Contracting in France
Introduction
France is a country in Western Europe bordered by Belgium, Luxembourg, Germany, Switzerland, Monaco, Italy, Andorra and Spain. It also has close ties to the United Kingdom being separated only by the English channel. In addition to mainland France it also has several overseas territories. French is one of the most widely spoken languages in the world.
France has been a major European power since the middle ages. During the renaissance saw France dominate in culture and become the second largest global colonial empire in the world. In the seventeenth century France went on to dominate Europe in terms of culture, politics and military. When France overthrew their monarchy in the late eighteenth century they established one of the world’s most modern republics introducing declaration of the rights of man and of the citizen which is still followed to this day.
Frances close proximity to so many countries means that it has had a share in many wars that have shaped Europe. France is considered a great power in global affairs and is one of the five permanent members of the United Nations Security Council. It is also leading member of the European Union and Eurozone as well is being a member of the Group of 7, North Atlantic Treaty Organisation, Organisation for Economic Co-operation and Development, the World Trade Organisation and La Francophone.
France is the world’s seven largest economy by GDP. This is no surprise as its reputation for culture, being a centre for art, science and philosophy makes it the number one tourist destination in the world having the world’s fifth largest number of world heritage sites. The Paris stock exchange has been around since 1724. As well as being a modern industrialized nation and large importer and exporter of manufactured goods France is also the third largest recipient of foreign direct investment among OECD countries.
France is a developed country that always performs well in education, health care, life expectancy and human development. It close proximity to the rest of Western Europe and its strong economy when combined with its cultural appear make it a popular destination with freelancers and self-employed contractors. Chesterfield have experience with a number of worldwide destinations for freelancers and are happy to advise and assist with contracting solutions if you are considering relocating or taking a temporary contract in France.
Registry/Registration
If you are an EU citizen and have lived in France for five years or more then you are entitled to a permanent residence permit which is valid for up to ten years and renewable.
In the meantime France has several types of temporary residency permits which are generally valid for a maximum of one year, but are also renewable, such as:-
- Visitor. For a spouse or minor of someone who has been working in France for Eighteen months. Visitors are not able to work on these permits.
- Student. This is for non EU/EEA/Swiss citizens. Students can work freely without restriction.
- Employee. To obtain this permit you must obtain a work permit.
- Self-employed. You must obtain authorisation to exercise such an activity in France.
- Trader. You must obtain authorisation to exercise such an activity in France.
- Scientific. You require a certificate from a research institution or from a university, but this then allows you to regular entry.
- Private or family purposes. This is if you have a child or spouse with residency.
If you wish to become a freelancer or self-employed in France then you normally need a job offer from a French company. Since 2009 though, France has also had a profession liberale visa which allows freelancing in France without being tied to a day job or married to a local. Surprisingly not a lot of information is available regarding this online on their consulate sites even though it pretty much replaces the skills and talent visa. Once you are aware of it though providing you meet the requirements it allows much more flexibility.
In order to apply for a profession liberale visa you need the following:-
- Proof that you have a professional goal. This is easiest if you can evidence past, present and future professional contacts.
- Diplomas/certificates to ascertain your level of education and experience.
- Proof that you can financially support yourself.
- Proof of accommodation in France.
- Medical insurance.
- Clean criminal record.
Depending on which set-up you choose for working in France you may also need to register your business. One option for this is the micro-enterprises taxation system which allows for less tax and accounting requirements, but in this case your annual earnings cannot exceed €33,200.
Therefore neither residency nor work permits are straightforward in France due to the abundance of choices and the inevitable language gaps. For those who are not experienced with the flamboyant world of international freelancing or if you are just unfamiliar with the French system it is recommended that you engage with a professional firm such as Chesterfield to discuss the different options and set-up recommendations before you start any process to avoid unnecessary complications.
Income Tax
If you live in France for at least six months of the year then you should pay income tax on your worldwide income, if you stay there for less than six months you only pay on the income that you have earned in France. Non-residents tax on French sourced income is 20% for earnings up to €27,519 and 30% thereafter. If you are resident then please see the below table although it should be noted that expenses can be deductible and therefore a complete record of these should be kept and tax advice from a professional firm such as ourselves should be sought to ensure that you are not paying more than you should. It is also sometimes more efficient to declare income at regular intervals as opposed to annually to keep on top of matters and avoid a hefty tax liability.
0 – €10,064 – 0%
€10,064 – €25,659 – 11%
€25,659 – €73,369 – 30%
€73,369 – €157,806 – 41%
€157,806 + – 45%
Social Security
Even if you are self-employed you must register for social security in France, this enables you to be covered by a basic scheme covering health, family allowances and pensions, but not unemployment or sick pay, although if this is a concern you can take out supplementary cover for this. If your total earnings are below a certain amount then it is possible to negate your social security contributions altogether. Otherwise contributions are usually due twice a year on the 1st April and the 1st October. The French Social Security System is very complicated and firstly you will need to assess which fund you belong to depending on your type of work. This is then further broken down including certain exemptions and by the different funds that are paid into.
Therefore it is not possible to cover an amount in this article, but if you would like further information regarding this topic before considering re-locating to France for contracting work then we are more than happy to discuss your line of work and anticipated re-numeration along with any payroll solutions we offer and exemptions you may be entitled to, with you to give you a better idea of how much you will be expected to pay.
Employment Rules
French labour code covers independent contractors and states that their working conditions are defined exclusively by themselves or in a contract with the customer. Therefore as an independent contractor you have a lot more flexibility than a normal employee and any disputes with a customer would be very hard to substantiate unless expressly referred to in a contract. As such the control that you can exhibit with regards to such matters as working hours, duties, place of work and pay are extensive. Specific protection for independent contractors and freelancers are not necessarily covered by employment law, but usually commercial law, this is because they are viewed as having a services agreement as opposed to an employment contract. This does not mean that they are not afforded protection, just that it differs to the protection afforded to an employee.
When negotiating your contract it should be noted that France is the most generous country when it comes to annual leave with the average employee expecting thirty days a year, after all what it the point in living in a country with the options of snow-capped alps, sun filled vineyards, not to mentioned the cultural appeal of Paris alone unless you put aside the time to enjoy it.
Banks
France is one of the biggest financial markets in Europe and therefore it is no surprise that there are a large number of internationally recognised reputable banks there, the oldest of which was founded in 1848. Due to its international appeal French banks also cater to expats and non-residents. The Bank of France regulates its banking sector through the French Prudential Supervision and Resolution Authority. The currency in France is the euro. If your French is not up to par then you may need to go with a big name multinational bank that can be found in many of the major cities, as they are more likely to have English speaking staff and the regional banks may not be able to offer the same services that are tailored specifically to benefit expats. Opening a bank account is fairly standard with the rest of Europe and in certain cases can be done online before you relocate to France. It should be noted that there is a law in France that limits cash purchases to €1,000 to clamp down on untaxed transactions and therefore a banking solution is of absolute necessity.
Borderless accounts are now also on the rise and so are also an option. The appeal is that being online your physical location is not such a significant factor. It also allows transfers at favourable exchange rates albeit subject to charges. If opening a French bank account is a little daunting for a short term contract then Chesterfield is more than happy to discuss your banking requirements and see what banking or payroll solutions would best suit your needs.
Corporate Structures
As you can see with France there is a lot to take into account in order to get the correct structure for contracting as their system is such that slight differences can mean big changes for you. For instance their micro-enterprises option which allows for less taxes and accounting requirements, the fact that as a freelancer of self-employed contractor your expenses can be taken into account to reduce tax liabilities and also the fact that depending on your contract it differs as to whether you are covered by employment law or commercial law.
This can on the surface appear somewhat daunting, but in fact when structured correctly it works in your favour. Here at Chesterfield we offer French self-employed services and French employed payroll services and can offer assistance as to the correct way to set up your contract and deal with any tax liabilities. We also provide a French accountant who can prepare and submit self-employed tax returns on your behalf. If required we can also offer establishment of your own company and can tailor the invoicing to your particular needs.
Chesterfield and Contracting in France
France is a dream destination for a lot of people around the world and with so much to offer as a country going there for just a vacation will not allow you to fully experience everything that it has to offer. Although uprooting your entire life to work without security may seem to be an overwhelming thought it is easier than you might think. Quality high-speed internet has opened up a whole new professional world and global freelancing is on the increase.
Chesterfield have years of experience in this field working with a variety of countries with a range of schemes and solutions in order to make life easier. Our dedicated staff can handle all of the headaches for you allowing you to kick back and enjoy what France has to offer.
