Welcome the “Welcome City Lab”

You read about it before the official notice right here in Parler Paris — announcing the city’s new “incubator” focused on “urban tourism.” A couple of weeks ago I participated in a ‘brainstorming session’ with others in the tourism industry to determine a name. And so it was born: Welcome City Lab.

The Lab is scheduled to move into 1,000 square meters of office space in Saint-Germain-des-Prés in order to host 40 start-ups and open its doors to meetings, conferences and workshops.

This is the city’s 10th incubator of its kind, all designed to help entrepreneurs get started. The concept is to provide low rents and free or low-cost professional services to new businesses within the tourism industry. Founding partners include TravelMassive, Cap Digital, Atout France, Aéroport de Paris and Sodexo Prestige. And as part of the program, there is communication with the city of San Francisco to help U.S. startups expand to Europe…and vice-versa.

This is a thrilling idea, if it really will make a difference to the ability for a new idea to be born without getting caught up in the tangled web of French bureaucracy and heavy tax burdens!

In the U.S., starting a new business is so easy it’s almost ridiculous. All you have to do is perform a task, get paid, report your profits at the end of the year on a tax return and you’re in business. You can ‘write off’ any expenses which directly apply to running your new business and it can all be done via your personal tax return. You can do business as a “DBA” (Doing Business As), with a state license (which costs next to nothing) or you can register an LLC or other corporate entity online in about 3 minutes with less than $200. A phone and business card or Web site is about all it takes to do business…if that!

This is not true in France. In order to earn money in any capacity, one must have some sort of registration with the tax authorities. Employees of companies have contracts and get paid much like employees in the U.S. Independent or freelance workers must have “Travailleur Indépendant” status, registered with the government. Businesses must have corporate registration of some kind. Even if paid to perform one simple task (such as housekeepers, gardeners, etc.), one must receive pay in the form of a “chèque emploi” — a check officiating and declaring the social security and taxes which are deducted from the salary.

When I first created my French company (Parler-France EURL), the tax burden was shocking — it was liable for three years of social security tax the first year as the government didn’t want to take the risk that the company would still be active and profitable in three years! That meant having a lot of capital with which to just keep it running, much less invest in it’s future.

A few years ago the “Auto-Entrepreneur” system was created — a simpler and less burdensome way of starting up a small business…as long as the annual gross receipts (not profits) don’t exceed 81,500€ (excluding VAT) for any sort of resale business and 32,600€ (excluding VAT) for activity of services. Those low thresholds, however, won’t take you far!

It’s one thing to have a great idea, but if it takes an ‘act of God’ and a ‘pot of gold’ to realize it, how will it really happen? So, I ask the new Welcome City Lab: What are you going to do to make is EASIER and LESS COSTLY to startup some new fabulous idea in tourism?

My advice to the Welcome City Lab: Recruit a few entrepreneurial capitalist Americans to work on the team to really get the ideas flowing!

Applications for members of the new Welcome City Lab will begin next month via the city’s site and for more information, visit: paris.fr.

A la prochaine…

Adrian Leeds

Editor, Parler Paris & Director of The Adrian Leeds Group, LLC

Respond to Adrian

P.S. If If you’ve dreamed of owning an apartment or home on the sunny Riviera or anywhere in France, mark September 27-29, 2013 on your calendar for the Living and Investing in France Conference — Nice and the Côte d’Azur, being held in Nice, France. You’ll spend three days exploring the glorious Côte d’Azur, with a full day of  presentations by property, legal, financial and lifestyle experts to answer your questions, a property tour with our best agents and a full day tour up and down the coast including Cannes, Nice, Villefranche-sur-Mer, Monaco, Menton and more! More information coming soon…so for more information and to join the mailing list to receive updated information, email: [email protected]