Conditions for access to sole trader status clarified

Since its creation in 2022, the new status of sole proprietorship has revolutionized the way entrepreneurs think about their assets. From now on, as soon as they launch their business, they will have separate personal and professional assets. This novelty offers unprecedented protection: only business assets can be seized to pay debts relating to the business activity. But what about foreign nationals working in France? Do they also benefit from these advantages? The Immigration Act of January 26, 2024 specifies the conditions of access.

The new status of sole trader

As of February 15, 2022, it is no longer possible to set up a sole proprietorship with limited liability (EIRL). Effective from May 15, 2022, the new unique status of sole proprietor takes over the main advantages of the EIRL, namely :

  • protection of personal assets (by default unseizable by professional creditors),
  • simplification of formalities and operation of the status (all formalities provided for in the one-stop shop available since June 30, 2023),
  • the possibility of choosing between two tax options (default income tax as BNC, BIC or BA, depending on the activity carried out, or corporate income tax for sole proprietorships subject to an actual tax regime).

Conditions of access to sole trader status: what the "Immigration" law provides for

Prior to the Immigration Act of January 26, 2024, people from non-EU countries were not required to present a valid residence permit in order to qualify as a sole trader. However, since it came into force, this condition has been laid down in Article L526-22 of the French Commercial Code, a legislative revision that establishes a general requirement of regularity of residence for all entrepreneurs.

In other words, the "Immigration" law specifies that foreign nationals from non-EU countries, the European Economic Area or the Swiss Confederation are not eligible for individual entrepreneur status without a legal residence permit. On the other hand, nationals of EU member states, Iceland, Norway, Lichtenstein and Switzerland are eligible without restriction, with the exception of those linked to the activity in question (holding a license for goods transport, for example).

This condition of legal residence on French soil reflects the government's determination not to facilitate access to the status of individual entrepreneur. The status, which can be combined with the simplifiedauto-entrepreneur scheme, must not, in the government's view, be a " factor in making the country more attractive to illegal immigrants ", and contribute to "the fight against high levels of insecurity and even exploitation of this particularly vulnerable workforce".

The restrictions are particularly aimed at illegal self-employed tradespeople and artisans, including those working on collaborative delivery driver platforms, who sometimes sublet their user accounts to third parties who are themselves illegal.