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La Vie Possible

Someone sent in a really interesting article that appeared on Business Week Online on August 14th titled “La Vie Impossible.” There is no by-line, so unfortunately the writer won’t get his due credit, but nonetheless, it is a topic dear to my entrepreneurial heart and rapidly dwindling pocketbook — how “Paris is encouraging entrepreneurs even as it continues to hinder them.”

The word “entrepreneur” is French, which in English is used to mean “a person who organizes, operates, and assumes the risk for a business venture” (http://dictionary.reference.com/browse/entrepreneur), but in French it refers to a construction “contractor.”

“Risk” is a clue as to why there is no word in French for “entrepreneur.” The French are, particularly when compared to Americans, risk adverse. You may think I am making a broad and bold statement, but I’ve lived here long enough to know the signs of a culture seeking security in place of risk. This generalization, however, doesn’t consider that a record number of 322,000 companies were created in France last year.

How many of those companies were created by immigrants vs native French is unknown, but I’ll bet my bottom dollar that it’s a hefty portion. Entrepreneurs are the people you see on the streets of Paris in August, while the “fonctionnaires” (civil servants) and “travailleurs” (workers) vacation at their country homes or by the seaside. While many of the classic French family-owned bistrots are shut for a few weeks, the Asian restaurants are all open and brimming with business. Visit the bourgeois 16th arrondissement and see if you can find a bakery open this time of year, but head to the multi-national 19th and you won’t even notice it’s August.

If you are of the entrepreneurial spirit, in the English/American sense of the word, then expect France to be your biggest challenge. Philippe Block, co-founder and former chief of Columbus Café, a chain of espresso bars in and around Paris was quoted by Business Week Online to say, “You have to be crazy to be an entrepreneur in France.”

Yes, it’s true that France has been trying to make it easier for the energetic entrepreneur that isn’t capital-rich by changing a few laws and regulations to encourage new business start-ups. It wasn’t long ago that the amount of required capital to get a business license was reduced from almost 10,000€ to 1€! That helps, but it’s still expensive to register the company — almost 1,000€ without the help of an attorney. An attorney will cost you a few thousand more, but wading through the bureaucracy and paperwork alone is no simple task, particularly if you’re not fluent in French.

Opening a commercial bank account requires an appointment to your French bank (with whom you already have a relationship), armed with all your company documents. It’s not enough that it’s time consuming and difficult. To add insult to injury, my French company commercial account costs almost 40€ a month in fees!

Registrations and payments must be made to the long list of government agencies that oversee sales tax, health and retirement benefits — URSSA

F, RAM, ORGANIC, etc., and you’ll be expected to file reports and pay taxes and fees quarterly. An “Expert Comptable” (accountant) is required to oversee your accounting and sign-off on certain reports. Don’t think this isn’t expensive, too!

And if you want to hire employees…now you’re really in trouble! Expect an employee to cost another 50% of his salary in social charges. Be prepared to create a contract with your employee that holds you to “life employment or death” (forgive me, I jest). If you hire someone on a project basis, they must be self-employed (“Travailleur Indépendant”) or you can pay them via the “Chèque Emploi” system. And watch out, the “Inspection du Travail” agency with 2,000 inspectors will report you if your workers are working too long or too hard! Or you may spend a fortune insuring you comply with the 2,732-page “Code du Travail.”

By comparison, you can go online today and within a few minutes have registered an Limited Liability Company in any state for about $200. The papers are emailed to you as pdf files. To obtain an Employer Identification Number (EIN) from the U.S. government, you can now do that online, too, again, within just a few minutes. If you send those documents to your U.S. bank, by email, they will open a commercial account for you free of charge. Need a worker? Find the right person, pay them for their work at the rate you agreed upon and then turn in a “1099” form with your tax return reporting that you paid them more than $600 that year (if you did!). You can also order your business cards and have them shipped overnight, so within 24 hours an American entrepreneur can be up and running and in business.

It is thought that an entrepreneur is an unappreciated and disrespected person in France. Self-made men and women can’t compete in stature to their counterparts who have graduated from the “Grandes Ecoles” and landed good, secure, government positions. So, it’s no wonder that many of the young energetic French have headed for more inviting climates — like London, New York and California…and are thriving successfully.

Meanwhile, here we are, we Americans with our entrepreneurial spirits bursting for expression, filled with good business ideas, but who love all that France stands for: the France that doesn’t put standard of living ahead of quality of life; the France that protects both the workers and the consumers; the France that reveres its contributors to culture (writers, artists, actors, etc.)…so what do we do?

We see the hurdles as challenges to be overcome! And I’ll tell you this — we have a big advantage over our French competition. We have the courage to take the risks, the resourcefulness to maneuver any situation and the optimism to envision success and therefore achieve it.

I know this from first hand and from all the North Americans living here who will happily tell you the same tale and their own personal stories on how they survived and prospered.

To read the Business Week article in its entirety, visit: http://www.businessweek.com/magazine/content/06_33/b3997064.htm

A la prochaine…

Adrian Leeds
Editor, Parler Paris
Email [email protected]

P.S. John Howell, co-sponsor of the Living and Investing in France Conference and author of “Starting a Business in France” published by Cadogan Guides, will be speaking on “Earning a Living and Doing Business in France” during the 2-day conference in San Diego this coming September 16 and 17. Register now as the Sheraton Suites group room rates are guaranteed only until August 25th! Visit /frenchproperty/conference/LIF_SD_2006/LIF_SD_2006_home.html for more information or write Schuyler Hoffman at [email protected]

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