Setting up on your own is a dream for many people, but it can be difficult to leave the security of a regular pay-packet.

But if you’re in France, you could be entitled to financial aid when you are getting your new enterprise off the ground, giving you a cushion that will allow you to pay the bills and focus all your energy on establishing yourself.

There are, however, some conditions and the system itself is quite complicated.

Here’s how it works: 

What?

The Aide au retour à l’emploi (ARE) system means you can leave your job and have a go at something new while receiving monthly payments from Pôle Emploi (the unemployment office).  

You claim the standard chomage (unemployment benefit) and whatever income you make from your new business or freelance enterprise is deducted from the monthy payment, so that in total your monthly income would be the same as if you were unemployed. This can continue for up to two years.

In France benefits are worked out based on your former salary, so the amount you get depends on what you were earning previously.

Who?

This is only available to people who have previously been salaried employees in France.

It’s not limited to French citizens only, but you need to have been an employee, which means you must be a full-time resident in France with a visa/residency card if appropriate.

You must have worked for a minimum of 88 days (or 610 hours) in the last 28 months.

How

There are quite a few conditions attached to this and it’s complicated so if you’re thinking of doing this, it might be a good idea to go in advance to your local Pôle emploi office and check that you fulfill all the criteria.

The key thing is the manner in which you leave your job. 

Normally, you wouldn’t qualify for benefits if you voluntarily resign, but there are some exceptions to this:

• You have to follow your spouse after he/she moved to another region for professional reasons
• You are obliged to move because you are the victim of domestic violence
• Your employer has not paid you for several months
• You are a victim of moral or sexual harassment or assault at work
• You have a serious and credible plan for changing careers

It’s the last one of these that affects people setting up on their own, and the plans must be “serious and credible” – so you will definitely need a proper business plan in place.

The next thing to do is to approach your employer and request a rupture conventionelle.

What is a rupture conventionnelle?

This is for workers who are on a CDI (a long-term contract). It does not apply to the CDD (short-term contracts), stage (internships) or alternance (work-study arrangements).

You and your employer make the decision to part by mutual agreement – it’s the equivalent of a ‘no fault divorce’ and unlike dismissal or a resignation, what matters is that both of you agree to the terms and any compensation.

There are certain advantages to an employer of a rupture conventionelle – they are not required to make any kind of payment as in a redundancy situation and by agreeing to this you sign away your right to compensation for unfair dismissal.

However the employer still has the right to refuse.

Next step

Assuming your employer agrees, you will sign a contract setting the terms of the rupture conventionelle and you will be given documents such as a certificate of employment, a form filled for the attention of Pôle emploi and the total balance of your benefits and income earned over your period of employment.

You will need to show all these documents at the Pôle emploi.

The next step is registering for benefits.

You have to wait 7 days before you can register at the Pole emploi either online or in person in your local branch.

Once you have successfully registered using the rupture conventionelle – and informing your advisor that you want to take advantage of the ARE scheme – you will start receiving monthly benefits.

You must agree to inform Pôle emploi of all income related to your new business/freelance career and this is deducted from the payments your receive.

You can continue with this for two years, which should give you time to get yourself established in your chosen field while continuing to pay the bills and feed the kids/pets/yourself.

What else?

As well as registering with the benefits office, you will also need to register your new business.

For small businesses or individuals working freelance, the most common way to do this is through the micro-entrepreneur scheme – this offers a simplified regime for people or businesses earning less than a certain amount – full details HERE.

For freelancers there is also the EURL (entreprise unipersonnelle à responsabilité limitée) or the SASU (société par actions simplifiée unipersonnelle) which allow you to reduce the tax base by deducting charges without being subject to a limit on earnings.