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Discussion Starter · #1 ·
Hello all,

I understand that, eventually, I have to involve the expert but my French is B1 so I’d really like to know first hand from those who have related experience and knowledge so I can continue my research and be somewhat equipped in the French conversation.

I’m PACS’ed with a French citizen. I have been toying with the idea of setting up the simplest business form for me for a self-employed (research/analyst) business in France and start paying social contribution (instead of USA). I have the following questions:

1) Do I pay both Self-employment tax in U.S. and French cotisation? Are they pretty much the same? If I stop paying self employment tax in US, will my benefit (i.e. retirement money) be cancelled when I’m at the retirement age? Can anyone guide me to the previous post or online link related to this.
2) If I plan to buy a property (house with land) to fully/partially use as business location, should I buy it in my own name or business name? In France, can I use it as business expense?
3) As a PACS partner, will they assume that the house purchased in both partner’s names regardless of the source of funds used in purchase? Since 100% of the fund will be from me for business purpose, is there any way to separate the business investment from personal property?
4) With all said above, I need some advice on what business forms to set up for self-employment/one person company, couple computers, no employee (at least for now) that suitable to my situation.

Any insight is greatly appreciated. Cheers!
 

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Wow that is one H-U-G-E question :eek:

I think you need to break it down into small pieces and decide the way forward one step at a time. Seriously, there are so many variables and they are mostly interdependent.

The first variable is probably, what régime did you choose for your PACS?
 

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Let me make a start - but as ET says, it's a big question(s).

1) Do I pay both Self-employment tax in U.S. and French cotisation? Are they pretty much the same? If I stop paying self employment tax in US, will my benefit (i.e. retirement money) be cancelled when I’m at the retirement age? Can anyone guide me to the previous post or online link related to this.
This is actually the easy part. When you set up your business, part of the registration is registering with the social insurances (i.e. cotisations) so that you are paying into the health care, retirement and other benefits systems here in France. Once you are enrolled in the French system and paying in, you do NOT make self-employment payments to the US any more.

At retirement age, when you apply for US Social Security, if you don't have the necessary quarters (40 quarters or 10 years) to qualify for a benefit, they will ask for your foreign work record. You get credit toward the 40 quarters for quarters worked while enrolled in another "social security" system.

https://www.ssa.gov/planners/retire/international.html
https://www.ssa.gov/international/payments.html

There is quite a bit of information in the International section of the Social Security website. See also the Social Security section of the Paris Consulate website: https://fr.usembassy.gov/u-s-citizen-services/social-security-administration/

2) If I plan to buy a property (house with land) to fully/partially use as business location, should I buy it in my own name or business name? In France, can I use it as business expense?
Depends on what sort of business entity you set up. As an "auto-entrepreneur" you don't get to deduct any business expenses, so it doesn't really matter. If you set up as an EIRL, EURL or some other form of registered business, you can have a portion of your home declared as business property - but again, it depends on the details of how you set this up as to whether and what you get to deduct as expenses (and whether the deductions apply to your personal taxes or to the company's taxes). A bit too complicated to explain succinctly here.

3) As a PACS partner, will they assume that the house purchased in both partner’s names regardless of the source of funds used in purchase? Since 100% of the fund will be from me for business purpose, is there any way to separate the business investment from personal property?
As ET has already said, it depends on what regime you selected. Under the default regime (that I guess applies to PACS partners, too) if you're living in the house with your partner, it's part of the community property. Under certain types of business entity, you could have the business purchase the property - but if you are then living in it, too, you'd have to count the accommodation as "salary" to yourself. This is where it gets really complicated.

4) With all said above, I need some advice on what business forms to set up for self-employment/one person company, couple computers, no employee (at least for now) that suitable to my situation.
Yes, you do. Contact your departemental CCI (Chambre de Commerce et d'Industrie) - they should have a Centre pour Formation des Entreprises (CFE) or some similar office dedicated to helping people start up businesses. Whether they have English speaking staff to help you is a good question - but in Normandy it's a distinct possibility. On this site https://www.normandie.cci.fr/votre-cci the menu item on the far left (Création, Reprise et Cession des entreprises) should point you in the right direction.
Cheers,
Bev
 

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Whether they have English speaking staff to help you is a good question - but in Normandy it's a distinct possibility. On this site https://www.normandie.cci.fr/votre-cci the menu item on the far left (Création, Reprise et Cession des entreprises) should point you in the right direction.
Well spotted Bev, I didn't notice the OP is in Normandy.

holycow, if you're willing to be a little more specific on what part of Normandy you're in, I may possibly be able to point you to advice in English, I have had dealings with a couple of English-speaking advisors in the public service. Argentan/Flers has a very good guy if he's still there, who also does surgeries at CFEs in the surrounding communes. Are you in Dept 61 by any chance?
 

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Discussion Starter · #5 ·
Thank you soooooo much both Bev and ET

I will check out the links. At least I get an idea on SS and French business type. I live in Paris (sorry ET, my name may have given away but I'm not in Normandie), will check to see if there's CCI nearby I can walk in and ask.

As for the PACS. I've looked at my PACS contract and it's only a simple one page paper with the total of 12 lines (not counting the signatories) and only the last paragraph states "Nous concluons un pacte civil de solidarite regi selon les dispositions des articles 515-1 et suivants du Code Civil." That's all we have for PACS paper. I have no idea what regime our contract falls into. Do you think I can walk in and inquire about this atla mairie?

I've seen "separation de biens" mentioned in the forum but would it apply to PACS couple too? Also, the "separation de biens" need to be indicated in the marriage contact or it can be modified later?

Holycow
 

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They aren't productive when the french have to cross the border to purchase butter. :)
They are here - the Lactalis facility that makes Président butter is the big employer where I live. I don't know where all the butter is going but we're making it, the factory is still working night and day :confused:
 

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Well there you are - I didn't even realise there was a shortage! The shelves are as butterfull as ever here, multiple French brands to choose from, never seen anything else.

However to try and get back to the OP - lots of research needed I think. Are you dead set on buying, or would you consider renting office space? It seems to me that renting would be simpler in many ways, particularly since property doesn't tend to appreciate, unless you're actually thinking of buying in Paris itself. You'd then presumably opt for a réel structure where you can deduct expenses, and if you rented an office and used it purely for business I would imagine it would be simples from the accountancy point of view to claim that as a business expense. No doubt Bev will know what code that goes under ;-)
Just a thought. Though you'd have to look into commercial bails, no doubt there's a raft of legislation there too.

EDIT: 3,25€ for a packet of butter? YOU CANNOT BE SERIOUS!!!!!
 

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If you think "global" equals Europe, then you are correct.. Although on my local shelf there are more british & Irish butters on offer then Spainish... It could be that they are €3,25 tho..
So you haven't been keeping up with Aussie news, nor NZ. I certainly do NOT think that "global" = Europe - I'm not a moron!

Issues include:
  • The Chinese have taken to cheese big time
  • Health authorities now consider that butter is not harmful, as once thought, and people are turning away from margarine
  • Most available milk fat goes into other products, especially cheese
  • Droughts have resulted in reduced fat in milk

Perhaps you have been asleep :rolleyes:
 

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If you think "global" equals Europe, then you are correct.. Although on my local shelf there are more british & Irish butters on offer then Spainish... It could be that they are €3,25 tho..
LOL - did you think Spain was a butter producing country? (Just noticed you are in Spain - the French certainly don't cross the border to Spain to buy butter.)
 

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Oh, I must have scrolled up only as far as ET's post and seen the "normandy" as her location.

OK for Paris, here you go: Aide à la création d'entreprise | CCI Paris Île-de-France

I really wouldn't choose your business format "just so" you can deduct expenses for buying a house (or renting an office). I know the "home office deduction" rules you are thinking of back in the US - and the rules here are quite a bit different. I'd do a bit of research with the CFE first before you decide anything. But going for one of the "single person" company forms involves a whole lot more paperwork and hassle than starting as an AE if you can. And once you get into the alphabet soup of business entities, there is the matter of whether the company pays its taxes separately or whether you just flow the results of the company through your personal tax declaration. But you still have to file financial statements with the Greffe de Tribunal (in French). There's no "Schedule C" on the French tax forms. And as "gérant" of a company - even a one-person company - you wind up paying almost 40% of your profits in "cotisations."

But let the CFE run you through the options. They often also have classes on some of the basics of setting up and running a business.
Cheers,
Bev
 

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Discussion Starter · #17 ·
Oh, I must have scrolled up only as far as ET's post and seen the "normandy" as her location.

OK for Paris, here you go: Aide à la création d'entreprise | CCI Paris Île-de-France

I really wouldn't choose your business format "just so" you can deduct expenses for buying a house (or renting an office). I know the "home office deduction" rules you are thinking of back in the US - and the rules here are quite a bit different. I'd do a bit of research with the CFE first before you decide anything. But going for one of the "single person" company forms involves a whole lot more paperwork and hassle than starting as an AE if you can. And once you get into the alphabet soup of business entities, there is the matter of whether the company pays its taxes separately or whether you just flow the results of the company through your personal tax declaration. But you still have to file financial statements with the Greffe de Tribunal (in French). There's no "Schedule C" on the French tax forms. And as "gérant" of a company - even a one-person company - you wind up paying almost 40% of your profits in "cotisations."

But let the CFE run you through the options. They often also have classes on some of the basics of setting up and running a business.
Cheers,
Bev
Thanks you :angel: Bev. I'll check out the CFE too. Seems it won't be easy and quick to set up...sighhhh.I am also thinking about what to file in the U.S. as well if I set up some form of the company here. Coming from the salaried world to the freelance/entrepreneur side is quite overwhelming for me as I would like to put all ducks in the row first and that has been putting off for a long while. Just in case, do you know/recommend any experts who know ins&outs of tax and business types for both U.S. and France? Thanks in advance.

Holycow
 

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Discussion Starter · #18 ·
Well there you are - I didn't even realise there was a shortage! The shelves are as butterfull as ever here, multiple French brands to choose from, never seen anything else.

However to try and get back to the OP - lots of research needed I think. Are you dead set on buying, or would you consider renting office space? It seems to me that renting would be simpler in many ways, particularly since property doesn't tend to appreciate, unless you're actually thinking of buying in Paris itself. You'd then presumably opt for a réel structure where you can deduct expenses, and if you rented an office and used it purely for business I would imagine it would be simples from the accountancy point of view to claim that as a business expense. No doubt Bev will know what code that goes under ;-)
Just a thought. Though you'd have to look into commercial bails, no doubt there's a raft of legislation there too.

EDIT: 3,25€ for a packet of butter? YOU CANNOT BE SERIOUS!!!!!
Well, I didn't now know about the shortage in butter but happened to be in Monoprix yesterday and saw half of the butter shelf emptied. Only the President is available and bought one for 2 euros. Came back home and found this discussion. Funny how the OP can turn into:biggrin1:
 

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Only the President is available and bought one for 2 euros. Came back home and found this discussion. Funny how the OP can turn into:biggrin1:
Good on you :clap2: everyone should buy President butter and keep my neighbours in work.

Yes when you first start looking at the options for setting up a little business in France it does seem a bit overwhelming and it takes a while for everything to sink in. It adds a whole extra dimension, not only do you have to be on top of doing what you do, delivering whatever service it is and finding/dealing with clients, but you also have to consciously take an interest in the business side of things which was a new thing to me, coming from the UK where the only requirement is to pluck a figure out of the air and send it to the taxman every April (well I exaggerate slightly, but only slightly). But I think it's been good for me and I do actually feel that I have a business - I'm on top of the accounting side and I'm more selective over which clients I work for and what work I accept, because I have to be - as opposed to, in the UK I used to do anything and everything that came my way that I had time to do, and not all of it was a good use of time.
Just my thoughts, to encourage you to think positive about business in France :cool:
 

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What you need to file in the US will depend on how you set things up here. If you go for an AE set up, you'll basically have to file a Schedule C (where you will be able to take "normal and usual" expenses against your revenue from the business). If you go for an EIRL or EURL (single person companies - though I don't know what the difference is), you can probably file as an "employee" of the company for US (and possibly also for French) tax purposes.

Though in either case, you are still entitled to the FEIE and you shouldn't have to worry about "self-employment" tax as long as you're properly registered in the French system.

As far as "experts" to advise you.... start with the CFE and see what they can suggest. The only folks I know of who are really "expert" at the business side of juggling US vs. French requirements and regulations are the tax attorneys in Paris. And that is a very pricey source of "advice." But see the US Consulate in Paris website and look for their list of English speaking attorneys in the "Resources for Citizens" listing. The list indicates their legal specialities - and there are quite a few who do business law and taxes and who are dual qualified (i.e. US and France).
Cheers,
Bev
 
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