Auto entrepreneurs could be forced to switch to a different business regime after a set period of time under new rules being introduced in France by the minister responsible for small and medium sized businesses.
Fleur Pellerin has announced that the auto entrepreneur regime could be limited in time from one to five years and that a decision on the length of time is likely to come this summer.
Her plan involves allowing an auto entrepreneur with a business income that amounts to less than 50% of their overall income to remain under the regime with no limitation in time. But those who operate full time under the regime would have to switch.
It is also not clear if new auto entrepreneur limits will be retroactive and details are still sketchy. According to business advisors and accountant this could only mean having to move to a more expensive business type such as entreprise individuelle under rÃ©gime reel simplifiÃ© or starting a limited company (SARL or EURL).
Representatives of those registered with the auto entrepreneur system in Normandy have been in touch with Pellerinâ€™s office to try to ensure the main benefits and strengths of the scheme are not watered down.
Critics have said that the system allows people to work on the black and not declare money received, with business owners registered through the existing systems claiming they face unfair competition.
With around 900,000 businesses registered as auto entrepreneurs in France any changes are likely to have a real impact. Business advisors are concerned that some small businesses may have to stop if they are forced to quit the auto entrepreneur scheme.