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Starting a Business in FranceDownside to Auto Entrepreneur Tuesday, March 23, 2010 To much fanfare France launched a new simplified business structure at the beginning of 2009 - Auto Entrepreneur. The big plus was along with being able to register on line, ‘les charges social’ payroll taxes, are pay-as-you-earn. Meaning there aren’t any nasty tax bills based on income from up to two years before, as could be the case before. You make payments based on what is being earned. In terms of registrations, Auto Entrepreneur has been a great success. In the first two months of 2010 67,000 people became Auto Entrepreneurs. There are some serious side effects to Auto Entrepreneur. For example employers can ‘hire’ Auto Entrepreneurs. Who are cheaper to pay than hiring someone traditionally and involve much less paperwork for the employer. The Auto Entrepreneur also loses out on paid vacation and most importantly unemployment benefits. I saw one case on Capital (M6) where someone was laid off only be to contacted by his former employer. Who was interested in his services, as he had become an Auto Entrepreneur. I have no idea if this was planned by the government; I’m not into conspiracy theories. But the effects aren’t good. The latest case I’ve heard about is the ‘sans-papiers’ Auto Entrepreneurs. Sans-papiers means without papers, as in a visa that gives someone the right to be in France and/or work. Some restaurants registered their sans-papiers employees as Auto Entrepreneurs (without their knowledge) so that they could ‘work’ at the restaurants. The big reason for this was that the restaurants then couldn’t be prosecuted for hiring sans-papiers, a crime punishable by up to five years in person and hefty fine. There were a few well organized restaurant occupations with the press in toe and it looks like at least a few sans-papiers might get their visas and a job. The Minister of Labor has promised to increase job site inspections by – 5% and make finding fraud related to Auto Entrepreneurs a priority.
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