Living in France, I can tell, France is very startup hostile.
The amount of taxes a company has to pay and the amount of paperwork to do (or money to delegate it) is just absurd.
The only way a small tech company can make any money and be sustainable (let alone grow) is having all employees as associates (with all the organizational problems that such thing will bring) and take dividends instead of salaries, otherwise literally more than half of the salary is gone in taxes.
And of course, this is all having their own day job, or taking a "company creation" sabbatical year, which is the only actually helpful thing for startups you'll find in France. You can take a year off from your job, try to create a company, and after the year your employer has to take you back in the same position (if you want, obviously). You need to have worked a number of years before, both in global and with your current employer, though.
VC culture is close to non existing, so you need very good connections to have investors, and those connections often times aren't in France. Financial and investing groups in France are very conservative.
Literally all new companies I've seen founded are like that, and from those that live longer than a year, about 50% move their HQ elsewhere, normally the place where the funding came from.
With the numbers we made back in the day (we were 5), the gap from "we're making some money on the side" to "we need to hire someone who isn't a founder" was about €300,000 yearly in extra revenue. Otherwise it wasn't worth it.
Yes there are high taxes, (not half of the salary, for a software engineer it is very often around 30%) but they basically cover a lot of employee services that you would need to pay extra for in the US (health coverage, retirement,...).
Most startup in France don’t have « all employees as associate », that makes no sense to me. I currently have 20+ employees with no problem, and most startup are in the same situation.
On the VC problem, you are partly right. There are plenty of VC thank you! Partech, Kima, Alven, Daphni... Only to cite the French ones, but you have access to VC everywhere in Europe. It it actually fairly simple to get small investments, but to be honest, it is still a bit difficult to get some large ones (you still have to look for it abroad).
I actually don’t see French startups moving there HQ somewhere else, so I wonder where that affirmation came from... maybe you’re just talking about the ones that are expending abroad.
Aren’t you just repeating some stereotypes you heard elsewhere? If France were as hostile as you pictured it, how would it have such a dense startup ecosystem and even (God forbids!) some very successful ones?
- The company has 60k budget.
- 25% goes to employer tax (charges patronales). 45k left. That's commonly called the gross salary (salaire brut).
- 25% goes to employee tax (charges sociales). 34k left. Commonly called the net salary (salaire net)
- Employee pays income tax at the end of the year. The rate is progressive and highly variable depending on personal situation. (30k left if you're single living alone).
Tip: Generally speaking I strongly advise to avoid discussing taxes with French citizens, fact is absolutely nobody understands where money goes to or how much. The usual payslip only shows the "charges sociales" itemized as 10 to 20 lines of things.
Where are they? Cause as a French, I've been living on the startup scene for 10 years, and I don't see those anywhere. There are successful companies, but startup?
I hear about a 1000 more US ones than french ones, while I'm literally living next to an incubator.
More than half if you consider taxes on the company. A 30k salary costs the company about 80k. Sure, there are loads of social services, but still. In the company I created we did the work ourselves, and sometimes hired freelancers for certain things we're not familiar/experts in, but without external funding taking one single employee is a major blow to the accouting of a small company.
With 20 people you'll soon need to have a comité d'entreprise :P
> Most startup in France don’t have « all employees as associate », that makes no sense to me.
That's the only way to operate if you don't get external funding.
> I actually don’t see French startups moving there HQ somewhere else, so I wonder where that affirmation came from...
I'm sure Paris is different, but that's a common pattern for companies founded around Sophia Antipolis, the "Silicon Valley" of France. The startups that tend to stay it's because they have local clients, the rest often leave or die, with notable exceptions (LivePepper comes to mind).
> Aren’t you just repeating some stereotypes you heard elsewhere? If France were as hostile as you pictured it, how would it have such a dense startup ecosystem and even (God forbids!) some very successful ones?
Nope, I insist, I'm sure Paris is different, but most people don't live in Paris. Also dense compared to where? The Netherlands or Belgium are denser.
France is dying, because France can't have a private sector because of its regulations.
The fun part is, now that France is in the neo-liberal EU, France is dismantling its super-big-yet-working-ok public sector to make place for private companies... That can't exist because of regulations.
France is dying to me. As an 18-yo, I'm seriously concerned on what to do for my future. The country has a super good education system (I would easily say the best in the world, by far) (just check out the ENS's Nobel prize / admissions ratio) but has no companies where people do any work. Most of the brilliant French minds go to work in other countries where it's possible to create and operate a company.
this number is incorrect , or you get fooled, I was working in a startup that was exactly helping people creating companies with the paperwork, including the step you're mentionning, and it was 20 to 30 euros , maybe 50 depending on the journal and option you take
200~300 euros was the price we billed for a startup creation including ALL the paperwork, admnistrative fee, publication fee, and the fact we will review all your documents before submiting them to the french administration and do the follow up with you in case your submission was still denied.
> when you create a company, you have to pay a separate fee (~200eur) to a private "official journal" to publish the fact that you're creating a company.
Irrelevant, it's a ridiculous amount compared to other costs involved in starting a company.
> just check out the ENS's Nobel prize / admissions ratio
This doesn't tell anything about the French education system.
> Most of the brilliant French minds go to work in other countries where it's possible to create and operate a company.
A lot of brillant minds don't have any interest in creating a company. Besides, the world is a big place with many opportunities. Nowadays it's easy to travel and work abroad. A lot of people, brillant or not, leave their country out of curiosity.
As any places, France has good and bad things. Usually, we understand what we miss after living a few years abroad.
And even the startup culture itself, or the social consideration of pursuing one venture, is of course not the same as in the US or in Germany, but it was pretty much non-existent just 15 years ago, compared to what it is now. It's not perfect, because it's young still, but it's here now.
About regulation, per se, it's not a bad thing.
About education... you don't get to judge a system by a single metric, especially not one that pertains only to a very small sample. Not saying it's good/bad/better/worse.
You're 18yo, you have plenty of energy and headroom to discover and create anything, anywhere; what matters is the networks with which you will work, wherever they are.
this is entirely false, it does not cost a cent to get something published to the JO / create a micro-entreprise. source: have one. The only paperwork required is filling a couple internet forms + reporting how much you earned every month, again by internet.
>France is dying to me. As an 18-yo, I'm seriously concerned on what to do for my future. The country has a super good education system (I would easily say the best in the world, by far) (just check out the ENS's Nobel prize / admissions ratio) but has no companies where people do any work. Most of the brilliant French minds go to work in other countries where it's possible to create and operate a company.
You're young, and you are, quite honestly, fully misinformed as to how things work in France. I know it, I live here, I was born here, I work here.
France is at the forefront of airplanes, rockets, AI, has hundreds of startups and old companies. The only places where the private sector cannot exist directly because of regulation are fully justified. Take the upcoming dismantlement of EDF in multiple companies, leaving 35% to the private sector. Handing off electricity distribution to private entities is quite possible the worst thing a country can do. This is an essential service. And so are all the other ones that limit the private sector. Everything else is absolutely fair game, and evidenced day after day. Things like visa applications ? Handled by private companies. URSAFF & Pole Emploi ? Mostly handled by private companies.
So, yes, we have a sizeable public sector. Yes, we have laws that prevent employers from abusing employees. Nothing that prevents you from starting your company, in any sector. It does prevent you from treating employees like shit. Hell, you can become a micro-entrepreneur today if you want.
A lot of countries have more regulations, but if you complain about every one of them and take it as an obstacle, yeah, really, nothing is going to come out of it.
France is not, by a long shot, the most bureaucratic country in the world. Wow 200eur to open a company? How much does that compare to, I don't know, a yearly salary? Of course it's stupid fee, the US is full of them as well but I don't see people whining.
People in France can't complain that the taxes are high and there's no money when every time some reforms are proposed such and such union goes to protest because god help them if the train conductors don't have high fashion vests right? Or complain about "loss of work rights" like, I don't know, a "right" to a lifetime employment.
There's also money you can get for creating a startup if you volunteer when your company does a round of layoffs for example.
> Financial and investing groups in France are very conservative.
A friend set up a company, like you said having first another job, and it took 3 years IIRC to get a loan from a bank. All its initial money was love money coming from family and friends investors.
Whenever topics on France arise on HN, it's amusing to see many opinionated/politically biased comments from French people.
I personally have no idea on how France compare with other countries as far as startup creation go, but I'd take with a pinch of salt any comments making very strong claims.
France is an amazing country don't get me wrong, but you can't just sweep everything under the rug just because it has good social safety nets. Living in a place with a strong french diaspora and having tons fo family members living in france, the things I hear the most from them are the grim employment prospects, the lack of opportunities and a hopelessly stagnant economy. And this was before COVID.
Lets also not forget the extreme levels of intergenerational, hard to escape destitution minorities living in the Cités experience that make even america look good when it comes to social mobility for it's minorities. And, while I'm not a fan of the (overused) concept, France has neocolonialism as a foundation of its exploitative african policy. There's also the rampant homophobia, ingrained misogyny, very, very casual racism... you get my point
There are even comments saying, unironically, "if you aren't happy just move instead of complaining". I couldn't imagine that type of argument not getting absolutely destroyed if it was a thread about the US, the UK or Canada. I guess we just hear a lot more coming from english speaking countries, which skew how we view countries we don't hear problems from.
- 20% VAT on revenue,
- then, after your marginal costs:
- Either distribute as dividends. IS is 15% to 30% of profit, then long story short with CSG, there is a 17% tax,
- Either distribute as salary to employees: 46% as taxes/contributions,
- In either case, dividends or salaries, we have to pay 0% to 45% income tax, averaging at 10-15% of our incomes.
Don’t forget mandatory paperwork (lodging accounting documents yearly) + an accountant because you won’t understand how to lodge the paperwork. In total, if you had only mandatory charges + VAT + CET (city tax assuming you have no office) + IS + CSG + Income tax, for 100k revenue distributed 100% as dividends, you’ll have 51,325€;
If you distribute 100% as your own salary, you’ll get 39.285€.
* You only have the basic, state social security (the 17% part OP talks about). This basically only covers you for emergency situations. There's tons to pay out of pocket in case of pretty much anything (hospital stays, glasses, teeth work, etc). This is usually covered by a complementary insurance, usually paid for by the employer (mutuelle). Private people can subscribe to it, but it costs extra.
* You do not contribute to any retirement. If you only do this for your whole life, at the end, you will only get the absolute minimum retirement (which is ridiculous).
* You do not get unemployment in case your business fails.
* In case of accident that prevents you from working (say car crash and you end up paralyzed or something) you're SoL. A "regular employee" (especially engineer level) could have an insurance covering this. In the situation described here, you'd have to pay extra or not get any money anymore.
All this is to say that for all the taxes paid (almost 50% !) you get pretty much... nothing. I'm curious how this compares to other countries with lower taxes where you're expected to pay for insurance out of pocket.
There's also another fun fact: once you have your 50k in hand after having paid the other 50k to the state, it doesn't stop there! Want to go buy something? The state would love you to, they get 20% out of that too!
I'd be curious to see a similar breakdown for the US in particular, where people usually say that for the higher salaries you have to pay more for healthcare. Maybe the extra insurance is much more expensive over there, don't know.
---
Parent's error is you don't count the VAT in the revenue. It's invoiced on top of it and it goes back to the state directly. Also, if you have 100K in yearly revenue, it's not a good deal to pay regular income tax on that, the 30% flat rate is more advantageous.
All in all, your 100% dividend works out to 53869 which is a roughly 5% increase over their estimate.
That's par for the course. Is there many countries where companies can get away with paying much less (including employee health insurance, retirement etc.) ?
How much are taxes if you live in SF again? Or NY?
> is having all employees as associates... otherwise literally more than half of the salary is gone in taxes
The income tax rates in France in 2020 are as follows: Up to €10,064: 0% €10,064–€25,659: 11% €25,659–€73,369: 30% €73,369–€157,806: 41% €157,806+: 45%
Source https://www.expatica.com/fr/finance/taxes/a-guide-to-taxes-i...
+ social fees, so for a salary of 100k you're getting back 65k approximately https://taxleak.com/france/?salary=100000 (though yes the employer needs to add some more to this value)
Source: until last year I had a company in France with several employees.
My salary isn't that high, but after taxes, both on me and the company, I get about 1/3 of what the company pays for me overall.
Also if a startup ends up getting VC funding in an other country it can move there unlike a farm or a plumbing business.
In france, another problem is that some medium/higher social classes tend to capture publicly paid jobs. That's another problem too that needs to be tackled.
In my view, it's a choice of how a country decides to allocate its resources: not letting people live in awful conditions and work 3 jobs, or having trillion dollar companies make money on the technology developed on the back of DARPA something like 50 years ago.
It's easy to criticize an entire country for its "policy on tech", but it's important to not forget about tax optimization, which is another part of the problem. France does have a lot of good scientists too, build aircraft and is a nuclear power. I'm sorry to say that generally, the silicon valley VC aura is VERY OFTEN filled with libertarians who have zero clues about how poor people are "managed", and the reality of social inequality. It's a entirely different culture. France saw a socialist president in the 70s through the 80s, who had tough words against capitalism. You cannot dismiss political history.
Just my 50 cents, I really wanted to bring some nuance. All countries have their own political problems.
And to be clear: I'm poor and live in a 18 square meters, and would love to be silicon valley rich and make 80k per year. But I would also take resources from other people who don't have the education I have.
Now, I think the one issue the French (and really European) tech sphere should tackle is low salaries for engineers. France has stellar engineering schools but lose so much talent because local companies are simply unwilling to match the international offers their graduates are getting. That brain drain erodes the talent pool and make the tech scene less attractive in the long run.
Counter argument: A lot of startups in the US that IPO'd and still don't earn money is absurd as well
You just illustrate the tipical French mentality ingrained by media all year long. A comment full of cliché. If France is so bad, move out. You'll learn a thing or two in the process. Beginning with the grass is not always greener elsewhere.
Please don't do nationalistic flamewar like this on HN. (This also is a cliché, and a nasty one.)
> You just illustrate the tipical French mentality ingrained by media all year long.
Living in France for 8 years and creating 2 companies doesn't seem to count, eh? Now I have my companies elsewhere in Europe and just pay my taxes on the revenues in France, only not to deal with the bureaucratic overhead.
> If France is so bad, move out.
The chauvinism is strong in this one. I'm in France, because I like things here. But startup culture isn't one of them. Why take criticism of a country's policy personally?
If you love your country try to fix it, don't suggest people who complain to leave.
> You'll learn a thing or two in the process.
I'm sure I would. I mean, I've done it.
They do move out! I'm in Hong Kong and we're lucky to have 10s of thousands of French people that were frustrated with the business environment in France and moved to Hong Kong. They start businesses from restaurants to crypto currency exchanges. It's really great having them (and other immigrants around).
I encourage France to continue whatever policies they have that encourage their best and brightest to head for places that treat them better.
Be careful what you wish for, because "they" are indeed moving out. Human capital flight is a very real problem in France.
It’s easy for immigrants to assimilate into society in America than most places in EU. Till that changes no matter how easy it is to get a startup visa it won’t make a difference.
I don’t know how true that is. Can someone with more experience please validate?
On the other hand, my wife, being a Hijabi, did experience it in subtle ways (if we can call it racism): sometimes not-so-friendly gazes from strangers, she can not go to the public swimpool because burkini is not allowed, and she struggled for a year to find work even though she had a good engineering degree (the reason was not always disclosed, but some recruiters did explicitly tell her that it was because of her Hijab). Which is different from the UK and other European countries from what I have been told.
I don't watch French media, but I hear that that's where racism mostly emerges. And I must admit, the behaviour of some immigrant communities (especially some north-african ones, saying this as a north-african myself), partly justifies the hostile attitude towards them.
That's because the French culture does not work on the same basis as the UK and northern european countries. The french society strongly goes towards integration and not multiculturalism.
It has a lot of deep consequences in the society, starting that people expect you to identify and behave as French, regardless of your background, skin color or anything else.
This means you will really be treated as a local from day one and just a small racist minority will really care about your background. But it also means as a double edged sword that if people perceive that you reject this identity, they will think that you are rejecting the society and will react negatively.
The black friend was not allowed in a club that we were and had two instances I saw in different bars of overt racial comments from strangers in the short time we were drinking together. It was weird.
He came back to the next day with a beat up face and a story of some horrible events that unfolded shortly after I'd went to bed.
This guy was dressed like us and in school to be a lawyer. He wasn't loud or anything you might think that might draw attention to him other than his skin color.
Growing up in the states and living in a few cities in Europe and in traveling, I'd never seen anything like this in my life.
N=1 and all that but it was truly bizarre.
I'm not going to pretend we're perfect. You'll find racist people everywhere. Just, the farther up north you go, the more likely you are.
It's just focused strongly on integration instead of being focused on multiculturalism like in the anglosphere. And you really need to understand that because US values don't apply.
Imagine if native americans were still around and you immigrated to the United States or Canada. Chances are the statues, official languages, culture (music etc.), food and mindset would be heavily influenced by the native american population.
Although English/French/Spanish might be accepted languages, it would be a constant fight and constant reminders that you kinda don't belong here and you have to "integrate" i.e give up parts of your culture and who you are.
I don't know if multiculturalism is better than integration; there are advantages to having a diverse society but also a cohesive high trust society.
However, in France and most of Europe, no matter how much you integrate you will never be "native". Or in French, "Francais de souche". Your skin color, your last name, your accent will stick out and you will be treated differently.
Again, not like in Asia where you might as well be a second/third class citizen. But enough, to make you feel like you don't belong and you're always a foreigner... no matter how much you "integrate".
In contrast, even with all the racism around Brexit, one of them loved living in London and would sing praises of the inclusiveness he felt in and out of office.
The model is simply due to how the country was created (a cosmopolitan group of very different cultures that had to find a way to form a unified country), but I don't know how sustainable it is in our modern days.
Based on what are you comparing here?
Literally the biggest lie I read here for a long time. Yeah France is so racist that 20% of the population is of foreign non-white ancestry, nationality is easy to get (notably got automatic if botn on national soil), no welfare programs discriminates on nationality basis, illegal aliens are rarely expelled (being sentenced is not more automatic ground for it), there is laws forbidding criticizing immigration, land are given for cheap to build foreign religious buildings, etc. If anything France isn’t putting it’s original citizens first enough. The super high tax rates explained elsewhere is in great part used to fund immigrants life.
Also from the point of view of most French, the important thing is speaking good French and integrating well with our culture, regardless of skin color.
Most of the French immigrants are from erstwhile French colonies like in the case of Britain, racism and exploitation of their homelands didn't stop them from moving to seek better life.
It turns out it is surprisingly difficult to find pointers to sites and podcasts if you speak French, but do not live in France. The internet is really good at keeping us in our bubbles, making a lot of assumptions on geolocated IPs.
As a side note, I will add that there is one thing that is somewhat problematic about the French business culture, namely that French companies will really go out of their way to deal only with other French companies. It is very difficult to do business with France because of this. It does help if you speak fluent French, but even then, unless you are a French business, you are at a big disadvantage and your product needs to be really much better than the competition. I guess in the case of the OP this worked well, because the business was based in France after all.
>It turns out it is surprisingly difficult to find pointers to sites and podcasts if you speak French, but do not live in France. The internet is really good at keeping us in our bubbles, making a lot of assumptions on geolocated IPs.
If you have a good level in french, I would advise you to listen to France Culture. I think the programmes are quite good, I personally really liked the audio series, for instance "L'incroyable expédition de Corentin Tréguier au Congo". Another interesting programme of this summer is the ongoing interviews with "modern mercenaries/privateer" [3]
[1] https://www.franceculture.fr/emissions
[2] https://www.franceculture.fr/emissions/lincroyable-expeditio...
[3] https://www.franceculture.fr/emissions/le-monde-des-espions-...
PocketCast, and I assume a lot of other podcast apps, let you change your country in the settings when you are browsing for new podcasts to listen.
https://www.gov.uk/limited-company-formation/register-your-c...
Obviously things get more complicated once you start hiring other people but the government does a good job of trying to streamline things compared to France.
Well, actually I didn't do anything because you literally have nothing to do. You just have the right to do some business on your own (but of course there are official companies of you want to get bigger).
Just when you start getting money, you have to inform the tax office, so they can give you the form next year.
Honestly, it wasn't so hard, and I can honestly say that I made it a little easier. The hardest part was taxes, and the honest solution is "hire a tax advisor, pay 300€ a year, be done with it".
The biggest problem for me is the cost of health insurance. As a self-employed person, you pay double. I pay 850€ a month in health insurance, and 550€ a month in rent. The fix is to switch to private health insurance, but that has its own caveats.
Here's an overview of what must be done: https://allaboutberlin.com/guides/start-a-business-in-german...
https://allaboutberlin.com/guides/become-a-freelancer-in-ger...
What do you mean, pay double? If you mean that, with regular employment, your "employer pays half" - that is just an accounting trick and you actually pay all of it.
Ireland constantly pokes the tops of indexes that rank the ease of doing business across the world.
Current problems include the unattractiveness of using equity as a payment tool -- this only affects startups though.
Employing people: https://www.gov.uk/employing-staff (register with tax office, pay 13.8% of their pay over £166/w as national insurance. Very small employers don't have to register with PAYE: https://www.gov.uk/paye-for-employers
Usually you delegate that to some company like Sage.
Giving them shares or share options is potentially much more complicated, but by that point you'll retain an accountant for the purpose.
The big nightmares are visas (of any kind) and bank accounts. Small business banking doesn't have "consumer protection", and can come with all sorts of fees and predatory lending practices.
Next level would be incorporating. The process is easy. Can be done online in a few minutes.
Taxes become more complicated. For a small one to three person company expect to pay about 2-5K annually to a professional accountant.
Corporate tax rate is 15% under 500K of revenue in Ontario. It varies province by province. Quebec as I understand is higher and also more complicated as they have their own tax system separate.
Keep in mind thought that "starting" the business is one thing. How easy it it to find investments, opportunities and make it sustainable is a different question.
My suggestion to add to your French podcasts list:
Tête à Tech - https://teteatech.fr/
This is my favorite podcast about technology by Awa Ndiaye and Jeremy Lezac.
Enjoy the croissants.
https://docs.google.com/spreadsheets/d/1wLPGB2BdRxHWbdOXXtKA...
First row countries like France or Germany are start up hostile.
In Japan, it is "Fairly" easy, provided you know Japanese and Japanese Culture.
For "hostility" a-lot of it comes under not knowing how to do things the Japanese way and finding an office location. Though there are government city sponsored incubators.
Mostly though, it's an excuse to just pay money to get a visa and residency, that can turn permanent.
Try the same comparison with say, Seattle.
If France really wanted foreigners to start companies there why wouldn't they make the tech visa as close to free and frictionless as possible?
Some of these incubators are gaming the system to make money. I'd not be surprised if they are giving these approvals to people who should not be eligible (ie: people not interested in starting a startup).
Also, does France have similar to Permanent Residency in other countries? How long do you need to live in France before you can obtain a status that allows you to stay, live, and switch employers in France and does not depend on keeping your job?
https://news.crunchbase.com/news/lessons-from-2008-how-the-d...
https://mattermark.com/2007-2009-financial-crisis-surprising...
ps: UK/Hong Kong have similar programs.
You can't just fire someone because its illegal to do so. You can't just hire a bunch of people quickly because people dont switch jobs as often. The team can't work 80 hrs a week because that isn't allowed either.
It’s typically 2 weeks in the US and that’s more a nice to have than a requirement.
