35 ms·

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 amou

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.

redis_mlc 6y ago
Also, some European countries require a pension deposit of a million euros per employee for new companies in case they go BK. There's a documentary on one European founder who built a factory and bought CNC machines for mfg., but couldn't afford the pension deposit, so couldn't hire any full-time employees. C'est dommage. :) I remember watching French art movies in Toronto in the 90's, and all the young characters worked for the phone company or the government.
belzebalex 6y ago
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.
- raverbashing 6y ago
  As the other commenter says, and I'll add: I think French people love complaining while continuing on their bubble 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.
  - lm28469 6y ago
    I'm French, French people are blind and most of them have no idea how easy it is to live in France compared to basically any other countries in the world. I guess it's a lack of perspective, anyone who spent any amount of time in eastern europe or in the US (places which aren't even that bad to begin with) would instantly see how lucky they are to live in France.
    - belzebalex 6y ago
      I agree with some of that. But we can only live like that in the short term. We're currently China-sponsored: just look at the size of our debt! The 2021 budget is half funded by debt! One day will come when we'll have to make aggressive cuts in our way of life because France won't produce anything anymore.
      - lm28469 6y ago
        Isn't it the same for most countries though: https://en.wikipedia.org/wiki/List_of_countries_by_external_debt https://en.wikipedia.org/wiki/List_of_countries_by_external_...
      - 6y ago
raverbashing 6y ago
> 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-in-france-101156/ 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 https://taxleak.com/france/?salary=100000 (though yes the employer needs to add some more to this value)
- nix23 6y ago
  > €157,806+: 45% That's the problem you see?
  - raverbashing 6y ago
    UK rates for comparison Personal Allowance Up to £12,500 0% Basic rate £12,501 to £50,000 20% Higher rate £50,001 to £150,000 40% Additional rate over £150,000 45% https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates
    - mjohn 6y ago
      That's a bit of a simplification. From £9.5k to £50k you pay 12% national insurance in addition to income tax, so it's really 32% not 20% tax. Over £50k you pay 2% national insurance. Your employer will also be paying 13.8% national insurance. Once your income exceeds £100k you start losing your personal allowance at a rate of £1 for every £2 over £100k, so you have no personal allowance after earning over £125k. This means that your effective marginal tax rate between £100k & £125k is about 60%
  - Qiu_Zhanxuan 6y ago
    reality check, 120k€/year already puts you in the top 1% of income earner in France. Past this point you should be satisfied with how much you've already earned and maybe starts caring more about the impact your job/company should have...
ldng 6y ago
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.
- Uberphallus 6y ago
  Yet hundreds of companies die, too. > 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.
  - Juliate 6y ago
    > The chauvinism is strong in this one. I'm in France, because I like things here. But startup culture isn't one of them. I think this depends a lot on where you are, and who you connect to, and whose judgement you value too. The mood felt very different to me between Paris intramuros, Paris suburb, Nantes, Bordeaux, Sophia, and even in each location, there are coexisting networks (installed businesses, "web" startups, industry ones, "marketing" ones, etc.) with different aims/cultures.
  - lm28469 6y ago
    > because I like things here Do you think it would stay the same without all the regulations you love to hate ? You can't complain about paying taxes and at the same time say you love France, 80% of the things that makes France a good country to live in are financed by taxes one way or another. Just look over the pond if you want to see how France would look without regulations, 1930 France is today's US in term of workers rights and social security. I'm sure it's perfect if you're in the top 15%, not so much otherwise
bouzouk 6y ago
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?
- BiteCode_dev 6y ago
  > 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? 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.
  - ldng 6y ago
    Is it fair to compare France to USA though ? In term of scale maybe comparing to Europe would be better. Are you both saying that you are "living on the startup scene" but don't see any startup ? Or any successful ones. On the top of my head I can already cite you Blablacar, CapitaineTrain, Dailymotion, Deezer as relatively successful for the French market ... Of course if you're looking for planetary mastodon as sign of success ...
hrktb 6y ago
> 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.) ?
julienfr112 6y ago
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 !!
- doukdouk 6y ago
  All this feels so wasteful, especially the CIR and formerly the CICE. Instead of having low taxes, you have nominally high taxes and a bazillion paperwork-heavy to make them low. Might as well just make them low in the first place.
  - realusername 6y ago
    Yeah that's my point of view as well on the French system, going after tax exemptions is almost a full time job since there are so many of them. And of course the companies who end up benefiting from those are most often the least deserving...
  - harha 6y ago
    I like the way Singapore keeps it simple by having tax exemptions and lower rates for the first $ X of income (and overall lower tax than most places in Europe), this is easy to work with and allows you to reinvest in ways you see fit rather than having to deal with a bunch of other entities from advisors to government agencies that all have their own agenda. Edit: corporate income that is.
    - refurb 6y ago
      I love how Singapore’s income tax calculator fits on a single page in excel. https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Individuals/Tax%20Calculator%20-%20Residents_YA20.xls https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Indi...
      - 6y ago
tasogare 6y ago
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.
- harha 6y ago
  Same in Germany, unless you hire full time lawyers and accountants you’ll end up burning a lot of money on these services, mistakes they make and all sorts of authorities.
dtoma 6y ago
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.
- opportune 6y ago
  Is there an easy way to find EU/specific countries’ available grants? Anecdotally I’ve also heard that grants are one of the key advantages to starting a business in the EU
laurent92 6y ago
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€.
- vladvasiliu 6y ago
  Although your calculation isn't quite correct (see below), non-French people should note something related to the way taxes are perceived to be in France and especially related to social security. As a freelance going with this scheme, you get basically nothing: * 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.
ciconia 6y ago
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).
- 908B64B197 6y ago
  Because one of them scale and can be exported and the other doesn't? Also if a startup ends up getting VC funding in an other country it can move there unlike a farm or a plumbing business.
_0qft 6y ago
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.
yodsanklai 6y ago
> 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.
- non-entity 6y ago
  You're amused to see French people have strong opinions on their own nations' politics?
  - yodsanklai 6y ago
    Being French, I'm amused to see on HN the same stereotyped arguments and exaggerations we hear over and over in the local left/right debate.
  - Juliate 6y ago
    Well, we're not French for nothing. :p
- mardifoufs 6y ago
  It's crazy to see how defensive some people get! Especially when any criticism of EU countries gets brought up. I get that some of the criticism is unwarranted. But as an outsider with intimitate knowledge of both europe (france in particular) and north america, it's just mind boggling to see the difference between the HN/online discourse and reality. 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.
NicoJuicy 6y ago
> 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
908B64B197 6y ago
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.
- jobigoud 6y ago
  I can confirm. At my previous job we were about 20 employees and we had one person dedicated to this. Grants for R&D, so her work was to make the paperwork explaining and documenting why it was R&D. Also there was another gov help to pay half the salary of employees for which it was the first job after their thesis or something along these lines.
  - 908B64B197 6y ago
    Wow. The inefficiency of having to dedicate an employees to that paperwork (and probably the same manpower on the government side to receive it and take action) make it sounds like a welfare/job program. Would be way more efficient to simply drop the tax rate and make these 2 positions redundant, freeing more money for actual R&D. The post-thesis bit is interesting: How is it the taxpayer's job to finance that? I get funding the thesis themselves but why should a company get funding for hiring someone who completed one? Shouldn't the thesis make the employee more valuable thus negating the need for this welfare?
    - jobigoud 6y ago
      Also she was conducting "interviews" with us to assess better what was and what wasn't R&D in our tasks, so once in a while we would spend an hour not doing any productive work. Yes post-thesis are more valuable, including to other countries. I think it is an incentive to the employer so they can increase the compensation in order to limit brain drain.
smonff 6y ago
Not worth mentioning that health care is free for everyone in france thanks to all the money employees "steal" from startup founders.

redis_mlc 6y ago

Also, some European countries require a pension deposit of a million euros per employee for new companies in case they go BK. There's a documentary on one European founder who built a factory and bought CNC machines for mfg., but couldn't afford the pension deposit, so couldn't hire any full-time employees. C'est dommage. :) I remember watching French art movies in Toronto in the 90's, and all the young characters worked for the phone company or the government.

belzebalex 6y ago

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.

raverbashing 6y ago
As the other commenter says, and I'll add: I think French people love complaining while continuing on their bubble 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.
- lm28469 6y ago
  I'm French, French people are blind and most of them have no idea how easy it is to live in France compared to basically any other countries in the world. I guess it's a lack of perspective, anyone who spent any amount of time in eastern europe or in the US (places which aren't even that bad to begin with) would instantly see how lucky they are to live in France.
  - belzebalex 6y ago
    I agree with some of that. But we can only live like that in the short term. We're currently China-sponsored: just look at the size of our debt! The 2021 budget is half funded by debt! One day will come when we'll have to make aggressive cuts in our way of life because France won't produce anything anymore.
    - lm28469 6y ago
      Isn't it the same for most countries though: https://en.wikipedia.org/wiki/List_of_countries_by_external_debt https://en.wikipedia.org/wiki/List_of_countries_by_external_...
    - 6y ago

raverbashing 6y ago

> 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-in-france-101156/ 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 https://taxleak.com/france/?salary=100000 (though yes the employer needs to add some more to this value)

nix23 6y ago
> €157,806+: 45% That's the problem you see?
- raverbashing 6y ago
  UK rates for comparison Personal Allowance Up to £12,500 0% Basic rate £12,501 to £50,000 20% Higher rate £50,001 to £150,000 40% Additional rate over £150,000 45% https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates
  - mjohn 6y ago
    That's a bit of a simplification. From £9.5k to £50k you pay 12% national insurance in addition to income tax, so it's really 32% not 20% tax. Over £50k you pay 2% national insurance. Your employer will also be paying 13.8% national insurance. Once your income exceeds £100k you start losing your personal allowance at a rate of £1 for every £2 over £100k, so you have no personal allowance after earning over £125k. This means that your effective marginal tax rate between £100k & £125k is about 60%
- Qiu_Zhanxuan 6y ago
  reality check, 120k€/year already puts you in the top 1% of income earner in France. Past this point you should be satisfied with how much you've already earned and maybe starts caring more about the impact your job/company should have...

ldng 6y ago

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.

Uberphallus 6y ago
Yet hundreds of companies die, too. > 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.
- Juliate 6y ago
  > The chauvinism is strong in this one. I'm in France, because I like things here. But startup culture isn't one of them. I think this depends a lot on where you are, and who you connect to, and whose judgement you value too. The mood felt very different to me between Paris intramuros, Paris suburb, Nantes, Bordeaux, Sophia, and even in each location, there are coexisting networks (installed businesses, "web" startups, industry ones, "marketing" ones, etc.) with different aims/cultures.
- lm28469 6y ago
  > because I like things here Do you think it would stay the same without all the regulations you love to hate ? You can't complain about paying taxes and at the same time say you love France, 80% of the things that makes France a good country to live in are financed by taxes one way or another. Just look over the pond if you want to see how France would look without regulations, 1930 France is today's US in term of workers rights and social security. I'm sure it's perfect if you're in the top 15%, not so much otherwise

bouzouk 6y ago

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?

BiteCode_dev 6y ago
> 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? 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.
- ldng 6y ago
  Is it fair to compare France to USA though ? In term of scale maybe comparing to Europe would be better. Are you both saying that you are "living on the startup scene" but don't see any startup ? Or any successful ones. On the top of my head I can already cite you Blablacar, CapitaineTrain, Dailymotion, Deezer as relatively successful for the French market ... Of course if you're looking for planetary mastodon as sign of success ...

hrktb 6y ago

> 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.) ?

julienfr112 6y ago

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 !!

doukdouk 6y ago
All this feels so wasteful, especially the CIR and formerly the CICE. Instead of having low taxes, you have nominally high taxes and a bazillion paperwork-heavy to make them low. Might as well just make them low in the first place.
- realusername 6y ago
  Yeah that's my point of view as well on the French system, going after tax exemptions is almost a full time job since there are so many of them. And of course the companies who end up benefiting from those are most often the least deserving...
- harha 6y ago
  I like the way Singapore keeps it simple by having tax exemptions and lower rates for the first $ X of income (and overall lower tax than most places in Europe), this is easy to work with and allows you to reinvest in ways you see fit rather than having to deal with a bunch of other entities from advisors to government agencies that all have their own agenda. Edit: corporate income that is.
  - refurb 6y ago
    I love how Singapore’s income tax calculator fits on a single page in excel. https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Individuals/Tax%20Calculator%20-%20Residents_YA20.xls https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Indi...
    - 6y ago

tasogare 6y ago

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.

harha 6y ago
Same in Germany, unless you hire full time lawyers and accountants you’ll end up burning a lot of money on these services, mistakes they make and all sorts of authorities.

dtoma 6y ago

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.

opportune 6y ago
Is there an easy way to find EU/specific countries’ available grants? Anecdotally I’ve also heard that grants are one of the key advantages to starting a business in the EU

laurent92 6y ago

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€.

vladvasiliu 6y ago
Although your calculation isn't quite correct (see below), non-French people should note something related to the way taxes are perceived to be in France and especially related to social security. As a freelance going with this scheme, you get basically nothing: * 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.

ciconia 6y ago

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).

908B64B197 6y ago
Because one of them scale and can be exported and the other doesn't? Also if a startup ends up getting VC funding in an other country it can move there unlike a farm or a plumbing business.

_0qft 6y ago

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.

yodsanklai 6y ago

> 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.

non-entity 6y ago
You're amused to see French people have strong opinions on their own nations' politics?
- yodsanklai 6y ago
  Being French, I'm amused to see on HN the same stereotyped arguments and exaggerations we hear over and over in the local left/right debate.
- Juliate 6y ago
  Well, we're not French for nothing. :p
mardifoufs 6y ago
It's crazy to see how defensive some people get! Especially when any criticism of EU countries gets brought up. I get that some of the criticism is unwarranted. But as an outsider with intimitate knowledge of both europe (france in particular) and north america, it's just mind boggling to see the difference between the HN/online discourse and reality. 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.

NicoJuicy 6y ago

> 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

908B64B197 6y ago

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.

jobigoud 6y ago
I can confirm. At my previous job we were about 20 employees and we had one person dedicated to this. Grants for R&D, so her work was to make the paperwork explaining and documenting why it was R&D. Also there was another gov help to pay half the salary of employees for which it was the first job after their thesis or something along these lines.
- 908B64B197 6y ago
  Wow. The inefficiency of having to dedicate an employees to that paperwork (and probably the same manpower on the government side to receive it and take action) make it sounds like a welfare/job program. Would be way more efficient to simply drop the tax rate and make these 2 positions redundant, freeing more money for actual R&D. The post-thesis bit is interesting: How is it the taxpayer's job to finance that? I get funding the thesis themselves but why should a company get funding for hiring someone who completed one? Shouldn't the thesis make the employee more valuable thus negating the need for this welfare?
  - jobigoud 6y ago
    Also she was conducting "interviews" with us to assess better what was and what wasn't R&D in our tasks, so once in a while we would spend an hour not doing any productive work. Yes post-thesis are more valuable, including to other countries. I think it is an incentive to the employer so they can increase the compensation in order to limit brain drain.

smonff 6y ago

Not worth mentioning that health care is free for everyone in france thanks to all the money employees "steal" from startup founders.