subject to corporate tax.  

In France, what makes this process difficult is that the tax administration and social security services require a range of corporate information to ensure the reliability and legitimacy of you and your business. This information, most of which will be required in French, will include information on associates/managers, financial forecasts, and details of all of the owners/stakeholders of the business. It’s also worth noting that having a corporate bank account in France will make incorporation a whole lot easier.


What about opening a corporate bank account?

In the US or the UK, setting up a corporate bank account is usually quick and easy. However, in France, thanks to recent regulations, it can take a few months to open an account, so plan ahead and start early. The process of opening a corporate bank account is very similar to incorporating a business, in that it will include the collection of a range of corporate and personal documents.

Also, we strongly recommend you open this account with enough capital to cover your initial opening costs, and to ensure your balance is always positive.

At some steps along the way, you will be required to come to France to meet the representatives at the bank.

However, despite these inconveniences, the lucrative opportunities in the French market certainly make this process worth it. And look at it this way; if it was easy, your competitors would already be here.

If you opt for a business framework that is subject to private income tax (as against corporate tax), a personal bank account could be advisable. However, if your business framework is subject to corporate income tax, it would be advisable to have a corporate bank account. 

Could you tell us a bit about corporate tax in France?

If you have a permanent establishment in France (a fixed and registered location that carries out business in France), unlike other countries, only the sources of income that are linked to this Permanent Establishment are included in the calculation of the company’s corporate tax.

Income generated by the foreign (UK/US company) is exempt. The corporate tax rate is thus 33%. The tax year is from 1st January to the 31st December. So, for the tax year 2017, the final corporate tax deadline is 15th April 2018. This must be paid online. 


We’ve heard a lot about the French FEC File, could you tell us more about it?

For most businesses registered in France, you are now required to produce a FEC file (computerised accounting entries file). In the event of a tax audit, this file must be provided to the tax auditor at the first meeting. The FEC file must be provided from the fiscal year 2014. It should be issued by your accounting software and must be compliant with French accounting standards, and be in French. Failure to produce a fully compliant FEC file can result in a fine of either €5000 per audited year, or 10% of the amount reassessed by the French taxman, whichever figure is more.

Are there any tax incentives available for businesses in France?

France has some of the most generous tax credit schemes and government subsidies in Europe, making it the ideal place for start-ups and small companies to invest.

The JEI (Young Innovative Company) status and the CIR (Research Tax Credit) allow firms to enjoy significant tax exemptions such as 30% of all R&D expenses up to 100 million euros. These scheme is so lucrative that Google and Microsoft have decided to set up their R&D (Research and Development) centres in Paris. We recommend introducing a ruling request for R&D credit tax before starting your project.

Could you tell us about the Inpatriation Scheme?

The “régime d’impatriation” aims to encourage country managers and other international employees to come and work for French firms. This scheme offers significant income tax exemptions, wealth tax exemptions, and social contribution exemptions. So, it’s definitely work looking into this to see you if you meet the conditions.

What about paying social security contributions?

If you are a foreign company without an establishment in France, you are considered a non-resident employer and if you want to recruit an employee operating in France, you’ll have to pay French social contributions.

The French administration requires a local contact to reply to any correspondence related to social declarations. You can designate a contact residing in France to fulfil your reporting obligations and pay social security contributions due for your employees in France.

As an employer, you may appoint a representative to fulfil these social obligations. This representative will be personally liable for the prompt declaration and payment of the amounts due. It is worth noting that in France, the non-resident employer cannot appoint an employee of his company as a representative.


How should non-residents claim back their tax?

In case of an error in the main base or the actual calculation of taxes, the taxpayer or their representatives can submit a claim to the administration in order to obtain a compensation.

The Article R*196-1 of the Tax Procedures Book foresees a compensation period that expires on December 31st of the second year after the collection starting date (date that is stated on the tax notice) for the income tax or for the notification of the assessment notice (l’avis de mise en recouvrement – AMR) for the wealth tax. If you receive your income tax notice in September 2017, you can make a claim until 31 December 2019.  

Any last nee-to-know information on doing business in France?

Have the right supporting documents ready, and in French (this includes, all official personal documents, financial forecasts, balance sheets for UK entity (if any), information on all stakeholders, company strategy, etc.)

For documents that need to be translated into French, Maupard offers a translation service.

The French administration is very formal and if you lack the requested supporting documents, it can be considered disrespectful, let alone insufficient. Being prepared will add to your competitive advantage and anticipating administrative delays will help you meet your own deadlines. The market can be competitive - understanding regulations can often be the difference between success and failure.

As long as you have official documentation, not being French is not a disadvantage in itself. France is keen to be considered an international destination for business. The advantage of being French is that you are more likely to be familiar with the numerous required procedures and organisations.

Also, on a practical level, being/speaking French, you will have no problems communicating with the relevant administrations. 

Maupard Fiduciaire are an English-speaking business advisory boutique based in Paris. They specialise in helping SMEs and small businesses do business in France and have been operating in this sector for more than 30 years. They offer a range of business development products, as well as accounting, tax advice, payroll,l and audit services. As cross-border business specialists, they aim to provide everything you need to do business in France, all in one place.


To visit their website CLICK HERE.



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Changes in Password Best Practices

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NIST recently published their four-volume SP800-63-3 Digital Identity Guidelines. Among other things, they make three important suggestions when it comes to passwords:

  1. Stop it with the annoying password complexity rules. They make passwords harder to remember. They increase errors because artificially complex passwords are harder to type in. And they don't help that much. It's better to allow people to use pass phrases.

  2. Stop it with password expiration. That was an old idea for an old way we used computers. Today, don't make people change their passwords unless there's indication of compromise.

  3. Let people use password managers. This is how we deal with all the passwords we need.

These password rules were failed attempts to fix the user. Better we fix the security systems.

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2 public comments
10 days ago
A meeting recently:
Developer Team: Our passwords require special characters, and max out at 30 characters.
Me: Why on EARTH did you do any of that? Why do you have a max?
Devs: Because ... it's hard to remember something long? How long do you want it to be?
Me: ... Get rid of the max. Get rid of the special characters.
CIO: Wait. Why do we have passwords at all? Can we link to google/linkedin/facebook and make it their problem? We are not in the security business.
Devs: Yes!
11 days ago
I’ve been happy watching such sensible guidelines make it through the review process
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22:51 В «Кофемании» обновилось меню

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Spotify Threatened Researchers Who Revealed ‘Pirate’ History

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As one of the members of Sweden’s infamous Piratbyrån (Piracy Bureau), Rasmus Fleischer was also one of early key figures at The Pirate Bay. Over the years he’s been a writer, researcher, debater, and musician, and in 2012 he finished his PhD thesis on “music’s political economy.”

As part of a five-person research team (Pelle Snickars, Patrick Vonderau, Anna Johansson, Rasmus Fleischer, Maria Eriksson) funded by the Swedish Research Council, Fleischer has co-written a book about the history of Spotify.

Titled ‘Spotify Teardown – Inside the Black Box of Streaming Music’, the publication is set to shine light on the history of the now famous music service while revealing quite a few past secrets.

With its release scheduled for 2018, Fleischer has already teased a few interesting nuggets, not least that Spotify’s early beta version used ‘pirate’ MP3 files, some of them sourced from The Pirate Bay.

Fleischer says that following an interview earlier this year with, in which he revealed that Spotify distributed unlicensed music between May 2007 to October 2008, Spotify looked at ways to try and stop his team’s research. However, the ‘pirate’ angle wasn’t the clear target, another facet of the team’s research was.

“Building on the tradition of ‘breaching experiments’ in ethnomethodology, the research group sought to break into the hidden infrastructures of digital music distribution in order to study its underlying norms and structures,” project leader Pelle Snickars previously revealed.

With this goal, the team conducted experiments to see if the system was open to abuse or could be manipulated, as Fleischer now explains.

“For example, some hundreds of robot users were created to study whether the same listening behavior results in different recommendations depending on whether the user was registered as male or female,” he says.

“We have also investigated on a small scale the possibilities of manipulating the system. However, we have not collected any data about real users. Our proposed methods appeared several years ago in our research funding application, which was approved by the Swedish Research Council, which was already noted in 2013.”

Fleischer says that Spotify had been aware of the project for several years but it wasn’t until this year, after he spoke of Spotify’s past as a ‘pirate’ service, that pressure began to mount.

“On May 19, our project manager received a letter from Benjamin Helldén-Hegelund, a lawyer at Spotify. The timing was hardly a coincidence. Spotify demanded that we ‘confirm in writing’ that we had ‘ceased activities contrary to their Terms of Use’,” Fleischer reveals.

A corresponding letter to the Swedish Research Council detailed Spotify’s problems with the project.

“Spotify is particularly concerned about the information that has emerged regarding the research group’s methods in the project. The data indicate that the research team has deliberately taken action that is explicitly in violation of Spotify’s Terms of Use and by means of technical methods they sought to conceal these breaches of conditions,” the letter read.

“The research group has worked, among other things, to artificially increase the number of plays and manipulate Spotify’s services using scripts or other automated processes.

“Spotify assumes that the systematic breach of its conditions has not been known to the Swedish Research Council and is convinced that the Swedish Research Council is convinced that the research undertaken with the support of the Swedish Research Council in all respects meets ethical guidelines and is carried out reasonably and in accordance with applicable law.”

Fleischer admits that part of the research was concerned with the possibility of artificially increasing the number of plays, but he says that was carried out on a small scale without any commercial gain.

“The purpose was simply to test if it is true that Spotify could be manipulated on a larger scale, as claimed by journalists who did similar experiments. It is also true that we ‘sought to hide these crimes’ by using a VPN connection,” he says.

Fleischer says that Spotify’s lawyer blended complaints together, such as correlating terms of service violations with violation of research ethics, while presenting the same as grounds for legal action.

“The argument was quite ridiculous. Nevertheless, the letter could not be interpreted as anything other than an attempt by Spotify to prevent us from pursuing the research project,” he notes.

This week, however, it appears the dispute has reached some kind of conclusion. In a posting on his Copyriot blog (Swedish), Fleischer reveals that the Swedish Research Council informed the researchers that the case has been closed, i.e. they do not agree with Spotify’s claims and won’t withdraw funding.

“It must be acknowledged that Spotify’s threats have taken both time and power from the project. This seems to be the purpose when big companies go after researchers who they perceive as uncomfortable. It may not be possible to stop the research but it can be delayed,” Fleischer says.

“Sure [Spotify] dislikes people being reminded of how the service started as a pirate service. But instead of inviting an open dialogue, lawyers are sent out for the purpose of slowing down researchers.”

Spotify Teardown. Inside the Black Box of Streaming Music is to be published by MIT Press in 2018.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

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90% of Heavy Metal Bands Fronted by Pastors’ Sons

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A new study out of the University of Middle Harrisonburg reveals that the vast majority of heavy and/or death metal bands are fronted by the sons of pastors, frequently of the Mennonite or Baptist persuasion.

“It’s startling, really,” said Professor Schmidt. “I mean we all knew about a pastor’s son or two that went off the deep end, but apparently the phenomenon is a lot more common than any of us could have predicted.”

From Iron Maiden and Judas Priest, to Slayer and Anthrax, pastor’s sons just seem to be attracted to heavy metal music for some reason.

“I was really surprised to discover that everyone in Metallica other than the drummer is a pastor’s son,” said Schmidt. “And Black Sabbath? Well, all those guys were raised in the homes of Anglican vicars.”

The news came as no surprise to Harrisonburg youth pastor Darryl Darrylson, however.

“I’ve seen every single one of Reverend Yoder’s sons come and go through my youth group,” said Darrylson. “They start with us in seventh grade as the perfect little Sunday School student. Then soon it’s an earring and smoking cigarettes behind the parsonage, then they’re wearing fewer and fewer white-collared shirts and more and more tattered black T-shirts and the next thing you know they’re covering Pantera songs and drinking lite beer in the garage.”

The study also revealed that almost all of the raunchiest pop singers are pastors’ daughters.

The post 90% of Heavy Metal Bands Fronted by Pastors’ Sons appeared first on The Daily Bonnet.

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European Commission says it's taking Ireland to court for failing to collect €13B from Apple in back taxes identified in Aug. 2016, says no money has been paid (Sam Shead/Business Insider)

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EU Commissioner Margrethe VestagerEurope's competition chief Margrethe Vestager.AP

The European Commission, the EU's competition watchdog, is taking Ireland to court for failing to collect billions of euros from Apple in back taxes that were deemed to be illegal state aid.

Europe's competition chief Margrethe Vestager ordered Ireland to claw back up to €13 billion (£11.1 billion; $14.5 billion) in back taxes from Apple last August, saying that it must be recovered by January 3.

Vestager said on Wednesday that none of the money has been paid and that she has decided to refer Ireland to the EU Court as a result.

"Ireland has to recover up to 13 billion euros in illegal State aid from Apple. However, more than one year after the Commission adopted this decision, Ireland has still not recovered the money, also not in part," said Vestager in a statement.

She added: "We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But Member States need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision."

Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, the EC said, but it is only planning to conclude this work by March 2018 at the earliest.

Ireland calls the decision "extremely disappointing"

Ireland's government said it was "extremely disappointing" that the Commission has decided to refer the case to court. The Department of Finance said in a statement on its website

"Ireland has never accepted the Commission's analysis in the Apple State Aid Decision.
"However, we have always been clear that the Government is fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and has committed significant resources to ensuring this is achieved.  Ireland fully respects the rule of law in the European Union.
"That is why it is extremely disappointing that the Commission has taken action at this time against Ireland.
"Irish officials and experts have been engaged in intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and have been in constant contact with the European Commission and Apple on all aspects of this process for over a year.
"It is extremely regrettable that the Commission has taken this action, especially in relation to a case with such a large scale recovery amount.  Ireland has made significant progress on this complex issue and is close to the establishment of an escrow fund, in compliance with all relevant Irish constitutional and European Union law.
"The work on the establishment of the escrow fund to deal with the unprecedented recovery amount will continue, notwithstanding the fact that Commission has taken this wholly unnecessary step."

Paying a government €13 billion isn't easy

Vestager described the payback process as "complicated" in an interview with CNBC in January. 

"It's a tricky thing to do because it's a large sum so of course you have to figure out how to do that. It's not as an escrow account in some of the other cases where it might be €25 or €30 million…and therefore I do respect that it's a complicated matter and it may take a little more time."

Tim CookApple CEO Tim Cook.REUTERS/Kevin Lamarque

Apple was due to pay all the money into an escrow account, which is held by a third party, by January 3.

The issue is complicated by the fact that Ireland doesn't actually want Apple to pay the money, since it might discourage other multinationals from setting up shop there. Ireland and Apple have separate appeals pending against the European Commission's findings.

The issue has also divided opinion in Ireland, with opposition MPs suggesting the government should use the windfall to repair the country's economy.

Apple isn't the only US tech giant being ordered to pay more taxes

On Wednesday, Vestager also ordered Amazon to pay €250 million in back taxes to Luxembourg.

"I hope that both decisions are seen as a message that companies must pay their fare shares of taxes as the huge majority of companies do," said Vestager in a press conference on Wednesday. "Our work is by no means done."

Vestager this year also fined Google a record-breaking €2.4 billion (£2.1 billion, $2.7 billion) for promoting its own shopping service over rivals'.

Additional reporting by Shona Ghosh.

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