
Show HN: How to start a business in France - maelito
Hacker News loves talking about the state of startups in France [1], and the particularities of our social security system [2].<p>There is no official answer in English on the Web to the question &quot;how to start a company in France&quot;, so we&#x27;ve built a website to guide you through it with as little headache as possible.<p><a href="https:&#x2F;&#x2F;mycompanyinfrance.fr" rel="nofollow">https:&#x2F;&#x2F;mycompanyinfrance.fr</a><p>It&#x27;s open-source software [3] built inside the French public startup incubator, beta.gouv.fr.<p>For those interested : does it convey most of the information you need ? What&#x27;s missing ? It&#x27;s the first iteration, and we&#x27;re planning many new features.<p>[1]: Startup nation ? <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=18066248" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=18066248</a><p>[2]: The French healtcare and pay as you go pension systems are also regularly discussed e.g. <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=12998163" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=12998163</a><p>[3]: Source: <a href="https:&#x2F;&#x2F;github.com&#x2F;betagouv&#x2F;syso&#x2F;" rel="nofollow">https:&#x2F;&#x2F;github.com&#x2F;betagouv&#x2F;syso&#x2F;</a>
======
nerbert
France is a fantastic country to start a company: very little things to pay
until you actually make a profit, company creation process is easy,
consequences for failure are very low to inexistant if you’re a startup. And
the state is there to help you get all kind of loans by offering guarantees to
the banks for you.

~~~
saiya-jin
Firing people is ridiculously hard in France. I would say quite an important
point in case startup experiences anything else but ideal logarithmic growth,
actually even in that case (realizing somebody wasn't a great hire after trial
period)

~~~
Majestic121
You can fire at will for the first 4 month, renewable once, so practically 8
month, for IT people.

It's plenty of time to determine whether someone is fit for a job or not.

~~~
ramkam
Short sighted / Incomplete. The odds are you'll be a service co, hence, "high"
salaries. There will be up and downs in your sales, and you will find yourself
in a cash crunch at some point - especially when you are "small" with just few
projects at a time - and you will have to fire. If you do that by the book,
you wont be allowed to hire for 2 years. It just makes it incredibly hard to
manage, hence, the reluctance to hire quickly, and ... the thrive of
consulting services (often more than 50% of the dev team are consultants ...
;-) ). It's a mess, for everyone.

------
euph0ria
Would be great to understand more about accounting requirements, recurring
filings, costs of preparing and filing these and the business tax system in
general. Also, are there any other demanding/taxis laws for a company with
let's say 4 employees. What about sick leave, what about parental leave? What
about if the first hire is underperforming, can you easily get rid of that
person etc (important in startups with a handful of employees)?

At least in my case, I would want some information regarding that so I could
decide if incorporating in France is a good idea, compared to let's say
Estonia or the US.

------
pjc50
I'm slightly surprised to see that not only is this in English but there isn't
even an obvious option to switch it to French. That's pretty un-French in the
first place.

It's interesting to read the SARL process and compare it with the UK one:
[https://www.gov.uk/limited-company-formation](https://www.gov.uk/limited-
company-formation)

In the UK, not only is a company bank account not a prerequisite, it's the
other way round - you form the company first. There's no requirement to notify
a newspaper. There's no minimum capital requirement. The minimum filing
requirements are pretty light.

The more I think about social security requirements, the more I think they
should just be paid out of general taxation and not entangled with a
particular relationship of "employment".

~~~
etiennemarcel
> The more I think about social security requirements, the more I think they
> should just be paid out of general taxation and not entangled with a
> particular relationship of "employment".

In France they are too, with the CSG and CRDS.

~~~
daxat_staglatz
Interestingly (?), courts disagree about the legal nature of the CSG/CRDS (see
[0] for some information):

\- According to the Cour de Cassation, it is both a tax and a social
contribution \- According to the Conseil Constitutionnel, it is a tax \-
According to the Conseil d'Etat and the EUCJ, it is a social contribution

[0]
[https://fr.wikipedia.org/wiki/Contribution_sociale_g%C3%A9n%...](https://fr.wikipedia.org/wiki/Contribution_sociale_g%C3%A9n%C3%A9ralis%C3%A9e#Nature_de_la_contribution)

Slightly off topic but for foreigners who are interested, the welfare state
(called Social Security, the word thus a much broader sense than in the US
context) in France has been created as a separate entity from the Government.

It is managed by workers' representatives and employers' representatives.
Since, in the end, it is the Governement (the Parliament, to be exact) that
make laws, including those related to the Social Security, it has as much
power over this sytem as it wants.

Nonetheless, this leads France to have technically two different budgets - the
Government one and the Social Security one - with their own bills and two
systems of taxation - social contributions, which go to the Social Security
budget; and taxes, which go to the Government budget.

OVertime, social contributions - which are computed on labor income - have
been cut, especially for low wage earners. The shortfall in financing has been
partly compensated by transferring tax revenues to the Social Security.

This leads to weird public accounting and public debate: for instance, there
is much talk about the Social Security deficit or even specific branches of
the Social Security (since they are all financed by their social
contribution), missing the fact that it reflects completely arbitrary ways to
earmarked specific taxes to different part of the Government.

Another example of weirdness in the public debate because of this is the
enormous importance of the "income tax" in the public debate, and especially
that few households pay it and most of the money comes from a minority of
household ... but the "income tax" actually brings _less_ money than the CSG,
which is a tax on income that is different thatn "the income tax" (impôt sur
le revenu). Because of the names and the arbitrary accounting practices, the
vast majority of income taxation is completely out of the public debate radar.

------
nodefourtytwo
This is amazing. I wish such site was available in french when I created my
company, you should consider it.

~~~
maelito
Thanks ! That's our next step. Looking for a way to translate it in a
collaborative Web interface.

------
jypepin
Looking at the cost of hiring, it's crazy to see that the employee only gets
~50% (or even less as the salary grows) than what the employer pays.

This makes it very expensive for an employer to pay their employees well, and
explains very well why salaries are so low in France.

Something else to note is also employment laws, which are way more strict in
France and makes it either extremely expansive or just impossible to fire
someone, the cost of hiring seems to be way too high for startups, which are
business why high risks already.

~~~
realusername
That's because in France you get indirect salary as well whereas in other
countries you have to pay some of those things from the indirect salary from
your own pocket. To compare to a US salary, I would personally add 30 to 40%
to those raw figures to reflect external costs.

> Something else to note is also employment laws, which are way more strict in
> France and makes it either extremely expansive or just impossible to fire
> someone, the cost of hiring seems to be way too high for startups, which are
> business why high risks already.

No it's not, first there's the trial period for permanent employees where you
can fire at will and then once it's over, you can still do it but you need to
motivate your decision & respect the process.

~~~
saiya-jin
There is no concept of indirect salary I am aware of. Do you mean that medical
insurance is paid straight out of your salary to the state? This is a huge
benefit to US, but only US - all european countries apart from Switzerland
have this, and many other palces around the world too.

Or you mean social insurance? Same story, you pay it from the money your
employer pays you, its just that you don't do it by yourself - company ha to
do it for you by law.

~~~
realusername
They also created a calculator if you speak French:
[https://embauche.beta.gouv.fr/](https://embauche.beta.gouv.fr/). So the
employer also pays the retirement, health insurance, unemployment benefits,
work accidents and family benefits.

~~~
saiya-jin
It's a big fat lie that employer pays anything - employee pays it all, from
money employer is willing to pay him/her for work done. No matter how we wrap
the facts, this won't change. It doesn't matter that its taken away before it
reaches your account.

I understand the motivation - people would be properly pissed off if they
realized state is taking 50-70% of their income prior to letting them get the
rest. And then they are taxed more with VAT, housing, fuel etc. Of course
there are services given back, in some cases very substantial and helpful (and
in some cases very wasteful and useless), but never forget the fact that you
pay for it with most of your income, like it or not.

------
tripue
Very cool ! Seeing the french gov having a post on hn is amazing !

------
DreamyCori
Before considering creating a company in France, check the position of this
country in the 'Employment flexibility index 2018' [1]. France has the worst
ranking...

Before doing this kind of marketing, do the essential updates first and
companies will blossom all over the country.

[1]: [https://en.llri.lt/wp-content/uploads/2017/12/Employment-
Fle...](https://en.llri.lt/wp-content/uploads/2017/12/Employment-Flexibility-
Index-2018_-LFMI.pdf)

~~~
jlengrand
Maybe the author doesn't have the power to do said updates :). Does a low
flexibility index indicate that companies should not be opened in France, or
even considered? Your point is totally valid, however I don't see how it
invalidates what OP worked on

~~~
DreamyCori
Reality always comes back to snag you out of delusion. And reality is that
France is not attractive. Without core modifications this kind of initiative
will be close to useless.

(I'm one of many french engineers who left France to have a decent career)

~~~
jlengrand
Same here. I left because France is not attractive indeed. And I also agree
core changes are needed to make France attractive for entrepreneurs.

At the same time, the points that OP makes are still valid :). For someone
that wants to open a company, social aids and healthcare access can matter.
Other countries are more open than France is, but it doesn't make France a
black hole where nobody can make a good career. The Paris tech scene is most
alive.

~~~
DreamyCori
You're right that this initiative is one step in the right direction. I don't
want my comments perceived as too negative. I'm one of the people singing
"Let's make France great again!"

~~~
jlengrand
Amen to that !

------
earthscienceman
Huh. This is really interesting. I'm currently living in Paris and have been
talking to my (French) girlfriend about starting a business. Does anyone know
of any other good resources?

------
mabynogy
Congrats for the successful Show HN maelito.

If you're located near Paris, we are starting a new meetup about programming
and startups. The first drink will be held the 6 november near Bastille (where
the French Revolution started):

[http://meetup.com/dailyprog/events/tmsrjqyxpbjb](http://meetup.com/dailyprog/events/tmsrjqyxpbjb)

I hope some people from Beta Gouv will come. I do my best to promote that new
community (especially towards VCs).

Feedbacks and insights are welcome :-)

------
zhte415
This is useful and very smooth. Taking it for a test-run and as this is Show
HN I'm not being picky, just some feedback.

On 'How much does it cost to hire?' [https://mycompanyinfrance.fr/social-
security](https://mycompanyinfrance.fr/social-security)

* I love that you can just choose one on the 4 input boxes and the others calculate. Lots of flexibility to let the user focus on what input they have and answer they want

* There's not an indication whether figures input are on a monthly basis, annual, or other. This affects the tax calculation: Entering 300, 3000, 30000 gets non-linear scaled results - major

* When re-clicking a field, previously entered digits need to be manually deleted rather than the field resetting - minor just my preference

* The breakdown of where contributions go lower down the page is great

* I'd input an existing French company that came to mind. Finding the 'This is not my company' link took a few minutes - minor

There is a fastidious amount of detail. You seem to have been very thorough
e.g. bicycle allowance.

Does France also have tax, social insurance or benefit differences between
cities/regions? Is it material? Is it worth the time/cost to manage?

On the reverse side, does France provide incentives regionally or based on
city for starting companies?

For the above couple of questions, my context for asking:

I live in China and there's a lot of interest/very simple questions about tax
that individuals and companies have. A handful of consultancies put online
calculators for things like employment cost online and cover major cities
(Beijing, Shanghai, Shenzhen, perhaps Hangzhou and similar) where social
insurance contributions may vary.

They do this for free as a lead for their consultancy practices. They don't
put calculators online for things like city- industry- specific incentives
because this is a moving playing field with hundreds of cities moving
incentive goalposts each month, it isn't practical to be accurate.

Are you looking for synergies with not only demystifying social security, but
for example 'find an accountant' and 'find an office'. The potential for
rabbit holes could be large, but also a very nice one-stop hosted CaaS
(Company as a Service).

------
matt_the_bass
One nice feature to consider adding is linking to the official French
regulations for each item you explain in English. This would be helpful for
someone like me who can read French but doesn’t know where to look. To me this
would add a level of trust to your comments/Advice.

------
jgh
I went through this process myself recently and found it to be pretty
challenging to understand the differences between the company types -
particularly since my french is still pretty weak. This is a great resource
though, wish I knew about it sooner!

------
DyslexicAtheist
"any idiot can start a business, but it takes a genius to exit one without
harm" \--unknown

------
kmlx
what are the advantages of opening an llc in france compared to the US/UK/HK?

what about taxation?

how easy can I take money out of the company?

how easy is it to close a business?

couldn’t find anything on the website. is there a gov.uk equivalent i could
check?

~~~
maelito
Taxation is one of our next features. How can the director pay itself (salary,
dividends) is also on the list.

------
nakedrobot2
In Europe you can't fire employees.

It makes it nearly impossible to run a startup. It is the very antithesis of
running a startup.

Unless you get lucky and can survive by hiring contractors, just forget about
starting a startup in Europe.

Source: 2 startups in Europe.

~~~
sashimy
First of all, why do you need to fire employees to run a startup ? I don't
think this is a major need in the development of a startup in fact firing
someone is dangerous since you lose experience and knowledge.

France as many countries in Europe have laws that protect employees against
abuse from companies but you can still fire someone if there is a reason it is
just regulated.

------
JPLeRouzic
I am French and I applaud at any initiative to help the part of the French
economy not under the government control (circa 45%)!

1\. But even if my browser is set to English, I see French on
[https://embauche.beta.gouv.fr/](https://embauche.beta.gouv.fr/) and most of
the issues on the Github repository are written in French! What signal do you
want to send?

2\. As one can find on
"[https://embauche.beta.gouv.fr/"](https://embauche.beta.gouv.fr/") the
employee gets only half of what the employer pays.

Contrary to what is stated on the same site, one employee does not get much
benefit of what the employer pays for her retirements and healthcare, because:

* if she is hired now, there is a good probability that she will have only a little retirement pension in 40 years, even if the law does not change. (probably close to the minimum salary, at least I hope so). So all this considerable amount of money will be wasted in the state and the "sécurité sociale" deep pockets.

* It is the same for the health fund: What makes the French health system seems free for workers, is that they have a mandatory mutual [0] which pays for most of the costs. The "Social security" pays around of 10% of most usual costs, the mutual fund pays the rest...

Most French companies are trying hard to use other schemes for paying better
their employees, for example because they have some company investment fund,
but "shut...".

[0] This website is provided by the URSSAF, the French social security
contributions collector"

~~~
nodefourtytwo
Why spreading FUD?

Social security paid for 76% of all medical costs in 2014 (last numbers I
could find).

92% of hospital bills 64% of doctors visits 62% of drugs, glasses and such.
Most prescribed drugs by your doctor being reimbursed 100% you don't even have
to pay at the pharmacy.

[http://www.vie-publique.fr/decouverte-
institutions/protectio...](http://www.vie-publique.fr/decouverte-
institutions/protection-sociale/risque-sante/depenses-sante/quelle-est-part-
securite-sociale-financement-consommation-soins-biens-medicaux.html)

You also have a very simplistic way of understanding how our retirement
pension system works and the role it has in the society.

~~~
JPLeRouzic
> Most prescribed drugs by your doctor being reimbursed 100% you don't even
> have to pay at the pharmacy.

Not paying at the pharmacy does not mean that you do not pay at all. You pay
three times: Your employer pays for you a huge amount, you pay (look at your
payroll), your mutual fund pays.

Most people pay much more indirectly during their life than they receive
services through the SS.

~~~
nodefourtytwo
You just described how insurance works.

