Start a company in France instead of Ireland/Hong Kong?

[thomasparra]

I'd suggest getting employed very briefly, then being put on 'chomage'

After that setup as micro entrepreneur. Corporate taxes aren't the issue in France, social taxes are the killer.

If you do micro entrepreneur after being unemployed you get like a year without social taxes.
In // look into setting up an SAS, which should enable you to pay yourself in dividends only, they are variations on setup.

If you want to keep your personal address out of it they are address providers.

With a little research you can limit your taxation for a few years, after that maybe you'll try and escape the 'vivre ensemble'

Thanks a lot. Is there any minimum employment duration to benefit from "chomage"? I have never paid any taxes or worked in France so not sure if I can claim anything besides RSA and CMU today. I was actually thinking of starting a SASU instead of micro entrepreneur as I don't have to pay myself and I can avoid paying "cotisations sociales" if I understand correctly.

I also thought of the micro entrepreneur status, but I think that given the nature of my business, the clients would like to see an actual company as the service provider versus a micro entreprise (but I might be wrong)

Just register a business in France, make expenses to reduce your tax base and pay tax.

It is not worth the risk to set up anything thing in Hong Kong if you live in France. In the future when you relocate out of EU you can always create a new business in Hong Kong and inform all your clients you move out and will bill with the new corporation.

France is even more strict than neighboring countries on anything from China (product import) and Hong Kong (tax evasion). Even if you would do any legal setup, which is unlikely since you don't have substance in Hong Kong it will only raise red flags and cost you a lot to tax consultants, lawyers and compliance.

Even using Hong Kong and paying taxes in France still raises red flags, as why would you do that if there is no substance in Hong Kong.

Focus on the business

Thanks for the info, I agree with that. I can easily see myself being stuck in the middle of red tape and HK/France governments asking for various different justifications and I don't want to get stuck into that, even if it means saving 20% in net income/post tax renumeration especially as my business will likely not generate a lot of revenue in the first 1 or 2 years.

 

[thomasparra]

Would the micro entreprise status work as well? Can I receive money in USD/EUR/GBP from clients and pay my business suppliers/providers (who are individuals) in EUR, USD, GBP through a retail bank or a cost efficient payment processor like Payoneer/Wise? Or is it best to go with the SASU?

 

[thomasparra]

Moving the capital abroad tax-free and use it for his relocated business without liquidating it first and triggering CGT.
WHT on dividends depends on on DTT between new country of residence and France. Can be as low as 0%.
https://taxsummaries.pwc.com/france/corporate/withholding-taxes

I'd suggest getting employed very briefly, then being put on 'chomage'

After that setup as micro entrepreneur. Corporate taxes aren't the issue in France, social taxes are the killer.

If you do micro entrepreneur after being unemployed you get like a year without social taxes.
In // look into setting up an SAS, which should enable you to pay yourself in dividends only, they are variations on setup.

If you want to keep your personal address out of it they are address providers.

With a little research you can limit your taxation for a few years, after that maybe you'll try and escape the 'vivre ensemble'

Just register a business in France, make expenses to reduce your tax base and pay tax.

It is not worth the risk to set up anything thing in Hong Kong if you live in France. In the future when you relocate out of EU you can always create a new business in Hong Kong and inform all your clients you move out and will bill with the new corporation.

France is even more strict than neighboring countries on anything from China (product import) and Hong Kong (tax evasion). Even if you would do any legal setup, which is unlikely since you don't have substance in Hong Kong it will only raise red flags and cost you a lot to tax consultants, lawyers and compliance.

Even using Hong Kong and paying taxes in France still raises red flags, as why would you do that if there is no substance in Hong Kong.

Focus on the business

I am set on setting up the business in France as opposed to HK as I don't want to handle the complexity and the cost of being compliant and running the company in HK or other tax friendly region. I can always use the French SAS as a holding company or simply close the French company and open a new one overseas if I were to move out of France.

I am now debating microentreprise vs SASU. Can I make outsourced providers (suppliers) and clients abide by strict T&Cs with regard to business practices etc through a microentreprise?

 

[oldtimer2]

My understanding ( i could be wrong) is France’s territorial tax system for companies sounds great at first glance, meaning no company profits tax on foreign sourced income… but then they still double dip on tax by first charging a withholding tax on the corporate dividends to shareholders, and then personal tax on that same income to the shareholder. The there is the future where the France gov apparently wants a cashless society which is the great fear of French small business who survive via the cash economy. None of that seems very relevant to this thread though since the author is thinking to stay for a year and exit as income starts to rise.

 

[thomasparra]

Thanks for the inputs everyone. I will start a company in France as it is easier for me, and the fastest solution. Also, my HK visa expires in May 2023 hence I want to avoid any issues pertaining to this in the future. If the company makes high revenue, I will consider keeping the French SAS as a holding to bill French clients or I will simply move overseas altogether (UAE, Asia etc)

 

[treasureinyou]

Thanks for the inputs everyone. I will start a company in France as it is easier for me, and the fastest solution. Also, my HK visa expires in May 2023 hence I want to avoid any issues pertaining to this in the future. If the company makes high revenue, I will consider keeping the French SAS as a holding to bill French clients or I will simply move overseas altogether (UAE, Asia etc)

Down the line I'd recommend moving overseas. France is a tax nightmare, unsafe 7 filled with people who envy you as soon as you make more than 1000 euro per month...

 

[Alonzo]

Down the line I'd recommend moving overseas. France is a tax nightmare, unsafe 7 filled with people who envy you as soon as you make more than 1000 euro per month...

France will be the ultimate tax hell in 2027 when Macron will step down.

Le Pen wants to re-establish the wealth tax (on all assets) and Mélenchon wants citizenship-based taxation on top of that.

 

[algotrader]

If France is the ultimate tax hell and nightmare then i wonder how a French tax resident could become the richest man on earth
Interestingly, when looking at the bloomberg billionaire's list I hardly see anyone from a low tax country.

 

[sriracha]

If France is the ultimate tax hell and nightmare then i wonder how a French tax resident could become the richest man on earth
Interestingly, when looking at the bloomberg billionaire's list I hardly see anyone from a low tax country.

That's the crux of the problem - billionaires. Before (and most important - IF) you become a billionaire, you will experience the highest tax rates in the world.

Thanks a lot. Is there any minimum employment duration to benefit from "chomage"? I have never paid any taxes or worked in France so not sure if I can claim anything besides RSA and CMU today. I was actually thinking of starting a SASU instead of micro entrepreneur as I don't have to pay myself and I can avoid paying "cotisations sociales" if I understand correctly.

I also thought of the micro entrepreneur status, but I think that given the nature of my business, the clients would like to see an actual company as the service provider versus a micro entreprise (but I might be wrong)




Thanks for the info, I agree with that. I can easily see myself being stuck in the middle of red tape and HK/France governments asking for various different justifications and I don't want to get stuck into that, even if it means saving 20% in net income/post tax renumeration especially as my business will likely not generate a lot of revenue in the first 1 or 2 years.

Sorry for intervening late in the conversation. I see you are starting talking SASU, RSA, CMU...
Take it from somebody who went there - DON'T DO IT. DON'T DO BUSINESS IN FRANCE. They will nail you to a pole and start taking turns on you a*s for YEARS.

You will pay 70% tax, you will have to produce countless documents every month, your local tax office will send you "lettres de rappel" by mistake every month, la secu will take money from your corporate account first and ask questions later, you'll get grey hair, and when you throw in the towel and shut down your SASU, you will owe them for 3 MORE YEARS.

Don't trust your Stockholm Syndrome friends who own a SASU and tell you you'll do fine - check for yourself. You WILL pay 70% tax. Also, do the simulations: no matter what form of incorporation you choose (microentrepeneur, SASU, SA, whatever) - you will end up paying 70% tax. The system is so rigged, it's ridiculous. Whatever you do (only salary, only dividends, half and half, choose another form of incorporation), you'll come up with the same numbers. Do the calculations yourself, don't ask the accountants, they are prisoners too (they are entrepreneurs) and need more customers just not to drown in the bills of the Fisc.


I'll be glad to show you the numbers if you like.

 

[Alonzo]

If France is the ultimate tax hell and nightmare then i wonder how a French tax resident could become the richest man on earth
Interestingly, when looking at the bloomberg billionaire's list I hardly see anyone from a low tax country.

Did you know that Bernard Arnault went to Belgium for applying Citizenship because he was afraid of the Tax system in France under François Hollande? He implemented a 75% tax bracket above 1 million euros. It's not only about Arnault but many super rich French people living there at the time. They fled the country and the French government saw a big loss in tax revenue.

And you know, the main reason why he got so wealthy is that his companies make constantly gigantic profit margin selling luxury products. He succeeded at putting a "chip" in people's brain for believing that these luxury products are all about prestige,exclusivity and reputation. So for them it's totally worth the overpriced tag. Thus his companies are making a massive profit margin.

He's basically scamming people legally lol

Bloomberg shows nationalities and not residency. You will be very suprised how many (French) billionaires actually live in Switzerland.

https://interactif.bilan.ch/300-plus-riches/

 

[sriracha]

Did you know that Bernard Arnault went to Belgium for applying Citizenship because he was afraid of the Tax system in France under François Hollande? He implemented a 75% tax bracket above 1 million euros. It's not only about Arnault but many super rich French people living there at the time. They fled the country and the French government saw a big loss in tax revenue.

Not only that, but the fact that A LOT of people actually cheer upon reading of "inspection du fisc". Social envy is a true problem in France. Many people believe that whatever money you make over basic income is stolen, could be better directed, rich people are evil and so forth.
Try for yourself: start talking with your circle of friends about tax optimization, and see what they say.