To begin… let’s talk about location?
When getting a business off the ground, choosing a location may seem a minor issue to some project leaders, but to others, finding the ideal space can feel more like an uphill battle.
The choice of location
It's actually decisive for two major reasons:
- the success of a business startup project largely depends on location as the location generates both interactions and opportunities (with customers, partners…)
- and leasing a space can be a substantial financial commitment depending on the type of business activity: it could mean signing on to pay rent for a long period of time (up to 9 years)
For activities that depend on the right of establishment (activities that require an “authorisation of establishment” from the Ministry of Economic Affairs), which could be of liberal, commercial, industrial or artisanal nature, it is important to ensure that your location is consistent with the requirements of the right of establishment.
The law dated 2 September 2011 recalls that premises chosen for business activities must be suited to the nature and size of the activity in question. For example, it would be hard to set up a restaurant in 30m²… though it would be more than enough space for a consulting business. Beyond those aspects, the level of security and accessibility of the premises is just as important, given that important business documents (accounting, HR management, etc.) are supposed to be store at the business headquarters.
Choose your location by ranking your options based on certain criteria. A few important elements from a strategic standpoint are:
- the type of zone (business, residential, etc.)
- your clientele
- your competition
- urban growth (future construction/development projects)
- the rent and/or investments required in the case of a transformation
- space configuration and technical facilities
And for you:
- your needs in terms of flexibility, if you are more nomadic or travel frequently
- your needs in terms of interactions with a community of entrepreneurs, if you are starting a business on your own and do not wish to be isolated
- your long term vision, if you hope to hire on a team and/or expand your business
Types of locations
Once you have determined the above criteria, you can start looking into your options: renting a dedicated desk in a co-working space, an office in a business center, a retail space with or without storage, a multimodal space with a specialized incubator, a restaurant space equipped with kitchen… You can check the website of the real estate board*1 for ads.
If you will be working in a technological field or a high-tech sector that requires specific material resources (3D printers, industrial halls, etc.) or specific expertise (competence center), consider looking into specialized incubators such as Technoport or Paul Wurth Incub.
Working from home: good or bad idea?
Though a great many entrepreneurs who work essentially with their brainpower have a natural tendency to opt for a home office at the time of launch (thus cutting back on expenses), there are a few things to check and some precautions to take first.
For homeowners, some tax considerations:
A tax credit (website in French) of up to € 20,000 can be granted on registration and transcription fees for the purchase of a private dwelling.
This tax credit is - among other things - linked to the purchaser's commitment:
• to personally occupy the building within 2 or 4 years (old property vs new property) from the date of the notarial deed and for an uninterrupted period of at least 2 years from the registration at the municipality
• not to assign it to any use other than personal residence during this period
• to reimburse the amount of the allowance in the event of non-compliance with the conditions
• to declare in writing to the AED, within 3 months, any transfer or any change in the use of the building concerned.
Once the duration of occupation has passed, the owners are free to dispose of their property as they see fit. In the event that a person wishes to use the property for professional use before the end of the 2-year occupancy period, they must contact the civil deeds office that registered the notarial deed of acquisition, informing them of the percentage of the property that will be allocated to the professional activity.
This applies to work relating to the creation or renovation of a dwelling at 3% super-reduced rates rather than 17% for spaces used as a main residence, either directly by the owner or indirectly by a third party.
If within a 2-year period the use designation changes (starting January 1 of the year the work is completed), the full amount of the tax advantage must be repaid with legal interests from the day it was granted.
If the area of the professional activity does not exceed 25% of the total area, there is in principle no need to reimburse the tax benefit, this accessory use being tolerated. If you are in this case, a notification must be made as soon as possible, always with the AED, for maximum transparency. This will provide you with the required confirmation.
On the other hand, if the professional surface exceeds 25% of the total surface, it is necessary to reimburse the property tax for the whole of the part allocated to the professional activity. For example, a person who wishes to use 50% of his or her personal home for his/her professional activity will then have to reimburse 50% of the 14% VAT saved previously.
Property tax is likely to vary depending on the surface area allocated to professional use: if the professional area represents less than 20% of the total surface area, in principle, the building should not change use designations. There are a number of use designations (residential, mixed, commercial,etc.).
If you have any questions, you can contact the people in charge of building permits in your municipality or the Administration des Contributions Directes - Division des valuations immobiliers In addition, the applicant-tenant will have to obtain an agreement from his owner, his co-ownership and check that this is not in contradiction with the PAG of his municipality (same goes for the owner).
Housing assistance, acquisition bonus
This aid does not include cellars, garages, attics, workshops, commercial premises or other professional outbuildings.
When a buyer declares/intends to declare a business headquarters at their private address, they must submit and application in advance to the Single Point of Contact for Housing Assistance (Guichet Unique des Aides au Logement) with all the supporting information (surface area allocated to the activity, etc.).
A commission meets on a weekly basis to analyze applications case by case and decide whether all or part of the surface is excluded from the scope of the aid.
Lastly, a few good practices for any tenant: get written consent from the owner and/or other owners in the building beforehand to avoid any legal dispute.
And to conclude, all entrepreneurs, whether they are renting a space or own it, should check that their project does not contradict town planning rules applicable in the concerned area (PAG). It is highly recommended that you ask the town planning department as a preventative measure. It will not take much of your time and will allow you to move forward through the steps to your business launch with peace of mind, or bounce back if ever feasibility is not confirmed.
Now get out there and find that perfect location! Happy hunting!
The House of Entrepreneurship of the Chambre of Commerce is the national contact point for future entrepreneurs and established company heads alike. (Future) entrepreneurs can contact the House of Entrepreneurship’s information point to move forward with their business creation/takeover project or be put in touch with the relevant structures or partners.
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