Unemployed: how to become self-employed

The unemployment figures published each month by INSEE point to numerous difficulties in reducing the number of people out of work. After a significant drop in September, it rose by a further 0.2% in October 2017.

Just under 3,500,000 people are currently unemployed, representing 9.4% of the working population. At a time when companies don't really seem to be finding the oxygen they need to hire, the unemployed are increasingly turning to self-employment as a way of getting back into the workforce.

It is now possible to receive unemployment benefit on a temporary basis while working in a self-employed capacity.

How do I become self-employed?

A self-employed person is someone who creates an economic activity on his or her own account. 

Setting up a self-employed business is relatively straightforward these days. No qualifications are required, with the exception of certain professions requiring certification of competence.

Theauto-entrepreneur scheme allows you to benefit from a simplified tax, accounting and social security system. All you need to do is register online with URSSAF. There are no formalities to complete, and no capital or initial investment is required.

In practical terms, anyone can become an auto-entrepreneur! Setting up a self-employed business requires more formalities and criteria, and is not subject to the same accounting, tax and legal regulations.

This status offers great flexibility and freedom to unemployed people wishing to return to work.

Becoming self-employed: what are the conditions?

The conditions for becoming self-employed are as follows:

• To be a natural person;
• Setting up a sole proprietorship ;
• Carry out a craft, commercial or liberal activity.

Once these conditions have been met, you need to assess the development potential of your business with the help of a market study and a business plan.

Make sure you have the necessary funds to cover all start-up costs and any necessary investments.

The next step is to choose the legal status best suited to your type of business, such as an EIRL or SASU. The formalities to be completed then depend on the status chosen by the entrepreneur.

What advantages does the government offer?

It is possible to benefit from measures to ease the transition from unemployment to self-employment.

It is possible to keep part of your ARE (Allocation de Retour à l'Emploi - Return to Work Allowance) while receiving remuneration from your self-employed activity:

• If your self-employed activity does not generate any income, the ARE will be maintained in full.
• As soon as your business generates income, your ARE is partially maintained. The amount of ARE paid corresponds to the amount of the daily ARE multiplied by the number of days per month for which ARE is payable. If you're just starting out, or if your income is irregular, you'll receive a lump-sum payment, with an annual adjustment to follow.

To benefit from this scheme, your earnings must be lower than the average salary you received when you were working in the past (in this case, you need to calculate your daily reference salary). You can accumulate these benefits until you have exhausted your rights.

ACRE (Aide aux Créateurs et Repreneurs d'Entreprise) is a public scheme to help people set up or take over a business, open to all.

ACRE provides total or partial exemption from social security charges if your annual sales do not exceed the annual Social Security ceiling (PASS, i.e. €40,524 in 2019).

The ARCE scheme (Aide à la Reprise ou à la Création d'Entreprise) enables you to receive part of your unemployment benefit as a lump sum while you set up your new self-employed business. It cannot be combined with the ARE, so the entrepreneur will have to make a choice.

Emmanuel Macron's recent reform proposals aim to strengthen access conditions and security for self-employed workers by bringing them under the general social security scheme.

These measures should encourage many unemployed people to take the plunge and start their own business.

In 2015, almost one worker in 10 was working under this status. This type of activity should confirm its attractiveness thanks to the government measures announced for the coming years.