Freelance, which status to choose to get started ?

Once you have made the decision to become independent and start your freelance career, you will soon be faced with the thorny question : which status should I choose for my activity?

There is no perfect choice, each status has its own advantages and disadvantages and your choice will depend on :

Your project : is your freelance activity your main activity ?
How high do you estimate your income from your activity to be ?
Your need for social security coverage (problems related to retirement, income in case of work interruption…)
Are you eligible for unemployment benefits ?
Your personal situation: what is the tax situation of your household ?

Here, we have put together the information in a simple way to help you make your choice. If you still have doubts, we advise you to turn to an accounting service which often offers free assistance in choosing your legal status.

You should also know that you can change your legal status during the course of your business if necessary.

The companies

The micro-entreprise / auto-entreprise

The micro-enterprise and the auto-enterprise are two different names for the same status. It is the simplest and fastest status to set up. You can obtain this status online and in 48 hours. It is also the least expensive status with relatively low social charges and advantageous taxation.

You can benefit from this status if your revenue (CA) does not exceed 72 600 euros per year. However, if you exceed this amount, you can continue to benefit from this status for 1 year.

As an auto-entrepreneur, the social charges amount to 22% of your revenue (CA) and you can ask for the aid to business creators and rescuers (ACRE) the first year of exercise which will allow you to reduce these charges to 11%.

As far as taxation is concerned, you will be subject to income tax and will benefit from a 34% deduction.

Moreover, this status ensures you a VAT exemption (and thus frees you from VAT declarations) within the limit of 36 500 euros of revenue. Once this threshold is crossed, you will have to invoice and declare your VAT.

However, the auto-entreprise is the regime that guarantees you the least security and social protection:

The micro-social regime for self-employed people (SSI) is not equivalent to the general regime, so you hardly contribute to the complementary pension and the amounts of daily allowances paid in case of work stoppage are lower than on the other statutes
You cannot deduct your expenses (such as the Malt commission)
You cannot subcontract part of your activity.

Our advice :

Create your micro-entrprise at the beginning of a quarter will allow you to benefit from the ACRE over 4 full quarters (this aid is calculated on a quarterly basis)
Ask for the ACRE within 45 days after the creation of your company in order to benefit from it
In the case of a self-employed business, your unemployment rights are maintained. The sums generated by your activity will be subtracted from the allowance paid to you.
Choose a monthly declaration of your income if you receive unemployment benefit in order to simplify the procedures.

When you exceed the threshold of 72 600 euros of revenue more than two years in a row, your status will become by default a sole proprietorship with real expenses.

The entreprise individuelle with actual expenses

The entreprise individuelle is distinguished by its ease of opening and closing.

The costs are a little higher than in the case of a self-employed business with 45% of social charges on the profits (versus 22% of social charges on the revenue in a self-employed business). In case your company does not generate any profit, you will have to pay a minimum of 1 500 euros in social charges.

As of January 1st, 2023, you will also have to pay a 10% surcharge on your income tax or use the services of an approved management center.

In the context of a consulting activity, this status is not the most advisable because you will be limited in your tax optimizations despite slightly higher social charges.

Thus, if you exceed the threshold authorized by the micro-enterprise, the creation of a company may be more appropriate for your situation.

The Companies

The company is considered as a legal entity with a dedicated patrimony where your personal assets are not involved. Your liability is therefore limited.

When creating your company, you will have to deposit a capital minimum of 1 euro. For reasons of reliability, it is advisable to deposit between 500 and 1 000 euros. Once your company has been created and your Kbis has been obtained, this sum will be paid into your company’s account.

If you are receiving unemployment benefits and you do not pay yourself a salary in the context of your company, you can continue to draw these benefits.

Finally, you can deduct a certain number of operating expenses related to your company in order to optimize your income (rent, supplies, meals, travel…).

Two main types of companies are available to you as a freelancer : the SASU or the EURL. Once again, the choice of company depends on your project and your situation.

Within the framework of a company, you will have to pay two types of taxes

1. Income tax on :

the salary paid by your company
the dividends

2. Corporate tax on : the result of your company (= revenue – salaries – expenses – social contributions)

Depending on the company you choose, these taxes are more or less high on each of these elements…it’s all a question of strategy.

The SASU

The SASU is a one-man company that allows you to be affiliated to the general regime for your health and welfare coverage and to the supplementary pension for executives (AGIRC ARCO). You are then considered as an employee and have pay slips from your company. The social contributions on salaries are thus particularly high : 75% of the net salary.

The SASU can be particularly interesting if you have already been an employee and have already contributed to the general regime in order to continue to contribute normally for your retirement.

As far as taxation is concerned, you are subject to corporate income tax, which is indexed to the results of your company. This tax can range from 15% for results below 38 120 euros to 25% for results above this amount.

Finally (and this is where it gets interesting) you can pay yourself dividends. Within the framework of a SASU, these dividends are subject to two taxes :

the Flat Tax of 12.8% or the progressive scale of income tax with a 40% deduction
the CSG at a rate of 17.2%.

As you can see, if you choose a SASU, it is in your interest to pay yourself small salaries and larger dividends. However, be careful to pay yourself a salary in order to continue to validate your pension quarters and to have a minimum of social coverage.

Please note, however, that you will only be able to pay yourself dividends from your company once a year.

The EURL

With the EURL, you are affiliated to the social security system for independent workers and are therefore less protected (insurance, retirement).

Compared to the SASU, the social contributions on salaries are much lower : 45% of the salary.

Corporate taxes remain the same, between 15 and 25% depending on the results.

On the other hand, the dividends are much more taxed, i.e. 45% (compared to 17.2% in SASU) in addition to the income tax which benefits from the 40% deduction or the Flax Tax (12.5%).

In this case, it is in your interest to pay yourself a maximum salary and a minimum of dividends.

As a freelancer, there is one last option available to you : freelance administration (portage salarial).

The Portage Salarial

The portage salarial is a reassuring option but it has a cost. Once again, it is a question of finding the right balance between security and financial impact.

By going through freelance administration, you have the status of an employee with all the associated rights (unemployment, social security…), receive pay slips and therefore have no particular administrative steps to take.

You are now ready to choose your status to start the adventure of freelancing. If it is still not clear to you, if you hesitate or if you wish to create your company now, we can only advise you to be accompanied by an accounting service which will help you in this choice and in the administrative steps if necessary.