A major European city like Paris has a high cost of living – that’s a given. If you’re a startup entrepreneur who is on a tight budget, the odds seem to be against your favor. However, with a few knowledge and skills, you might find out that it is not entirely impossible.
Sure, starting a business could be painful and costly, but Paris (or France in general) has very favorable laws and climate for businesses – even for small startups and beginners. Second, tax laws in France are quite flexible – if your business is not doing too well, you’ll get a tax break or at the very least, a tax cut.
But before that, you need to set-up your business legitimately according to France’s laws. Lots of paperwork are needed, and you may have to go through bank scrutiny before getting a checkbook, credit card or any type of financing. The process of establishing the business could be painful and expensive, but below are five tips to lessen your costs:
Get online assistance for your registration.
The registration fees and requirements alone could leave you dry if you don’t plan this out well. The costs would depend on which type of business you are getting into. France has 3 categories that you need to choose from, those are “profession libérale,” “activité commerciale,” and “activité artisanale.”
Profession libérale pertains to professional services such as consulting firms, writing/editing services, programming, teaching and the like. Registration would be under the Unions de recouvrement des cotisations de sécurité sociale et d’allocations familiales (URSSAF), and it’s just for free!
Meanwhile, activité commerciale pertains to trading, selling and retail. For this, a registration fee of €100 is required. Finally, activité artisanale is the most expensive with €180 in registration. It also comes with a compulsory training which requires an additional €200 in cost.
Aside from all these paperwork and registration fees, you need to consult a lawyer and accountant to get stuff done for you. This is because you need someone to write your by-laws, letters of incorporation, register with banks and submitting documents. This could cost you around €2,000 to €3,000 – which is a lot indeed.
However, if you want to keep costs at a minimum, you can seek the assistance of an online firm that specializes on such registrations. This is significantly cheaper than getting an accountant and lawyer – fees usually start at €550 only.
Make sure you stick to your by-laws.
French laws are very strict when it comes to business by-laws. They won’t like it if you are caught selling or offering something that is not expressly written on your by-laws (whether that be close to your main product or not), and penalties can be huge.
Avoid this by making sure that you know what you are in business for, and stick to the products that are defined by your by-laws. More penalties mean more money will be wasted, so be sure about what not to include and what to include on your incorporation and by-laws.
You also need to define if whether your business is a Société à Responsabilité Limitée (SARL) which is the equivalent of a Limited Liability Company (LLC) in the US, or a Societé Par Actions Simplifieé (SAS) which basically means that your business is a joint venture between French entrepreneurs, or if it is simply a branch of your existing foreign business. Defining your business structure can help you refine your by-laws and avoid future trouble.
Now this actually poses a disadvantage for those who will get the services of an online registration firm instead of a personal lawyer and accountant. Most online firms cannot personally advise you regarding this paperwork – but a lawyer and accountant can. If you’re hesitant because of the costs, you just have to go talk to several of these people to get some insight, but you don’t have to hire one for the long-term if it is not within your budget.
Pick an affordable office space.
This is another aspect that needs to be done right, or else it could dry you up of funds in no time. With an affordable office space, your business can start on a good note – especially since you can focus your capital and energy on perfecting your product, networking or marketing the business.
Don’t force yourself to go into posh, high-end work spaces if your company is not ready or your venture will be crippled by rising rental fees in no time. You can choose from serviced offices in Paris or coworking spaces which are great for startups and medium-sized businesses.