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“The New French Auto-Entrepreneur: “”Work More to Earn More”””


They are definitely trying to become a more “entrepreneurial” society…the French. Even though the word is of French origin (“entreprendre,” or “undertake”), one etymology dictionary says “The word first crossed the Channel c.1475, but did not stay.” Somehow in the translation, the term crossed the Atlantic ocean with the immigrants to the United States who seriously took on its meaning, while in contrast, the concept of “Socialism” was born of the French and Industrial Revolutions in England and France in the early 1800s.

The French revolutionaries didn’t see freedom simply as the right to own property, as did the conservatives. They represented the poor who believed freedom was impossible without equality — why should some starve while other grew rich off the labor of others? And so the roots are deep in France that entrepreneurship and capitalism would lead to a lack of freedom. Remember: Liberté, Egalité, Fraternité. Right?

Now, in the year of Sarkozy’s ‘reign’ to change some of the Socialist idea, comes the latest wave of entrepreneurship — the “Auto-Entrepreneur” — the simple and easy creation of an enterprise. Beginning January 2009, any person wishing to start a business within any sphere of activity is going to find it a lot simpler and a lot less expensive.

Of course, it’s designed to benefit SMALL businesses — those that don’t generate sales of more than 80,000€ for some and 32,000€ for others, which doesn’t seem like much to me (can it even support one family of three?), but what’s

most important about the new initiative is that finally, taxes and social security charges WILL NOT BE LEVIED IF THERE ARE NO PROFITS!

I can tell you from personal experience, having created my own French EURL (Entreprise Unipersonnelle à Responsabilité Limitée), similar to an American LLC (Limited Liability Company), that it was an expensive and complicated venture from beginning to end that continues to drain the pockets for taxes and social charges regardless of receipts. It has not been a system that encourages new start-ups, considering the profits necessary to amass even before the revenues are possible…sort of like “putting the cart before the horse.”

So, the time has come for some serious reform to encourage new business, more jobs and a more “capitalistic” viewpoint on the economy. According to all the online documentation, forums and the likes I’ve been able to find, they claim the paperwork has been simplified and the payment of the taxes less complicated.

Is it really possible that France will actually allow a business to get off the ground without expecting tax rewards? And of course, if this is true, then they will effectively reduce the ‘black’ employment market.

From the American perspective, which uses the “1099” reporting system for a freelance worker to report his annual income and for the employer to report their payments to that worker (anything over $600 a year per employee), without the need for an employment contract, official company status, business license (“travailleur indépendant”) or “chèque emploi” (official method of paying for services rendered), the French system is (what I like to call) ‘constipating.’ There’s little ‘movement’ or cash flow between the employers and the employees. In effect, it forces a black market of workers who have no choice but to either work for cash or not work at all, missing valuable benefits (healthcare, retirement, etc.), but making ends meet.

Sarkozy’s government seems to have realized that the huge black market means missed tax revenue, so the need to ensure the government receives its due in taxes is the same need that has prevented the tax revenue. Call it a “Catch 22.” It reminds me of the 35-hour work week. Perhaps it was good in theory as a way to increase jobs, but in practicality, it hasn’t worked. It proved difficult to implement and was considered by some as a “straitjacket” on France’s economy. Others realized it devalued the work ethic. “Work more to earn more” was Sarkozy’s slogan to convince the country that its “renaissance” would be found more on self reliance than on “social solidarity” which created the “world’s shortest official working week and one of Europe’s highest unemployment rates.”

The skeptic in me says “I’ll believe it when I see it,” but the optimist in me says “This gives me hope for a brighter future in France.” It also indicates that perhaps it will be just a little easier, too, for us immigrants without EU passports to make a more legitimate go of it in this beautiful and rich adopted land of ours.

Hurrah for entrepreneurship on both sides of the Atlantic.

For more information, visit http://www.lautoentrepreneur.fr (in French, sorry!).

A la prochaine…

Adrian Leeds
Editor, Parler Paris

 

 

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