Micro-entrepreneurs benefit from a single, simplified tax system. As a result, jobseekers, salaried employees and pensioners can pursue a self-employed activity, even in addition to their unemployment benefit, salary or retirement pension. There are many professions that can be run as a micro-enterprise. They can be divided into three types of activity: commercial (purchase and sale of goods, provision of accommodation, provision of services), craft (creation, manufacture, handicraft activities) and liberal (consulting, teaching, coaching, etc.). Please note, however, that professions related to law, agriculture, health or real estate VAT cannot use this status. Let's take a closer look at the steps you need to take to get started, and how long it takes to open a micro-business.
Why is the micro-enterprise scheme so successful?
According to URSSAF figures, the number of micro-businesses continues to rise. At the end of 2021, there were 2.229 million of them in France. According to INSEE, 6 out of 10 new businesses created in January 2022 will be micro-businesses, 12.4% will be classic sole proprietorships and 26.7% will be partnerships.
The micro-entrepreneur status has a number of distinctive features:
- Sales ceiling. Depending on the type of activity (commercial, craft or liberal), annual sales may not exceed a certain amount. If sales exceed this limit for two consecutive years, the micro-enterprise automatically becomes a sole proprietorship in the third year.
- Basic VAT exemption. Micro-entrepreneurs are subject to VAT but not liable for it, i.e. they cannot invoice the tax or reclaim it from their purchases.
- Payment of social security charges. Sales declarations are made online, monthly or quarterly, via the URSSAF website, along with payment of social security charges. Social security charges are calculated automatically as a percentage of gross sales. If sales are equal to zero, the declaration must be completed, but no charges will be due. The percentage applied for social security contributions also depends on the type of activity.
- The bank account. There is no legal obligation for a micro-entrepreneur to open a business account. However, for better management of expenses and income, it is advisable to separate business-related operations from personal transactions. A simple, dedicated online account may be just the thing.
- Accounting. Micro-entrepreneurs are under no obligation to produce annual financial statements or keep full accounts. All they are required to do is keep a receipts book, a purchases register and comply with invoicing rules.
How to set up a micro-business
When it comes to setting up a business, the formalities are simple and free of charge. Since January 2023, the one-stop shop managed by INPI (Institut National de la Propriété Industrielle) has enabled all businesses, whatever their size, to complete their formalities very easily. The various CFEs have been abolished in favor of a single point of contact. The one-stop shop centralizes all information concerning all businesses in the country.
The formalities involve filling in a form and submitting supporting documents (identity card, proof of address) online. Some professions are regulated and require proof of a certain level of qualification, such as a diploma. Since the 2019 PACTE law, the installation preparation course has become optional rather than compulsory.
Time to create
Once they have created their personal space on the one-stop-shop website, micro-entrepreneurs can track their progress on their dashboard.
Generally speaking, applications are submitted within 24 hours. If the application is complete, although processing times vary from one CFE to another, it takes around twelve days to obtain a Siren and Siret number. These numbers legally mark the start of business. They must appear on all official documents issued by the micro-business.