If I’m a telecommuting employee of a U.S. company (that I own or otherwise), where that company pays me through direct deposits into my U.S. bank account, and I decide to move to France and work from my home there (as opposed to being sent to France by that company), does that action impose any requirements on that company, such as having to form a branch office in France and/or having to pay business taxes?
I think if you are physically in France, living there in a place you own ir rent, while you do your work, then the fisc will be interested, one way or another. You should talk to a specialist, especially seeing the other country involved is the US.
Obviously if you are just in holiday in France and check in to your office abroad and answer a couple of emails, that’s different.
Yup. If a company has an employee permanently working in France - whether or not that person is resident - then that company must register with French Social Security and pay the relevant dues. Precisely what they are I don’t know, I just know they exist.
An the employee must also pay depending on whether fully resident or not.
There are a couple of exempt categories, like film actors here temporarily, but otherwise things are mandatory.
Take professional advice from someone experienced and reputable in French-US employment law and business structures. French labour laws are very strict and penalties for getting it wrong are severe. Including expulsion from the country.
So don’t believe anyone who says you can get away with winging it on tele-working it and no-one will notice. Maybe they won’t, but if the authorities do pick up on it then could be a can of worms you do not want to open. And if you want to apply for residency you have to say where your income comes from, so it will be obvious.
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My particulars are that I have a U.S. startup that hasn’t launched its service yet, and plans to later this year. It’s a Nevada LLC that’s set up with the IRS to be taxed like a pass-through S-Corp, meaning that the business won’t be taxed, but instead, the owners will be taxed as individuals when they take draws from the profits. When the company takes off, it will pay me a salary, as required by U.S. law, for managing the company.
The service is web-based, so even if I’m managing the company from France, I don’t know if there would be any “income generated in France”, and therefore I don’t think it would have any French taxes to pay. I’m wondering if my best option is to form a French branch office. I read that as a manager of a French branch office, I’d be subject to the U.S. labor laws, not France’s, and I’m not sure what that means. I’d still need to pay taxes on the salary I’m paid, and any draws taken from profits. I’m just wondering if this would be ideal for tax purposes.
I know this is a rather different topic, but I also need a visa. I want to eventually become a permanent resident or citizen. I read on a couple of blogs that a tourist/visitor/retiree visa cannot lead to permanent residency or citizenship, but it isn’t clear to me why that is (or if it’s correct). I wonder if a commerçant visa would be best.
I value your thoughts.
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My particulars are that I have a U.S. startup that hasn’t launched its service yet, and plans to later this year. It’s a Nevada LLC that’s set up with the IRS to be taxed like a pass-through S-Corp, meaning that the business won’t be taxed,
This means precisely nothing to me. You really shouldn’t be asking a bunch of online randoms for information regarding a very precise individual situation, but talking to someone whose job it is.
Work in France, live in France = pay taxes in France.
Apart from a few exceptions, if your backside is in France when you are carrying out the work that earns the income then you pay taxes in France. Like the US, France has its own (sometimes draconian) labour laws so if you want to live and work here then you need to accept that you will have to follow the laws of the land.
But as said before you need professional advice. I know that the nearest equivalent to an LLC in France is an EURL, but beyond that can’t help.
As for visas. Generally for non-europeans you have to get a visa D before you leave your own country, and then apply for a carte or titre de séjour a couple of months after you arrive. If you have a higher degree (masters and above) and set up a serious business here you might qualify for a “passport talent” visa. Otherwise eligible reasons to get a visa are if you work for a french employer, set up as a “profession liberale” (doctor etc), are retired with sufficient independent wealth, or a recognised artist.
Then after 5 or 10 years you qualify for permanent residency and are then eligible to apply for citizenship which takes another few years.
You’re doing the very American line … massive US companies do it so don’t take it personally but it doesn’t really export very well. The moment you step off US soil someone else’s rules apply - US labor laws - US tax laws - whatever they don’t apply overseas.
Strip it down …
To start with you’ll require a Visa and that visa comes with conditions - which includes work. So understanding those conditions in order to get and maintain a Visa comes with the territory.
US tax/labour laws are utterly irrelevant once you leave the US.
If you returned to the US to do the work all fine - but thats not your plan. Even if you flew back worked and then returned to France - you’d still be subject to a French tax return and I have no idea on US-France tax treaties - but there may be social charges payable on income and that can be a hit.
You can simply become a posted worker - but France doesn’t recognise the arranagements you describe (it doesn’t recognise the way most UK small companies work/pay either) - so it means minimum wage to you - and then Social Charges on “profits” you take from the company
You could set up as an AE/ME - but that entity would have to pay French social charges and you’d pay tax on income. Especially not working under a Visa could you cross bill your own company. In this day and age with multi currency bank accounts you can still invoice US companies dollars. There are some rules re invoices in French - websites in French - but if you’re not trading in France (selling to French companies) there are ways to keep this painless.
But start with Visa conditions that chnage stuff no one here would have a clue about - the rest is the basic principles of overseas work.
You have to shift perception - France especially doesn’t see the world in the same way - be that good or bad. Remember France will “tax” you at eyewatering rates to an American - but healthcare and the safety net are somewhat greater so what you pay on one hand does come back in other ways. But its quite a shift in perception.
The worlds got smaller and technology allows some people to work from anywhere in the globe - that part is true - but there is a catch when it comes to everything else
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I know I will need to pay income tax and social charges on my personal worldwide income. I just don’t want my company to also have to pay taxes if that can be avoided.
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I think you need to ask a professional and I also think that you will be surprised to find how complex and expensive what you are suggesting will turn out to be.
Posted worker is pretty much the only way around that - but you really need to talk with an accountant who understand US-French treaties/laws. The thing to remember is you need a Visa - thats your first step - and right now its unlikely you’d get one given the plan.
The thing to remember/learn - France has long established codes for tax and other things. They are very French - business in France is set up with these in mind. The US is pretty much at the opposite end of the scale so its tax/buisness rules encourage a differant set up - for small companies thsoe rules are so differant it just doesn’t export.
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Good advice Chris. Massive American companies tend to have whole departments plus tax consultants looking after employees on assignment and/or working in multiple jurisdictions. In my own wanderings I’ve been shocked at the complexity involved for the backroom team and PWC and KPMG tax experts to keep me compliant. Not for the faint hearted.