[bouzouk]

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?

[user5994461]

Here's the taxes on French salaries for reference.

- 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.

[krstf13]

This is grossly inaccurate. What you're calling taxes, are fees that allow employee to get several benefits. Practically speaking, these are delayed salary.

They include social security, unemployment benefits, retirement benefits, training ...

When your employee is sick, they can stay at home without losing their pay, and without your company paying for it. They can seek medical treatment without risking bankruptcy.

If you have to lower you activity because business is bad, you can put in place part time unemployment, and your employees won't lose money in the process...

Also, the fees paid by the employer are often subsidised through eg tax credits, reimbursements (up to a certain amount)... So that these numbers are not only inaccurate but also totally meaningless.

[user5994461]

French has multiple words historically (impots, taxes, charges) with subtle differences in meaning. However they've not been observed strictly in a long long time. It's all money taken out of the employee pocket at the end of the day.

In English it's all translated to "tax" and rightfully so. English languages and cultures don't have subtle semantics like French does. For example everything in the UK is a tax, corporation tax, income tax, council tax, etc... (one exception being the UK national insurance).

[shard]

Same in the US. On my paycheck there are Social Security tax, Medicare tax, State disability insurance tax, State unemployment insurance tax. If it is a mandatory deduction taken out of your paycheck to fund a government project (not the best word, but can't think of the proper word at the moment), even if you get benefits later, it's called a tax.

[bgorman]

The US Government tries the same trick.

Social Security is a called an "insurance program" although it is completely unrelated to conventional insurance. The closest financial instrument is a Ponzi scheme, which is illegal under US law.

[jbn]

It is insurance in the sense that it pools the risk. The risk here is "aging" ("Social Security" in the US only covers base retirement, whereas "Social Security" in France covers 5 risks), it only happens to be a risk that realizes 100% of the time, unlike fire insurance for instance.

[krstf13]

Nope,that’s not correct. Even in English health insurance is not tax, unemployment insurance is not tax... And by the way what you call ‘charges’ is historically‘cotisations’ (fees).

[hansvm]

In my circle of acquaintances, the distinction lies not in what the money is funding (e.g. health care), but in where it's going:

Health coverage goes to some entity that isn't the government and is usually optional, so it's viewed as a benefit and taken into account when computing total compensation.

Unemployment insurance on the other hand is taken out of every paycheck and handed to the government without an opt-out. Yes, of course you get something for it; the whole point of taxes is that society gets something in return. They're still taxes.

[krstf13]

Also, you lie and move the goal posts. You really should say that you don’t wanna pay your employees. Fine by me, but be frank about it. I know I’ll be downvoted here, but the truth is this guy doesn’t want to pay his employees and pretends it’s because of additional costs that burden him. He’d rather give them more, if only they were able to spend responsibly. Yet, he doesn’t know the first thing about taxes, fees and lumps them together. I welcome disagreements, but I wish un readers were slightly more rigorous.

[hansvm]

I don't get that impression at all. The person you're replying to hasn't done anything more than try to clarify that whatever you want to call the cash being extracted by the French government, a reasonable person in other parts of the world could call it a tax and not miss any important defining characteristics.

With respect to claims of wanting to underpay employees, I don't think that's something anyone is actually arguing for when they talk about unfriendliness toward startups. The French government is levying a high _proportional_ tax to cover _fixed_ fees like health care. This can make sense at a societal level as a form of wealth redistribution, but it's a disadvantage for high earners like those in the software industry. Those employees can earn more in other countries with the same cost to their employers simply because less is taken out of their paycheck, and because the difference is more than enough to cover fixed fees like health care it's a good move for them to do so. The people being disadvantaged aren't startup employees (not passing a moral judgement -- the claim itself just seemed off).

[kelnos]

I think quibbling about terminology misses the point. If you think about it as the total cost per employee, it seems like a a lot that doesn't actually go directly to the employee as take-home pay. I think a lot of that is good, and replaces other external costs, but it's still a lot of extra money a small company will need to budget just to hire someone.

And things like tax credits are only useful if you have the cash on hand immediately, and can wait up to a year to get it back. A brand-new venture may not have that.

[xur17]

All of this is called "tax" in the US.

[athenot]

Not quite: health insurance is not called tax in the US, yet is a benefit under the French system with premiums paid by the employer.

[user5994461]

Not quite: An employer in France must provide a private health insurance plan to employees. It is paid out of the pocket of the employee and they can't refuse it.

France has good public health service but it's also pushing private health insurance down the throat of everybody through their employers, quite like the UK or the US. The large majority of the population has double coverage.

[lma21]

Charges patronales and charges sociales are not really "taxes" given your understanding of taxation.

Charges patronales and charges sociales are well explained in every payslip, i.e. where that money goes and how the employee/employer benefit from them.

Also, every person's net income tax is also explained and you can see where it goes.

At the end of the day, when a French person loses their job (even if they're a non-essential worker in any industry), they go home not worrying about a single damn thing... it's good to have such security, no?

[jbn]

You are right that Charges patronales and charges sociales are not really "taxes" , in fact some politicians (LFI and EELV come to mind) insist on calling it "socialized portion of the employee salary", which is a better description.

However doing this would cause a mind shift where the employees would realize how large a fraction of their compensation package is in fact retained by the government either in the form of taxes or in the form of charges. A positive outcome of this is that it would force this realization, since so many people think healthcare/education/pension are free...

Another aspect to this is that different corporations have been allowed to charge these Charges patronales and charges sociales at different rates (for instance nurses pay 14% for retirement, whereas the rest of the population pays 28%...). Worse an entire half of the workforce, namely all the civil servants, have no Charges patronales and charges sociales at all (in other words, the French state is a special employer that gets away with not paying for these, paying for the actual pensions out of its general budget rather than its stowed-away-for-later funds.... and when the French state goes bankrupt, it just needs to raise more taxes on the private sector employees to make payroll on its pensions!).

[kelnos]

I agree that it's great for the French worker (way better than how US workers are treated), but you have to also see how it's a disincentive for a French entrepreneur to create a new company, no?

[ldng]

It has been that way quite a few decades. Yet, people are still creating companies. So maybe it is harder than somewhere else but it is far from being the only problem you'll meet when creating a company.

[ldng]

The term "Charges" is not even legally correct. It is a way to give it a negative bias on purpose.

[jbn]

Yes. "Charges" translates to "load" or "burden" in English. Using that word makes it sound like it is only the employer that bears this burden, whereas it is very much >50% of the employee compensation package that is socialized (or mutualized, which may be a better word) towards health/unemployment/age insurance.

[BiteCode_dev]

> 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]

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 ...

[BiteCode_dev]

Those are not successfull start ups, those are companies that make money.

There are plenty in france.

The startup model assumes you use VC cash to drive explosive growth.

Bla bla car took 13 years to slowly becomes the average company it is, being covoiturage.fr before. Deezer barely makes a dent in spotify market despite the fact it was born before. Even french don't know about daily motion, it survives because of all the pirated content it contains. Captain train had a moment, and lost it. The oui sncf service has won. At least if you disagree, none of them scream "explosive growth" in my mind.

I'm not saying there are no successful startups. Meetic and free are examples of that in there times.

But there's not a lot of it. Next door, ledger was midly successful, and maybe kryll will do something if they manage to get binance on board and then add the forex to their targets, but I don't see a uber, stripe, dropbox, etc. anywhere.

[nerbert]

It’s very common for French people to negate the advantages of the system they live in. France makes it easy to start a company and find seed investment. Paperwork became very limited over the years. People who describe France as startup hostile country live in the past (15-20 years ago)

[throwaway4747l]

You're right, with the caveat that France as a country with a strong social safety net and the best healthcare system in the world© is also a thing of the past. We're on our way to become more like the US each passing day, make of that what you will.

[jbn]

w.r.t "best healthcare system in the world" there are only 2 countries that think this of their healthcare: France (because people think it's free... it is not) and the US (because mostly of the quality of emergency medecine IMHO). Of course both are wrong, and it is a meaningless contest anyway.

[AlchemistCamp]

So, let's say you're bootstrapping a new business and earning 1500€/month as a solo operator with no employees. How much does the overhead of the endeavor cost you?

The costs are minimal in every country I've worked in so far, but I know it's different in others.

Would you at least be able to get started for under 500€ and live off of your income in France as long as you lived in a low cost area and didn't have family or medical expenses?

[jcelerier]

> So, let's say you're bootstrapping a new business and earning 1500€/month as a solo operator with no employees. How much does the overhead of the endeavor cost you?

If you are earning 1500€ per month you can just be a "micro-company" (this works up to 75k€ per year of gross income). You'll get taxed roughly 25% on that income, and have a fixed fee depending on the city you live - for me it's around 400€ / year for instance. Everything is done by internet, the only thing you have to do is report every month on the state website how much you earned last month, which takes roughly 30 seconds if you have proper accounting.

[AlchemistCamp]

400€ / year is very doable! That bodes well for France's future bootstrapped entrepreneurs.

[krstf13]

To add to what the parent wrote, depending on your situation (eg unemployment) when your creating your micro-company, you get a grace period (up to 2 years, I believe) during which your fees are substantially reduced. And the fees include social security, with (since recently) roughly the same benefits as regular employees (except for compensation of lost revenues in case of illness, which is more complicated).

[rihegher]

Something I never see anyone mention about France taxes is that the biggest your family is the less you'll pay income tax (living with a partner makes the better paid one pay less tax and you'll pay ever less for each kid). Plus you get money for each of your kids that get borned and then money to help you raised them for a few years. Plus you get financial help to get them in a nusery. In short France is a fiscal heaven for families.

[Uberphallus]

> not half of the salary

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.

[bouzouk]

I’m sorry but no: a 30k salary does not cost the company 80k! It costs around 41k, or 49k if you take into account employee taxes (here is a simulator from the French government: https://entreprise.pole-emploi.fr/cout-salarie/).

« Comité d’entreprise » are for 50+ employees and not 20.

What’s the use in throwing around fake numbers just to make your point?

Even if that sure must be a nice place to live, that is the first time I heard Sophia Antipolis being the « Silicon Valley of France » :) Yes France startup ecosystem is highly polarized around Paris. But hey, just like Silicon Valley right? That’s a very different problem.

[js4ever]

I just use the link you have provided, if you fill the last field (net salary after tax, what is really paid to the bank account of the employee) to 30k/year, the total cost for employer is 57,950€. And not 41k like you mentioned

[toto444]

30K net / year is a decent salary in France considering it you don't have to save for retirement, childcare is cheap, school is free, uni is free, health insurance is cheap and you don't have to save too much in case you are unemployed because the benefits are decent.

[davidivadavid]

Oh so some people still believe you don't have to save for retirement in France. The legend lives on.

[Uberphallus]

It was a typo, I meant 40k costs 80k, and according to the simulator it's 72k (company pays 72k, employee gets 40k). It doesn't include Syntec as collective agreement but I don't think the results would be much different. So my bad, but still not far off. This level of fiscal pressure is on par with Scandinavian countries, to put it in perspective.

That's absolutely bonkers for a startup that is actually starting, as there's little to no cash flow.

Note I'm not defending lowering taxes, but in other countries companies have exemptions and/or reductions according to company age, revenue or activity sector (e.g. https://business.gov.nl/subsidy/tax-relief-new-companies/). That encourages companies to actually have a chance to take off and continue paying taxes, rather than suffocate them from the get go.

In France, the most I've seen are reductions applicable to taxe fonciere for new company, which is a tax too small to even matter.

Of course, if you have the contacts willing to invest, my whole point is moot.

> that is the first time I heard Sophia Antipolis being the « Silicon Valley of France »

Come over and they won't stop telling you :)

[wink]

From what I heard France has strong worker protection laws, even stronger than Germany. Do you think this is/could be a problem for startups?

I am absolutely against the US way of just firing people, but I accept the realism of small businesses and startups where you -as en employee- simply can't take for granted that your job (or company) will exist in 5 or even 2-3 years.

IIRC in Germany we have exceptions for <10 employees, for example.

[smcphile]

> From what I heard France has strong worker protection laws, even stronger than Germany. Do you think this is/could be a problem for startups?

Yes, France has strong worker protection laws, but if someone is found to have been abusively fired there’s a cap on how much they can sue for. The amount is based on how long they’ve been with the company. For example, after 2 years, the amount is 3 months salary, after 5 years, 6 months salary. The complete table is here: https://droit-finances.commentcamarche.com/faq/54743-bareme-...

[pkaye]

If an employer has layoffs what kind of severance does the employee get?

[smcphile]

It depends, there's no simple, standard answer.

Layoffs in France correspond with the idea of a "licenciement économique" and the details of how that is managed are presented here: https://www.service-public.fr/particuliers/vosdroits/N481 .

Simply put, it's a negotiated process between the company, union representatives, and the government / legal representatives.

In France, layoffs are difficult to do if a company is making money, but can be done to keep a company from losing money or shutting down or moving somewhere else (i.e. another country).

[npsomaratna]

Out of curiosity, what's the challenger bank you started? I'd love to learn more.

[bouzouk]

Blank (https://blank.app) It’s a bank for freelancers and all self-employed workers. It’s launching in a few weeks ;)

[MayeulC]

Hmm, I could be in the market for a new bank a bit later, but what isn't clear on your website is whether the app is mandatory, or the functionality is available trough the web browser? (PWA or WASM binary would be OK, I guess?).

I'm using N26 right now, but I have since stoped using closed-source software altogether on my phone, and will likely switch full-time to a pinephone. One of the things that irks me is that multiple services require 2FA trough their proprietary app or SMS rather than TOTP or FIDO/Webauthn/other security-token based tech. Not sure if that's for legal reasons? In any case, that's my number one usability issue with other banks.

[bouzouk]

contact me ;) hackernews at blank dot app

[Nextgrid]

Any chance you can just put the answer here? I am not in the market for a bank right now but would like to know anyway. I think it would be valuable for a lot of readers if you just addressed his concerns publicly.