Show HN: How to start a business in France
Hacker News loves talking about the state of startups in France [1], and the particularities of our social security system [2].
There is no official answer in English on the Web to the question "how to start a company in France", so we've built a website to guide you through it with as little headache as possible.
It's open-source software [3] built inside the French public startup incubator, beta.gouv.fr.
For those interested : does it convey most of the information you need ? What's missing ? It's the first iteration, and we're planning many new features.
[1]: Startup nation ? https://news.ycombinator.com/item?id=18066248
[2]: The French healtcare and pay as you go pension systems are also regularly discussed e.g. https://news.ycombinator.com/item?id=12998163
[3]: Source: https://github.com/betagouv/syso/
68 comments
[ 3.8 ms ] story [ 122 ms ] threadAt 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.
1. But even if my browser is set to English, I see French on 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/" 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"
What? The basic insurance scheme pays at least 60% of a set of reasonable, negotiated fees and the "mutuelle" covers the rest. There are a few corner cases (complicated dental work, optics) but these are being addressed. Usually the out-of-pocket expense is minimal to nil (a "forfait moderateur" of around 1 euro per doctor's appointment for instance)
Have you had to pay for glasses, dentistry, hearing aids?
Even the current president acknowledges what I said (which is a fresh start)
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...
You also have a very simplistic way of understanding how our retirement pension system works and the role it has in the society.
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.
I may have a simplistic way to understand it, but I am well educated in business and I had to hire people during my professional life.
Glasses, complicated dental procedures, insoles, ... are very little reimbursed.
The overall total (drugs+glasses and such) is 62% reimbursed by social security according to the article by vie-publique.fr
No, that's only for life threatening conditions.[0] You perceive that they are 100% reimbursed, but thats only thanks to private insurances, which are mandatory if you're employed by a firm, but up to you in other cases.
>Glasses, complicated dental procedures, insoles, ... are very little reimbursed.
Yes and it's often quite a surprise to end up paying for dentistry (which is rather expensive) when you already pay a lot for public + private insurances.
>The overall total (drugs+glasses and such) is 62% reimbursed by social security according to the article by vie-publique.fr
In total € I have no doubt. But SS still reimburses about 8 euros for a pair of glasses. That's not 62% of a glasses bill, and the 8 euros for all glass wearers in france do not account for 62% of the SS expenses. The drug reimbursement look that huge but that's only because some people are with lifelong, expensive treatments (1500€ per month for HIV for example) that are fully covered.
In real life, a little portion of people are benefiting from this coverage, and healthy people are prescribed 30% reimbursed medication for mundane affections (I looked up classic treatment for gastroenteritis). So you end up paying with your private insurance (if you took one, which is not guaranteed if you're freelancer for example), or even your own money if you need glasses or a new tooth.
I just want people not to have the wrong idea about how the system works. You're fully covered by society if you're very sick/very poor, that's true, but if you come in France to start a business you probably don't fall in either category and will end up paying a lot (social contributions + through your own money or your private insurance). And private insurance prices are rising 3% per year. Which is to be expected since social security are in the process of unreimbursing many drugs or acts, alas with no cost decrease.
[0]https://www.service-public.fr/particuliers/vosdroits/F21760
Also, we have to make one thing clear about the whole system in France, that's quite different from other places: your employer does not pay for your retirement and healthcase ; she pays for everyone's. Since you're most likely not retired when you have an employer (duh), and most likely not heavily sick, that's probably mostly "everyone else's".
Of course, the line gets more bluried if you happen to have kids (and get the "allocations familiales", or housing help, etc...) or sick relatives, or retired ancestors.
It's a long, heated, and complicated debate whether this is a good thing or not, and whether this is sustainable in the long-term, and whether the current generation of worker will be able to get the same "generosity" from the next generation.
It's also true that most people find some way to save money "for themselves", and that companies can benefit from systems where they save money directly for their employees.
And, guess what ? As usual, this is debated at the very moment we speak, so expect nothing except change :/
> and whether the current generation of worker will be able to get the same "generosity" from the next generation.
It does not work well even now as there are nearly as much retirees as employees. Only debt and the fact we are a huge economy in EU save us.
You can either save for yourself (ie in mandatory pension funds) and have a risk of bankruptcy (with some governmental cover, but can't expect 100%), or have a system where current workers pay pensions for current retirees, or some mix of those. And all you can do is hope hard that once you retire, there will be enough people working for your pension (it won't). You have to save/invest aside to be really safe in 20-30 years - not really great social system if you ask me. Expect retirement age to be raised gradually exactly because this is failing.
It is utterly unsustainable, demographic curve and raw numbers won't let you do miracles, and you can't rely on pure immigration to fix this these days.
Happy to be in the system which doesn't work like that, I can see how much I have spared, what is the projection for retirement etc. I can decide when I to retire and manage with what I have saved.
That public spending is c. 55% of GDP does not mean that private spending is 45% of GDP, since private + public spending does not equal GDP. Back of the envelope computations put private spending at 265% of GDP [0].
> 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 hard to understand how French people can both have "very low" pensions and then be one of the country that spend the most on pensions as a share of GDP [1], and have retirees richer than working people [2, p5.]
[0] https://www.nouvelobs.com/rue89/rue89-chez-les-economistes-a...
[1] https://data.oecd.org/socialexp/pension-spending.htm
[2] http://www.cor-retraites.fr/IMG/pdf/doc-4099.pdf
Yes that is entirely true, but you do not take in account that:
* The median average revenue is around 1200 euros per month!
* The pension is financed partly through the debt (one third)
* There are nearly as much retirees as workers (16M vs 17M)
* We are 65 M people and our "social security" is based on 17M people who are payed a misery? The system will bankrupt soon.
[1] https://www.insee.fr/fr/statistiques/3135908
In addition they are increased as if their were for 1600h/year (équivalent temps plein)
The source of that website is the French law anyway, the code is just for reference, you have to understand French to do business in France.
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...
(I'm one of many french engineers who left France to have a decent career)
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.
No severance package - yay for flexibility! I'm not saying you should pay a lot, but 1-2 month's salary after 5 years with the company and 3-6 after 10 years shouldn't kill the company and should provide a respite for the just-fired loyal employee. By the way, in your index the country would get a 100/100 when it has no severance package.
No extra payment for overtime - again, this seems like abuse. This would be 100/100 in your index but I don't really see how it can be justified. Same with the time restrictions for overtime.
Paid annual leave - ...
It's one thing to be overbearing and another to offer decent social support to employees (I find France overbearing).
I think the economic instability in a startup (a real one) would allow more freedom.
I agree that external company consultant are more expensive than employees, but on the other hand it's much more flexible than employees.
> in some places state tries hard to force self-employed consultants into permanent positions
I don't think that France is trying to do that, but it's from talking to a half-dozen of self-employed consultant, so anecdote, not checking the legislation. Still in France, regarding consultants, there's a limit on how long a consultant can stay in the same mission, I think that beyond three years, the law state that they should become employee where they are really working. But I don't know how much it is applied.
It's plenty of time to determine whether someone is fit for a job or not.
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.
> 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.
The trial period go both way: the employee can choose to leave very easily. We had one such case where I'm working, the employee left before the 6-months period was finished.
In addition to firing, it exists legal possibilities to cancel the employee/employer contract if both side agree on it ("rupture conventionnelle"), if I've understood the mechanism.
Yes exactly, that's pretty fair, if the employer can fire at-will, the employee can leave quickly as well, it's flexibility on both sides.
> In addition to firing, it exists legal possibilities to cancel the employee/employer contract if both side agree on it ("rupture conventionnelle"), if I've understood the mechanism.
Yes indeed that's exactly that.
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.
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.
And still you can fire someone. And now, with recent reforms, you know exactly how much it will cost since it is a fixed grid.
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.
(also "Europe" is a large place, could you be more specific?)
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.
If you want to fire someone after those 8 month, you indeed have to justify your decision (economical, huge mistake from the employee, common accord) and follow the process, but it's doable as long as you actually have a justification
It's interesting to read the SARL process and compare it with the UK one: 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".
:) what is this nonsense?
In France they are too, with the CSG and CRDS.
- 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%...
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.
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?
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
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 :-)
On 'How much does it cost to hire?' 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).