Choosing the Right Legal Structure as a Freelancer in France

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Embarking on your freelance journey in France can be exciting—but also confusing when it comes to selecting the right legal status. Whether you’re just starting out or considering switching to a structure that better suits your activity, understanding the nuances between available options is key.

This guide walks you through the three main categories available to freelancers in France: individual enterprises, sole-proprietor companies, and wage portage. We begin with the most common: individual enterprises.

Individual Enterprises and Micro-Enterprises

Operating as an individual enterprise means your business is not a separate legal entity from yourself—you run it in your own name. Here are four core characteristics of this structure:

  1. An individual can only register one individual enterprise.

  2. There’s no concept of salary; the business owner withdraws from profits as needed.

  3. Accounting obligations follow those for non-salaried independent professionals.

  4. You cannot have partners or co-owners.

There are several types of individual enterprises, including the micro-enterprise, the now-defunct EIRL, and the standard individual enterprise (EI).

Micro-Enterprise

The micro-enterprise status is often the go-to choice for new freelancers due to its simplicity. Created to encourage entrepreneurship, this simplified regime removes many of the traditional administrative hurdles.

Key Benefits of Starting a Micro-Enterprise

  • No startup capital required

  • No Articles of Association needed

  • Free registration (no government fees)

  • Simple online setup: Submit a Cerfa P0 form with a copy of your ID. If you’re in a commercial or artisanal field, provide proof of legal address (dated within 3 months) and a sworn statement of no criminal record.

Ongoing Advantages

  • Simplified accounting: Most freelancers can manage their books without an accountant.

  • Income tax only: Business income is reported directly on your annual income tax return.

  • Reduced social contributions:

    • 12.8% for sales of goods, food, or accommodation

    • 22% for commercial/artisanal services and liberal professions under the SSI

    • 22.2% for liberal professions under the CIPAV

  • Streamlined social contributions: Declare earnings monthly or quarterly on URSSAF’s platform. Automation is possible with compatible accounting software.

  • VAT exemption below thresholds: One less administrative task until you exceed the limits.

Limitations to Consider

  • Unlimited liability: No legal separation between your personal and business assets. In a legal dispute, creditors may claim your personal belongings—and even those of your spouse.

  • Limited social protection: While healthcare and family benefits are similar to employees’, retirement benefits depend on reported income. Unemployment insurance is not included.

  • No expense deductions: You can’t deduct real expenses from your taxable income, except in specific, predefined cases.

  • Revenue caps:

    • €188,700 for sales, food services, or lodging

    • €77,700 for services and liberal activities
      Exceed these thresholds for two consecutive years and you’ll automatically move to a more complex tax regime starting the following January.

      • Commercial/artisanal activities move to the “régime réel simplifié” (BIC)

      • Liberal activities switch to the “déclaration contrôlée”

  • VAT obligations:

    • VAT-exempt until €91,900 (sales) or €36,800 (services/liberal activity)

    • If you exceed these thresholds, you must collect and remit VAT—even if your clients are individuals.

When Is Micro-Enterprise the Right Choice?

This status is ideal if you’re testing a business idea or planning to stay under the threshold limits. It’s cost-effective and easy to manage.

Do You Need a Business Bank Account?

According to the PACTE Law (May 22, 2019), if your freelance income exceeds €10,000 for two consecutive years, you’re required to open a separate bank account for business activities. While not mandatory at first, it’s highly recommended to open one early for clarity, financial tracking, and access to business banking services.

EIRL (Entrepreneur Individuel à Responsabilité Limitée) – No Longer Available

The EIRL once allowed entrepreneurs to limit their personal liability and choose corporate tax (IS). However, since February 16, 2022, it is no longer possible to register under this status. Existing EIRLs can continue as they are, but no new registrations are permitted.

The Classic Individual Enterprise (EI)

The individual enterprise (EI) is another single-owner structure allowing for flexible tax regime options, including:

  • Micro-enterprise regime

  • Régime réel simplifié

  • Régime réel normal

Tax Regimes Explained

  • Régime réel simplifié applies if your pre-tax annual revenue is:

    • €77,700 to €264,000 for services

    • €188,700 to €876,000 for commercial or accommodation activities

  • Régime réel normal kicks in when revenues exceed these limits.

Advantages of EI

  • Fast and simple setup: No capital required and no need for Articles of Association.

  • Limited accounting obligations: Maintain a daily journal, general ledger, and inventory.

Downsides of EI

  • Unlimited personal liability: All personal property (except your main residence) is at risk in case of debt recovery or liquidation.

  • Social charges based on business income: Unlike corporate structures where charges apply to salaries, here charges are calculated on the full business profit—potentially leading to higher contributions.

What Makes EI Different?

  • Expense deductions: EIs under the real tax regime can deduct professional expenses from taxable income—something micro-enterprises cannot do.

  • Higher social contributions: The social security burden may be heavier depending on the level of income.

Final Thoughts

Choosing the right legal status as a freelancer in France depends on your income expectations, level of risk tolerance, and long-term plans. The micro-enterprise is often the easiest way to get started, but it comes with limits. If you expect growth or want to optimize your expenses and social coverage, the EI under a real tax regime may offer better flexibility.

Always consider speaking with a professional before making your final choice—your business’s success starts with the right foundation.