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How I got the French Tech Visa to start my company in France

154 points| christpetron | 5 years ago |christianpetroske.com

203 comments

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[+] Uberphallus|5 years ago|reply
Honestly, this reads as those books titled "How to make money selling books on Amazon".

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.

[+] bouzouk|5 years ago|reply
Living in Paris for a very long time and having started a few businesses (current one: a challenger bank with 20+ employees), I don’t relate to anything you are saying.

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?

[+] belzebalex|5 years ago|reply
Yeah, as a French I can only completely agree. The amount of paperwork is just absurd. For instance, 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. That's just plain racket, and that kind of things is everywhere.

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.

[+] dtoma|5 years ago|reply
I wish we could get some info from an expert on that topic, as a French person some of my friends said they were surprised how much help they got from the government (grants, tax rebates, etc.) and they ended up doing all their software development in France, while the hardware was built in China, because they found the dev quality/cost ratio was so good.

There's also money you can get for creating a startup if you volunteer when your company does a round of layoffs for example.

[+] tasogare|5 years ago|reply
French here. This is very true. The whole economic incentives are made for big CAC40 companies whose owners/CEO are friends with the lawmakers. The small and medium companies, as individuals, are the most taxed out there. If you own a company and paid yourself you had to pass through 4 layers or so of taxation.

> 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.

[+] yodsanklai|5 years ago|reply
> The amount of taxes a company has to pay and the amount of paperwork to do (or money to delegate it) is just absurd.

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.

[+] laurent92|5 years ago|reply
Tax data for a SASU company:

- 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€.

[+] julienfr112|5 years ago|reply
Yes, default rates are quite high in France, but there are also subsides : JEI (jeune entreprise innovante), CIR (credit impot recherche) and CII (crédit impot innovation) and surrely others that can give you back a huge part of the taxes you pay. It's a PITA to fill, it keeps civil servants busy but hey, it can bring you tax and cotisations sociales (retirement / health) very low !!
[+] hrktb|5 years ago|reply
> otherwise literally more than half of the salary is gone in taxes.

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.) ?

[+] raverbashing|5 years ago|reply
> The amount of taxes a company has to pay and the amount of paperwork to do (or money to delegate it) is just absurd.

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)

[+] ciconia|5 years ago|reply
Why should a startup get a better deal than an independent plumber, or a farmer? You pay your taxes like everybody else, and in return you get a more level playing ground, more solidarity, and a safety net in case you fail... (I'm also living in France).
[+] _0qft|5 years ago|reply
You're right, but one part of this is the cost of wealth redistribution. There is less social inequality in france than in the US. Healthcare and welfare are comfortable here. You have less problems of social inequality in general.

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.

[+] 908B64B197|5 years ago|reply
The French model of high taxes that can potentially be offset by subsidies and grants is an interesting one. I've heard stories of companies getting an employee early on who's sole purpose was applying for these grants and subsidies.

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.

[+] smonff|5 years ago|reply
Not worth mentioning that health care is free for everyone in france thanks to all the money employees "steal" from startup founders.
[+] NicoJuicy|5 years ago|reply
> The only way a small tech company can make any money and be sustainable

Counter argument: A lot of startups in the US that IPO'd and still don't earn money is absurd as well

[+] ldng|5 years ago|reply
Yet hundreds of companies are created every year.

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.

[+] victor106|5 years ago|reply
From what a few of my colleagues told me: France is very racist. Apparently this is true in most of Europe. Everything looks okay on the surface but they are deep racial undertones. They tell me that believe it or not America is the one of the least racist countries. It does not mean there’s no racism in America just that it’s lesser.

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?

[+] ttwy2020|5 years ago|reply
As an immigrant who has been living in France (Paris) for 7 years, I didn't personally experience any racism, on the contrary, my collegues, neighbours and strangers, all treat me respectfully as I would treat them.

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.

[+] throwaway13337|5 years ago|reply
My experience in Lille, France would concur with that. Never had I seen such blatant racism as I did when I went out for the night with another white (swede) and a black friend.

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.

[+] realusername|5 years ago|reply
I would say the opposite after done some traveling, it's honestly one of the best countries when it comes to racism. There are very very few countries in the world where you can just arrive there and be treated as local from day 1, even in Europe.

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.

[+] jwr|5 years ago|reply
Please write a blog post with a more complete list of podcasts that you listen to and sites that you read!

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.

[+] bondant|5 years ago|reply
> Please write a blog post with a more complete list of podcasts that you listen to and sites that you read!

>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-...

[+] jclos|5 years ago|reply
> The internet is really good at keeping us in our bubbles, making a lot of assumptions on geolocated IPs.

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.

[+] maxmouchet|5 years ago|reply
We often hear stories on how hard it is to start a business in France. As a French, I'd like to hear how easy it is in other countries (UK, US?). For example, what are the costs, the amount of paperwork...
[+] Seb-C|5 years ago|reply
Did that in Japan (I'm talking about the sole proprietorship and already have a working visa here, so it's not exactly the same situation).

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.

[+] nicbou|5 years ago|reply
I have done it in Germany. I had to register my website as a business, and documented how to do it on that same website.

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...

[+] s_dev|5 years ago|reply
In Ireland you can incorporate a company in three days for about €30. You're only expected to start filing taxes when revenue crosses some reasonable threshold like €10k. Taxes are low and there are many grants available from the gov if you plan on hiring.

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.

[+] pjc50|5 years ago|reply
UK company incorporation is especially easy; you use the templates, give them a bunch of personal information, and pay £12. There's an annual filing fee of about the same amount, and for small companies the accounting requirements are very simple.

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.

[+] moltar|5 years ago|reply
In Canada to become self employed is basically processless. You just file personal taxes as usual. They get slightly more complicated with deductions and such though. But many people do self employed taxes themselves.

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.

[+] dudul|5 years ago|reply
In the US, it's hard to answer because it will depend on the state where you incorporate. Usually you can do everything online and would venture that it would cost maybe ~$200 on average.

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.

[+] seapunk|5 years ago|reply
Hi Christian, welcome to France.

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.

[+] not_a_moth|5 years ago|reply
Thank you for sharing these details, however what you've described seems to fall under "visa abuse" in eyes of developed countries who offer startup visas... mocking up something one weekend in order to go live in the country certainly goes against the spirit of these visas.
[+] therealmarv|5 years ago|reply
Don't. There are so many other countries with great programmers in Europe. I would go with Bulgaria or Romania when EU is a requirement. Otherwise I would go to Georgia (the country).

First row countries like France or Germany are start up hostile.

[+] rootsudo|5 years ago|reply
I'm debating doing something similar for Japan. It's always nice to read how it is around the world.

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.

[+] fredo|5 years ago|reply
Well I lived in US and created a company in Paris. US administration didn't look simpler to me... Tax in NYC were huge and it didn't include the schools for my kids. If you're 18 yr old and care only about your own needs, go to US (if you can get a visa, remember trump don't like foreigners and 401k). France is better when you want a family or life conditions of a rich country.
[+] refurb|5 years ago|reply
NYC is arguably the highest taxes locale in the US.

Try the same comparison with say, Seattle.

[+] rmason|5 years ago|reply
I'm intrigued on how it's just the opposite of the United States. Here if you get accepted into an incubator they pay you. In France you pay them!

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?

[+] csomar|5 years ago|reply
See my comment over here: https://news.ycombinator.com/item?id=24233291

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).

[+] smnrchrds|5 years ago|reply
French Talent Passport has streams for employees as well as founders. Does anyone know what happens if you use the employee stream and then lose your job, e.g. because the company who hired you has gone under? Do you have to leave France immediately, or is there a grace period for you to find another job?

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?

[+] ttwy2020|5 years ago|reply
I have the Talent Passport as an employee, and my first company went under. I was lucky to find another job before quitting, but generally, there is no obligation to "leave France immediately".
[+] lifeisstillgood|5 years ago|reply
I suspect my first question is - does it matter now, post-COVID. Is there any investment money out there still? If I get a visa, have a plan, is there anyway to raise enough money to even keep me in baguettes?
[+] csomar|5 years ago|reply
tl;dr: France made a program where they defer idea/talent assessment to third-party "incubators". Some of these guys are now taking the opportunity to give you the approval for a "fee". That's around 5.000 euros.

ps: UK/Hong Kong have similar programs.

[+] x87678r|5 years ago|reply
Taxes and paperwork in France (and Europe) really doesn't sound that bad to me. What does sound very different are the labor laws.

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.

[+] amarka|5 years ago|reply
What's worse is that I heard rumors they don't allow slave labor either. Labor laws, ugh, they're the worst.
[+] refurb|5 years ago|reply
The one that got me was an employee needs to give 3 months notice that they are quitting.

It’s typically 2 weeks in the US and that’s more a nice to have than a requirement.