Auto-Entrepreneur: Getting the Related Immigration Status

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auto-entrepreneurQUESTION:

Over a year ago I signed on for the new status of auto-entrepreneur. Even though I was already self-employed, I wanted to benefit from the preferential tax treatment. As an American in France, I need to renew my carte de séjour every year. Since I have not changed the nature of my activity (English teacher), I thought there would be no problem. Was I wrong! My carte de séjour expired over six months ago and I have a meeting at the préfecture at the end of the month in the office handling the business carte de séjour, and the documents required are all for that kind of card. I cannot comply with their demands. Last time I was there, they kept saying that auto-entrepreneur is a business status and I will lose my residency if I do not comply. How is this situation possible?

ANSWER:

I am not sure I can explain how the préfecture ended up making such an erroneous interpretation of the law. Nor can I figure out why your past status was not taken into consideration when it was time for renewal. But I can tell you there is a reason for tightening the requirements for issuing a professional (profession libérale) carte de séjour, which explains at least the initial reaction, if not the change of office and the kind of documents you are being asked to show.

Auto-entrepreneur has been such a popular status that a lot of people are taking advantage of it, some of them for the right reasons, but others as a sometimes desperate attempt to get out of a failing situation. I have mentioned in a previous issue that the majority of new businesses created this way have involved unemployed people who are running out of ideas as well as money and are desperate to get a new job. As long as these people do not hold a carte de séjour, I tend to look at their endeavor favorably, since I have an American way of looking at this. Taking initiative and moving forward when unemployed is always a good thing, and for sure a better thing to do than waiting, hoping for something to happen.

Once there is a carte de séjour issue, however, I become a lot more skeptical, because aside from the difficulties of running any type of business in France, the préfecture will insist that the new business become successful quickly to be a good enough reason to grant the right to stay and work in France. The préfecture, which is always very suspicious by nature, looks at the huge increase in the number of requests as a systematic attempt to defraud the system unless proven otherwise.

Now, how do you prove that you have created a legitimate business that is going to be successful? Using the legal definition of proof, that is just plain impossible: there is no way to guarantee that something like this will happen, no matter how certain it appears.

Here is the advice I give people signing up for this status. It is related to the creation of a business. I would like to go through it since some of these tips may be pertinent to you.

1 – Check to see if there is a better immigration status you can either keep or obtain. I am thinking of employee status and student status, in particular.

2 – Write down a pretty decent business plan for the next two years or so. The prefecture does not require it for profession libérale status but it sure helps you in managing your business and it shows a professional approach, which could impress the authorities.

3 – Focus even more on the cash flow issue. One of the best features of auto-entrepreneur status is that, just like in the USA, the taxes you pay are based on the actual performance of your business. Still, even having to pay a small increment for three months (if you choose to pay quarterly) can be a significant burden if it is not properly planned for. Even more important is that the monthly payment is defined by a schedule valid for ten months. Such a rigid setup might not be a good solution. The French system has been pushing for people to accept this regime of fixed monthly payments for just about everything, including taxes and social charges. This is only possible if your business plan is excellent and you have full control over your cash flow.

4 – Keep careful enough track of your income that you can see well in advance when you will go over the limit of €32,000 in sales for a given calendar year. This is essential, since the tax office backtracks to January 1 of that year to calculate your tax burden, TVA included, regardless of when during the year you exceed the limit. If your billing exceeds €20,000 in the first half, for instance, you might be better off switching to another fiscal status then, at least as far as your personal accounting is concerned, since it will be obvious by then that you will exceed the limit before the end of the year. If possible, you might want to change your fiscal status officially, as well, since that would resolve several potential problems linked to what would then be cheating on your taxes if you declare too late.

Now, my explanation of your situation, which is purely based on the impression I get from what you describe, is that the first civil servant to handle your request saw you as a cheater who was taking advantage of a preferential tax status that this person thought you did not deserve. Such a decision could also have been triggered if you committed some transgression in the past, in the eyes of the préfecture; even if you got away with it at the time, a record of it would stay in your file, and could cause the decision to apply the law in the strictest way possible. Since auto-entrepreneur covers all the three possible types of self-employment status and the other two (merchant and craftsman) are dealt with by another office, you were sent to this office with the assumption that there was a good chance that you belonged there. YES, this is 100% bad faith, but once you alienate a civil servant in France, you get punished, with very little recourse for the most part. How can a civil servant be blamed for applying the law? There is no obligation to use common sense or to apply the preferential treatment that North Americans often get.

My guess is that you will not lose the right to live and work in France. Very likely, you will be issued three-month temporary cards, called récépissés de demande de carte de séjour, until you decide to give up auto-entrepreneur status and ask for a change to the standard professional self-employed status, or until they are convinced that you are running a legitimate business and that you are a law-abiding professional, or until you give up entirely and, being totally disgusted, move back to the USA.

The lesson from this very unpleasant incident is that one should always know what is happening. It is especially important to find out if there is a hidden agenda with the préfecture.

YES, you can get your rights back if you file a court case – knowing that the first hearing will occur about two years later and the procedure itself can be pretty long, which means putting your life in France on hold for several years. The alternative is to bend in the direction the préfecture wants you to go. The reality is that it is not as bad as it first sounds. In this case, the préfecture is right to be suspicious of all the requests for immigration status based on auto-entrepreneur status. If you cannot convince the prefecture that your request is legitimate, then move on to the next step. Since that is probably all that is required for you to get back in good standing, I consider it not to be much of an imposition. Now, if you choose to wave your American passport and state that you have rights and that the American Constitution grants you freedom of choice as long as the law permits it, then you might not be suited for living in France – but that is a different topic

> Auto Entrepreneur’s official website

10 comments

  1. Natalia

    Can I exercise ‘une profession libérale’ or become an ‘Auto-entrepreneur’ while being on a 4-year visa as ‘conjointe’ of Talent visa, which includes the authorisation to work? I can’t find information specific to that any where online. Thank you in advance.

    Reply
    • taquet

      Yes you can, without any limitation.
      The VPF (vie Privée & Familiale) status grants all the rights to work without having to ask for them.

      Reply
  2. Tod lappier

    Bonjour ,

    I’m wondering if i have the right to pretend for an auto entrepreneur profil with a : ”passeport talent: chercheur” immigration statut, without having to change my statut. I’m welling to exerce an e-commerce activity in my free time.

    Merci taquet.

    Reply
  3. Michelle

    Bonjour Monsieur Taquet,

    I am on a student visa, and will be teaching english on the side. My student visa states “authorize travail limits 60% duress legal”. I have been offered a teaching gig 1 day a week for 3 hours.

    My visa is to be re-newed in a couple of months. My employer has strongly recommending I change status at renewal from Student visa to auto-entrepreneur so I may bill her with invoice as all her other staff do. And therefore can do the same if I take on more teaching work.

    Everything I have read suggests to go another route i.e stick with Student Visa,
    as auto-entrepreneur should be last resort. What are your thoughts or recommendations?
    Look forward to your reply, Michelle.

    Reply
    • jean taquet

      YOU
      I am on a student visa, and will be teaching english on the side. My student visa states “authorize travail limits 60% duress legal”.
      ME
      This is 100% true and I would like to add 2 things that are here critical:
      1 – teaching in front of classroom is by legal definition an employee position. Therefore regardless of what the arrangement is between the parties, should the French administration conducts an audit, it would automatically be changed into this legal relationship.
      2 – the student titre de séjour “authorize travail limits 60% duress legal”, is absolutely true and it is strictly for an employee position.

      YOU
      My visa is to be re-newed in a couple of months
      ME
      I can only assume that you continue to be a full-time student and therefore want to renew the student titre de séjour.

      YOU
      My employer has strongly recommending I change status at renewal from Student visa to auto-entrepreneur so I may bill her with invoice as all her other staff do
      ME
      As explained above, both you and the employer would do something illegal. Should the school be caught, it would cost them a huge amount of taxes as they would charge back taxes with penalties and interests. You would invoice which means that you must pay your own social charges which is not the case with the employee position. Therefore unless your billing is a LOT! more than your employee salary, you will earn less and your employer would more money from your work. Trying to obtain a carte de séjour with the legal status of Profession libérale, and the fiscal status of auto-entrepreneur is very difficult. Should you wish to make a career as an independent teacher then you are MUCH! better of choosing the Profession libérale classic micro BNC fiscal status, the carte de séjour is much easier to get and the chances of being busted by the French administration close to zero.
      In short the means all the benefits for her and none for you!
      The worst of all of this is after the audit, you are declared an employee but you cannot get a carte de séjour “salarié” because there is way too many English teachers in France and British people do not need an immigration status.

      YOU
      And therefore can do the same if I take on more teaching work
      ME
      Even though the legal analysis is much more complex than this, you should keep this basic rule in mind. If you have “one client” you are not independent you are in effect an employee. This reinforces even more what I said at the beginning, aside the fact that teachers in a classroom are always an employee. Should you be a true independent teacher, you would go to students’ home for private lessons, you would go to people’s work place to give personal or group lessons, you would create different curriculums, different billing prices. With that profile, you have nothing to fear, you are truly an independent teacher.

      YOU
      Everything I have read suggests to go another route i.e stick with Student Visa,
      ME
      If there is a true choice between the 2 YES and I repeat YES!!

      YOU
      as auto-entrepreneur should be last resort. What are your thoughts or recommendations?
      ME
      I would like to elaborate here by trying to give you a true big picture of what your choices are.

      1 – YOU ARE STAYING A STUDENT BECAUSE THIS IS YOUR PROJECT AND YOU ARE NOT DONE
      You must stay an employee. You can find reaching positions as an employee, private tutoring that be done with the Chèque Emploi Service which gives you the employee status, and should you get consulting jobs as an independent then the portage salarial still makes you an employee. So there is a solution for all possible scenarios to keep you an employee.

      2 – YOU RE NOW CONTEMPLATING CHANGING YOUR IMMIGRATION STATUS SOONER THAN LATER BUT YOU HAVE TIME
      Then you have a very broad choice
      There are 5 mentions/categories of cartes de séjour – i.e., immigration statuses
      visiteur
      salarié
      étudiant
      vie privée et familiale
      commerçant et artisan
      Passeport talent.

      Each of them have several sub-categories. For example the last one has 10 fully defined, private life has more about 20, visiteur includes self-employed consultant type of business. and so on.

      I am adding this because you need to have the right to work in France right away either having all 3
      employee
      self-employed (profession libérale, artisan, commerçant)
      running a corporation

      Since you have about a year, you are better off starting by defining your project with possibly a Plan A and then B if needed. Then and only then would you look at which carte de séjour with which sub-category would better fit your plans.

      3 – YOU NEED TO CHANGE NOW YOUR STATUS
      Then the most efficient considering you need to teach English to make a living would be to ask for the Profession libérale classic micro BNC fiscal status. It is the way to go in this situation.

      Reply
  4. Emily

    Hello,

    I am an American photographer and writer living in rural France with a visitor carte du sejour, second year. My longterm project is producing a book on a subject specific to my region. I have received two letters of recommendation from departmental officials for this project.

    Separately,I have just rented an atelier in which I will work myself and with craftspeople to handmake items. I expect this to be a viable business by its second year.

    My question is – what documentation steps do I take in what order? Do I return to the USA to get some other kind of visa – profession liberale, or talents et competences? Do I get my Auto Entrepreneur license first?

    I don’t want to upset any officials, thus making any forward progress impossible.

    Thanks in advance for any advice or suggestions.

    Emily

    Reply
    • TAQUET

      I believe that I need to review your situation before I can answer properly your questions as I am not sure that you have a complete understanding of your current situation in France.

      YOU
      I am an American photographer and writer living in rural France with a visitor carte du sejour, second year. My longterm project is producing a book on a subject specific to my region. I have received two letters of recommendation from departmental officials for this project.
      ME
      As a Carte de Séjour holder you are an immigrant of France and therefore have a right for a permanent stay in France provided that you comply with the said requirements of being an immigrant holding a ” visitor carte du sejour”
      Since you received letters of interest about your activity in France, it might be time to think of changing within your current prefecture the legal nature of your carte de séjour.
      Based on your project short and long term there could be several cartes du séjour fitting your needs. I would need to know a lot more in order to fine tune this.

      YOU
      Separately,I have just rented an atelier in which I will work myself and with craftspeople to handmake items. I expect this to be a viable business by its second year.
      ME
      This means that you rented as a private individual this space and I assume that you have the right to sublet the place to other people.

      YOU
      My question is – what documentation steps do I take in what order? Do I return to the USA to get some other kind of visa – profession liberale, or talents et competences? Do I get my Auto Entrepreneur license first?
      ME
      For now and the foreseeable future that I can see the Auto Entrepreneur fiscal status is THE WORST one to obtain a carte de séjour mention profession libérale. Should you be a “commerçant” or an “artisan” my answer would be different. This is why it is so important to precisely define all the various aspects of your project.
      1 – Auto Entrepreneur
      Also it is illegal and you would lose RIGHT AWAY your carte de séjour if you register for this Auto Entrepreneur fiscal status with your current immigration status. So do not consider this move for now and until you have address all the other issues first. Once you know which carte de séjour you will be getting you will know which business set-up is best for you.

      2 – talents et competences which was called Competences et talents which no longer exists and has been replaced by “passeport talent”
      I get the feeling that we should look into this as you might be able to qualify for it but keep in mind that there are now 10 sub-categories and your file must fit exactly the said requirements for the one you chose. It is impossible to send the file and ask them to figure out which one of them would get the best one

      Reply
  5. Chelsea

    Hi,

    I have a question regarding the auto entrepreneur status. I set myself up under this scheme several months ago in order to work for a language company in Paris. I have since decided to apply to DRTEFP myself so that I can work in businesses without going through a third party company. My question however is, am I able to employ other ‘auto entrepreneurs’ to work for me? I know there are thresholds but in theory is it possible?
    Thanks,

    Chelsea

    Reply
  6. taquet

    Dear Ms. Gerber,

    Thank you for your message and congratulations for getting this difficult status from the prefecture. At least this is what I understand from your message.

    This said, I have the strong impression that you either did not understand what the prefecture is asking when you are thinking of becoming AE, or your project did pass at the prefecture but you do not fully understand what C & T status is exactly.

    The way I define this C & T immigration status is
    1 – A foreigner who has a “lifelong” personal and professional project that is anchored in France. So right there 2 critical things
    that size project
    the project is in France

    2 – This project offers a lot of benefits to the community and its people and has been endorsed by significant people in France – the endorsement can be done in several different ways.
    there 2 critical things
    local – French – benefits
    strong endorsements

    3 – This project improves the ties/relationship between the 2 countries.

    Therefore I believe that what the prefecture is asking you needs to fit in there.
    YOU
    I have applied to change my carte de sejour status from visitor to Competences & Talents. The Prefecture informed me that a favourable decision has been made but that they need a “entreprise projet statut”.
    ME
    Inside the professional side, there is a need to prove that this project can earn money and therefore can support you living in France.
    I have no idea what you wrote in the cover letter so based on what I see on your site, this is what I would put forward as “un projet d’entreprise”
    Workshop & Residency
    a – individual courses painting & drawing
    individual rate = x€/h
    group rate = x€/course
    school year weekly courses rate x€

    b – WE immersion of French artists
    x€ without the cost of lodging

    c – foreign artists for residency
    per day = x€
    per week = x€
    per month = x€

    and the classes are charged
    per day = x€
    per week = x€
    per month = x€

    ARTISTE FRANÇAIS EN RESIDENCES AU CANADA
    detail your services and how much you charge

    In short, this is what I believe that the prefecture has in mind.

    YOU
    I am assuming a visit to the chambre if commerce to register for a micro entreprise, but my recepisse just states that I am renuwing my carte de sejour. So a bit of a catch 22. Any help will be appreciated!
    ME
    If by some miracle you register as an AE, you very likely lose all your chances of obtaining this status because no one gave you the right to start working.

    Reply
  7. Wietzie Gerber

    Bonjour,

    I have applied to change my carte de sejour status from visitor to Competences & Talents. The Prefecture informed me that a favourable decision has been made but that they need a “entreprise projet statut”. I am assuming a visit to the chambre if commerce to register for a micro entreprise, but my recepisse just states that I am renuwing my carte de sejour. So a bit of a catch 22. Any help will be appreciated!

    Reply

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