Becoming an Auto-Entrepreneur in France: Steps and Thresholds

The status of auto-entrepreneur (officially renamed micro-entrepreneur since 2016) attracts hundreds of thousands of project creators in France every year, thanks to its administrative simplicity and unique tax regime. Whether you want to launch a full-time freelance activity, test a start-up idea, or simply supplement your salaried income, this regime offers a particularly flexible legal framework. However, this apparent simplicity hides strict rules regarding turnover thresholds, social security contributions, and taxation that must be mastered inside out to avoid unpleasant surprises. This comprehensive guide, written by our experts, details step-by-step the procedures, financial thresholds, and pitfalls to avoid for a successful launch in full compliance with French law.

---

1. Legal Framework and Eligibility Conditions

The micro-entreprise (sole proprietorship under the micro-tax regime) is governed by the Code de commerce (French Commercial Code) and the Code de la sécurité sociale (French Social Security Code). Unlike a classic company (such as an EURL or SASU), the auto-entrepreneur operates under the status of an entreprise individuelle (EI - individual business/sole proprietorship).

Since Law No. 2022-172 of February 14, 2022, in favor of independent professional activity, the status of the individual entrepreneur has been profoundly reformed. Now, there is an automatic separation of law between the professional assets and the personal assets of the entrepreneur (Article L. 526-22 of the Code de commerce). Your primary residence and your personal assets are thus automatically protected from professional creditors, without the need to draft a declaration of unseizability before a notary.

Who can become an auto-entrepreneur in France?

The status is open to almost any natural person:

• French citizens and nationals of the European Union (EU), the European Economic Area (EEA), or the Swiss Confederation.
• Non-EU foreign nationals, provided they reside in France under a residence permit authorizing the exercise of a non-salaried activity (such as the carte de séjour temporaire "entrepreneur/profession libérale").
• Employees (subject to any exclusivity or non-compete clauses in their employment contract).
• Civil servants (under strict authorization conditions from their hierarchy and often limited to part-time work).
• Retirees and students.

Excluded Activities

Certain professions cannot benefit from the auto-entrepreneur status. Notably excluded are:

• Activities linked to the MSA (Mutualité Sociale Agricole - the agricultural social security scheme).
• Regulated liberal professions that do not report to the CIPAV (the pension fund for liberal professions) or the general scheme for their retirement (e.g., lawyers, doctors, notaries, architects, chartered accountants).
• Activities subject to real estate VAT (property dealers, independent real estate agents under certain conditions).

---

2. Turnover and VAT Thresholds

Benefiting from the micro-entreprise regime is conditional on respecting annual turnover (chiffre d'affaires - CA) thresholds. These thresholds are set for three-year periods and have been updated for the 2023-2025 period.

Turnover Thresholds (Micro-entreprise Tax Regime)

To maintain your auto-entrepreneur status, your collected annual turnover excluding taxes (chiffre d'affaires hors taxes - CA HT) must not exceed:

• €188,700 for commercial activities and the provision of accommodation (sale of goods, objects, supplies, food to take away or consume on-site, or hotel-type accommodation, bed and breakfasts, rural gîtes).
• €77,700 for services belonging to the category of BIC (bénéfices industriels et commerciaux - industrial and commercial profits) or BNC (bénéfices non commerciaux - non-commercial profits), as well as for regulated or non-regulated liberal professions.

Pro-rata note: If you set up your business during the year, this threshold is calculated prorata temporis (proportionate to time). For example, if you start a service provision activity on July 1st, the threshold for the current year will be €38,850 (€77,700 / 2).

VAT Franchise Thresholds

Being an auto-entrepreneur does not automatically mean you are exempt from VAT. You benefit from a franchise en base de TVA (VAT exemption scheme) as long as your turnover remains below certain thresholds. If you exceed these thresholds, you must charge VAT to your clients and remit it to the state.

Here are the thresholds for the franchise en base de TVA:

| Type of Activity | Base Exemption Threshold | Increased Tolerance Threshold |

| :--- | :--- | :--- |

| Sale of goods / Accommodation | €91,900 | €101,000 |

| Services / Liberal professions | €36,800 | €39,100 |

• Below the base exemption threshold: You do not charge VAT. Your invoices must mandatorily display the mention: "TVA non applicable, art. 293 B du CGI" (VAT not applicable, Article 293 B of the French General Tax Code).
• Between the base threshold and the increased threshold: You can remain exempt from VAT if it is the first year you exceed the base threshold. If you exceed it for two consecutive years, you become subject to VAT on January 1st of the following year.
• Above the increased threshold: You become subject to VAT from the 1st day of the month of the exceedance. You must then issue corrective invoices for that month and charge VAT.

---

3. Practical and Numerical Examples

To fully understand the mechanism of thresholds and taxation, let us analyze two concrete situations.

Example 1: Lucas, IT Consultant (Service Provision - BNC)

Lucas launches his consulting activity on January 1st. During his first year, he generates a turnover of €35,000.

• Turnover Threshold: He is well below the €77,700 threshold. He retains his status.
• VAT: His turnover is below €36,800. He does not charge VAT and cannot reclaim VAT on his professional purchases.
• Social Security Contributions: As an unregulated liberal profession, his contribution rate is 21.1% (or 21.2% depending on decree updates). He will therefore pay approximately €7,385 in social security contributions to the URSSAF (the French body collecting social security contributions).

Example 2: Sarah, Online Jewelry Designer (Buying and Selling Goods - BIC)

Sarah sells her creations on the internet. Her business explodes, and she generates a turnover of €95,000 over the year.

• Turnover Threshold: She is below the €188,700 threshold. She remains an auto-entrepreneuse.
• VAT: Her turnover (€95,000) has exceeded the base exemption threshold of €91,900, but remains below the increased threshold of €101,000.
• If it is her first year of exceeding the base threshold: She remains exempt from VAT for the current year.
• If she exceeds €91,900 again the following year: She will have to charge VAT starting January 1st of the third year.
• Social Security Contributions: Her contribution rate is 12.3%. She will pay €11,685 in social security contributions.

---

4. Step-by-Step Practical Registration Process

Since January 1st, 2023, all business creation formalities must mandatorily be completed on the website of the Guichet Unique (Single Window) managed by the INPI (Institut National de la Propriété Industrielle - National Institute of Industrial Property). The old CFEs (Centres de Formalités des Entreprises - Business Formalities Centres) such as the URSSAF or the CCI (Chamber of Commerce and Industry) no longer receive direct declarations.

```

[Step 1: Document Preparation] ➔ [Step 2: Registration on INPI] ➔ [Step 3: Tax Option Choices] ➔ [Step 4: Receipt of SIRET]

```

Step 1: Prepare Supporting Documents

Before logging on, gather the following documents in PDF format:

• A copy of your valid ID (identity card, passport, or residence permit), with the handwritten, dated, and signed statement: "J'atteste sur l'honneur que cette copie est conforme à l'original" (I hereby certify that this copy is true to the original).
• A proof of address less than 3 months old in your name (electricity bill, gas bill, rent receipt) or a certificate of free accommodation (attestation d'hébergement) accompanied by the ID of the host.
• For regulated artisanal activities (e.g., hairdressing, construction, bakery): a copy of your diploma (such as a CAP or BEP) or proof of 3 years of professional experience.

Step 2: Create an Account and Submit the Declaration on the Guichet Unique (INPI)

1. Go to the official website: `procedures.inpi.fr`.

2. Create an account via FranceConnect or directly on the platform.

3. Select the option "Submit a business creation formality" (Déposer une formalité de création d'entreprise).

4. Fill out the online form: identity, business address (often your personal home address), and a precise description of your main activity (which will determine your code APE/NAF - business activity code).

Step 3: Choose Your Tax and Social Security Options

During the entry process, two crucial options will be presented to you:

• The frequency of your turnover declarations: You must choose between a monthly or quarterly declaration. We recommend the monthly option for better cash flow management.
• *The versement libératoire (flat-rate dischargeable payment of income tax): This option allows you to pay your income tax at the same time as your social security contributions, as a fixed percentage of your turnover (1% for sales, 1.7% for BIC services, 2.2% for BNC/liberal professions). Warning: To qualify, the reference tax income (revenu fiscal de référence* - RFR) of your tax household for the year N-2 must not exceed a certain threshold (approximately €27,478 per tax share).

Step 4: Validation and Receipt of Identification Numbers

Once the file is validated and electronically signed, the INPI transmits the information to partner organizations (INSEE, URSSAF, the clerk of the Commercial Court, and the tax office).

• Within 8 to 15 business days, you will receive your certificate of registration in the Sirene register by post, containing your SIRET number (composed of 14 digits) sent by the INSEE (French National Institute of Statistics).
• You will also receive your affiliation notification from the URSSAF to enable you to create your online declaration space.

---

5. Mistakes to Avoid

• Forgetting to declare zero turnover: Even if you have collected no revenue (€0) over a period (month or quarter), you must mandatorily validate your declaration by entering "0". Failing to do so exposes you to a flat-rate penalty of approximately €55 per missing declaration.
• Confusing turnover (CA) with profit: In a micro-entreprise, you are taxed on your gross collected turnover. You cannot deduct any actual expenses (rent, equipment, travel, internet subscriptions) from your declaration. If you have high operating costs, this status may not be advantageous for you.
• *Neglecting Professional Indemnity Insurance (RC Pro):* Although it is legally mandatory only for certain professions (construction, health, transport, financial advice), it is highly recommended for everyone. A simple accident at a client's premises or a delay in project delivery can cost you thousands of euros in damages.
• Not opening a dedicated bank account: French law requires auto-entrepreneurs to open a bank account dedicated to their professional activity once their annual turnover exceeds €10,000 for two consecutive years. However, it is recommended to do this from day one to clearly separate your personal and professional finances.

---

6. Frequently Asked Questions (FAQ)

Can I combine the auto-entrepreneur status with my unemployment benefits (France Travail)?

Yes, absolutely. If you benefit from ARE (Aide au Retour à l'Emploi - return-to-work allowance), you can combine your benefits with your auto-entrepreneur income. Two options are available to you: the partial maintenance of your monthly benefits based on the turnover declared each month, or the payment of ARCE (Aide à la Reprise ou à la Création d'Entreprise), which corresponds to a lump-sum payment of 60% of your remaining unemployment rights (paid in two installments 6 months apart).

What is the ACRE and how do I get it?

The ACRE (Aide aux Créateurs et Repreneurs d'Entreprise) is a partial exemption from social security contributions during the first year of activity. It allows you to reduce your social security contribution rates by half during your first 3 quarters of activity (for example, the rate for services drops from approximately 21.1% to 11%). Obtaining it is no longer automatic for auto-entrepreneurs: you must complete an application form with the URSSAF within 45 days of creating your business, proving that you meet the conditions (unemployed, under 26 years old, recipient of the RSA welfare benefit, etc.).

How do I invoice a client located abroad?

If you invoice a client located outside the European Union, you do not apply VAT. If your client is located in the EU and is a business (B2B), you must obtain an intra-community VAT number (free of charge, to be requested from your Service des Impôts des Entreprises - SIE / corporate tax office) and apply the reverse charge mechanism. Your invoice must state: "TVA non applicable, article 293 B du CGI - Autoliquidation par le preneur" (VAT not applicable, Article 293 B of the CGI - Reverse charge by the customer). You must also fill out a Déclaration Européenne de Services (DES - European Declaration of Services) each month.

What happens if I permanently exceed the turnover thresholds?

If you exceed the turnover threshold of the micro-entreprise (€77,700 or €188,700) over two consecutive calendar years, you lose the benefit of the micro-entreprise regime on January 1st of the following year. Your individual business automatically switches to the real tax regime (déclaration contrôlée for BNC or régime réel simplifié for BIC). You will then have to keep full accounts and, preferably, hire a chartered accountant.

---

Summary

• Simplified Status: The auto-entreprise is an individual business with automatic limited liability, protecting your personal assets.
• Strict Thresholds: The annual turnover limits are €188,700 (sales) and €77,700 (services/liberal professions).
• VAT Exemption: You do not charge VAT below €91,900 (sales) or €36,800 (services), with a tolerance window under certain conditions.
• Mandatory Single Window: All creation procedures are carried out exclusively online on the INPI portal.
• No Expense Deductions: Contributions and taxes are calculated directly on your gross turnover, making it essential to calculate your profitability carefully.

Legal information for guidance only, not personalised legal advice. For your specific situation, ask your question free of charge on AvocatAI — answers based on French law, in your language.