BLOW-OUT

March 2017

According to Wikipedia, “Blow Out is a 1981 American neo noir thriller film written and directed by Brian De Palma. The film stars John Travolta as Jack Terry, a movie sound effects technician from Philadelphia who, while recording sounds for a low-budget slasher film, serendipitously captures audio evidence of an assassination involving a presidential hopeful.”

How can a 1981 movie, made the year after Ronald Reagan got elected president, be pertinent today? I wonder. The movie is about the recording of a sound lasting a few seconds that becomes evidence with lasting effects. The recording shows the truth of what happened against the evidence of the scene of a car accident. Many high-ranking officials in the film try to suppress the recording, even denying its very existence. They endlessly repeat the official truth.

At a completely different level, it is clear that foreigners living in France blow up more often than they would like. It is clear that a lot of their frustration is fueled by incomprehension of the culture.

Regarding the housing issue that so many foreigners complain about, French people face similar problems. Opening a bank account in France should be easy, but anyone who does not have a salaried job is looked at twice before being accepted. As for the maze of French bureaucracy, French people get lost in it too, albeit less often and with fewer consequences.

We all blow up occasionally, but being foreign considerably increases the chance of it happening.

 

 

SELF-EMPLOYED AND FINDING LODGING IN PARIS

A side issue of the legal difficulties involved in renting an apartment in Paris is that it is increasingly hard to convince a landlord or an agency to rent to self-employed people.

Le Monde recently interviewed a 27-year-old self-employed professional earning more than 3,000 euros a month who is faced with a systematic “No” from everyone. He keeps his official address and tax registration in the countryside with his parents, but lives in Paris, surviving by couch surfing, staying with friends and so on.

The landlords and agencies have apparently decided that their requirement of earning significantly more than three times the rent is not enough. Ideally, they want a salaried employee with an open-ended contract aka contrat à durée indéterminée (CDI); the next best is someone with a long (at least one-year) fixed-term employee contract. Next come students, since parents can act as guarantors. There are also cases where an employer will rent a place for an expat employee.

If you do not fit one of those profiles, you are likely to find it nearly impossible to secure a traditional French residential lease. A foreigner has easy access to short-term rentals, and the rental starts when this person gets off the plane. This option is more expensive but the apartments are fully furnished, which can be convenient when one has just arrived for a short stay in France.

When immigrants or long-term residents are forced to rent through the short-term rental industry, this creates evergrowing difficulties. Sooner rather than later, many become French fiscal residents and then the landlord terminates the lease. Indeed, once a lease is for a primary residence, the tenant obtains the full protection of French law, so before this protection is enforceable, the lease is terminated. One client was told, about six months after moving in, that the apartment was being put up for sale and the landlord did not give her the right of first refusal as it was a vacation rental. She had registered her self-employed business as soon as she moved in, which includes registration with the tax office. One might wonder if her acquiring this status was what triggered the so-called desire to sell the place. She clearly had the means to dispute the legality of the notice received, an email.

I often feel as though I am repeating this warning several times a year. And yet I can assure you, I read stories like this so often that I do not report most of them.

For more information (in French), see www.lemonde.fr/francaises-francais/article/2017/01/24/travailleur-independant-cherche-logement-decent-desesperement_5067944_4999913.html

 

 

CHANGING BANKS IN FRANCE SHOULD NOW BE MUCH EASIER

Banking in France is a weird experience, for a lot of reasons. The most important one is that having a bank account is pretty much a legal obligation; so many situations demand the use of a bank account that the truth is that it is well-nigh impossible to be settled in French society without one. Healthcare reimbursements and child benefits can only be wired to a bank account. Any payment over 1,000 euros, including all salaries, must be paid into a bank account, and the list goes on. It has reached the point where if no commercial banks are willing to open an account for someone – say, because his former bank threw him out – then the central bank, the Banque de France, assigns the client to a bank without either party being able to say no. The bank then opens a savings account that comes with an ATM card. This is a rarely known aspect of French banking.

At the opposite end, the branch manager of a bank in France is personally criminally liable for any money laundering and tax cheating involving his or her branch. That is why these professionals and their staff are so leery of accepting new clients not referred by reliable parties. Most of my clients say they get grilled much more at the bank than at the prefecture, so that the latter can end up seeming like a piece of cake in comparison. Of course, the American FATCA legislation does not help persuade French banks to welcome American clients. Since the prefecture requires bank statements for various reasons, a foreigner can easily be caught between a rock and a hard place. This might make the Banque de France procedure seem more attractive.

For a long time it was very difficult to change banks, so competition on the basis of cost or service quality was non-existent. Over the years, more and more payments have been made automatically from the bank account, often in monthly installments. In theory, changing banks is easy – except that one has to remember all those payments and reimbursements that happen automatically. Miss one and you are in default of payment, which can have serious consequences, the worst being interdit bancaire i.e., banned from normal banking service and forced to use the Banque de France assigned risk client procedure.

Whether it is laziness or fear of screwing up, the bottom line is that less than 5% of people change banks every year.

Now, though, new legislation requires the “new” banker to initiate the transfer of all payments, reimbursements, salary and so on. I do not know about other countries but it feels as though everybody in France complains about their bank – the awful service, high fees and lack of reliable employees. Once the word really gets out about this legislation, something is going to change, and I am sure it will shake up French banking.

UFC-Que Choisir, France’s top consumer advocacy group, has stated that the next step should be regulation similar to that in the cellular telephone industry, allowing one to keep the same account number so as to facilitate the transition from one bank to another. It should be noted that the new legislation does not apply to mortgages, which limits its efficiency. Still, many clients have two accounts; the family account generally covers all the wire transfers and is not linked to the one with the mortgage.

We will see how effective the new legislation is. I will keep you informed, as banking in France has become a serious problem for many.

For more info (in French), see www.lemonde.fr/economie/article/2017/02/06/le-changement-de-banque-simplifie_5075175_3234.html

 

 

SHARP INCREASE IN LOCAL TAXES FOR PARISIAN SECONDARY RESIDENCES

On 30 January the Paris City Council approved an increase on a local property tax, which will go up from 20% to 60%. Last November the Parliament approved a provision allowing cities much more flexibility to decide the rate of the taxe d’habitation (paid by tenants) and taxe foncière (paid by owners).

About ten years ago, a taxe sur les logements vacants was created to heavily tax owners who did not rent out or use their properties and therefore paid no taxe d’habitation. As a result, owners began stating that they used the property a week here and there as a secondary residence, and they paid the taxe d’habitation, which does not increase annually as the punitive vacancy tax does. Since 2015 they have also paid a 20% surtax on the taxe d’habitation.

The latest measure, raising the surtax to 60%, is a response to an increase of 43% in the number of secondary residences in Paris between 1999 and 2014, partially if not primarily motivated by the very-short-term rental industry, which existed before Airbnb but expanded considerably with it. The City Hall states that 107,000 apartments, or 7.5% of the total, are secondary residences. The city is losing residents and blue-collar businesses. An official stated:

“Taxer davantage les résidences secondaires incitera leurs propriétaires à les vendre ou à les louer à l’année, ce qui augmentera l’offre locative. Notre objectif est que ces logements bénéficient en priorité aux Parisiens.” (Taxing secondary residences more should push owners to either sell or rent long term, which should increase the amount of rental housing. Our goal is for Parisians to be the first to benefit from the increased amount of such housing.)

It should also be noted that the 2015 surtax raised 20 million euros a year for the city coffers, and the amount will now rise by some 43 million euros.

For more info (in French), see www.lemonde.fr/argent/article/2017/01/25/a-paris-la-surtaxe-sur-les-residences-secondaires-va-passer-de-20-a-60_5068843_1657007.html

 

 

MULTIYEAR CARTES DE SEJOUR

I have already mentioned these cards twice since they were introduced for foreign students working on a doctorate. As of November 2016, multiyear cartes de séjour mention salarié, i.e. employee status, and vie privée et familiale, personal and family status, are now issued almost systematically at the time of the first renewal. I am not certain exactly how the duration of the card is decided. The information I am currently getting indicates that the employee card seems to be for four years while the private life card is for two.

There is a lot of misunderstanding regarding the nature of these cards, as people often confuse them with the carte de résident, which is the equivalent of the American green card. The key difference is that the cartes de séjour are issued for specific purposes, and there are a lot of limits for many of them, mainly in terms of the right to work. For a couple of years, maybe more, people will get these longer-lasting cartes de séjour when they are expected to be able to ask for a carte de résident a year or two later. The real issue is that more and more people have diverse careers, not just one salaried job. A carte de séjour mention salarié holder can be prevented from, say, launching a side consulting business, or teaching yoga, for several years.

Since the regulation just came about in November, I do not yet know if it will be possible to ask for a carte de résident while the carte de séjour is still valid for a few more years. I have already been confronted with this situation several times, making what appears to be wonderful news into bad for several of my clients.

I raised another issue regarding the profession libérale, commerçant, if and when these cards could also be issued for several years. Putting the answer “it might be possible” into the French context of distrust of the self-employed in general, causes me to guess is that this is not going to happen for quite a while. As an example, the profession libérale carte de séjour holder at the Parisian prefecture will now have this request reviewed by the office in charge of merchants and craftsmen. This is not a good sign.

 

 

REDESIGNING MY WEBSITE

My website is being redesigned, mainly so as to use more recent software to update and manage it. This means there may be a couple of days when the site will not be online. I am sorry for the inconvenience, and we will do everything we can to keep this outage as short as possible. Indeed it should evolve as I am taking over the full control of the back office and am able to update it regularly. Now chatting is possible on all the issues.

 

www.theamericaninparis.com. A LINK ON MY SITE

Stephen Heiner is a serial entrepreneur who moved to Paris after selling one of his companies in 2012.  He has opened two companies in France since 2013 and is trying to prove that "entrepreneur" really is a French word.  He worked with me first on his visitor visa, and then later, on this transition to the citizenship path, on his profession liberale visa, which he successfully obtained and holds to this day.  He reflects on his personal journey of immigration and discovery in France at www.theamericaninparis.com.

 

 

OFFICE CLOSED JUST BEFORE SUMMER

The office will close for less than two weeks starting on Thursday June 8th, reopening on Wednesday June 21st. As always, I will be reachable by email for emergencies and important matters. The service I offer of receiving mail for clients will continue while the office is closed. This time I am leaving France and email will truly be the only way to reach me while I am gone.


Best regards,

PUBLIC AND PRIVATE HEALTH INSURANCE IN FRANCE

QUESTION

I just wanted to touch base as I am having problems with travelers/health insurance. I am being told that I cannot purchase a policy without having a carte Vitale – carte d'assurance maladie, but I am unable to get this as my visa has expired. Do you know anything about this? I would have thought that a lot of expats don't have, or don't yet have, the carte Vitale. So, I wouldn't have thought that this card was mandatory for travelers/health insurance.

Now, bear in mind that this is what we have been told over the phone. The insurance broker’s office in the 20th is on the opposite side of the city so we didn't want to go if they can't provide the insurance. However, I am wondering whether I might have better luck if I go in and ask to speak to the manager?

My French isn't great but my Parisian boyfriend is doing the translating. We just went to an insurance agent office and relayed to them this information about the need to purchase private insurance to renew my visa. They are still saying that they are unable to provide any kind of insurance (French, foreign or otherwise) without a social security number. They said that this will be the case at all insurance offices in France. So it seems that I can't get my visa without travelers/health insurance and I can't get travelers/health insurance without social security, for which I need a valid visa. It seems that my only solution is to buy an American or other foreign policy and have it translated or go to the visa appointment without the required documentation and explain what’s happened. But that sounds like a lose-lose situation to me!


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ANSWER

It is clear that you are asking the wrong professionals about a policy that is extremely rare. Therefore, I need to define several things before I can explain the difficulty you have run into.

The carte d'assurance maladie, commonly called the carte Vitale, is a green card with a microchip containing the information about your public health coverage, including a fair amount of information from your medical records.

Assurance Maladie is the public health division that is supposed to cover everybody residing in France.

A mutuelle is a private insurance policy that covers the deductible of the public coverage; it cannot be purchased without first having the public coverage.

What you need is a private policy that covers you in terms similar to those of the Assurance Maladie.

Now I would like to explain French health coverage so you have an understanding of the bigger picture.

First, France really offers complete universal coverage for everybody. For an American this is difficult to grasp. It means the public system covers the vast majority of medical costs for French citizens, French residents and even undocumented immigrants. Thus the public and insurance companies only address the portion of the cost that the public system does not cover. They do this through the coverage called a mutuelle. Unless you go to a specialized agent who sells the kind of policy you need, you will always receive the same answer, which is the one you are getting. BY LAW all they can provide is a mutuelle. Only a handful of insurance brokers in Paris sell the kind of policy you are looking for.

Second, working in France puts French and foreign people alike in the public healthcare system, whether they are salaried, self-employed, a business owner or on unemployment. The same is true of people who receive a French pension or French welfare (the revenu de solidarité active or RSA), housewives and minor children. Therefore only foreigners living in France who do not work in France are allowed not to be covered by the public system. Only a couple of types of immigration status allow a foreigner living in France to purchase a private policy, which replaces the public system. The most common of these types of status is mention visiteur, which does not grant the right to work in France. I assume that this is your current immigration status. I can come up with five insurance agents selling this kind of policy in Paris.

As it happens, you seem to have managed to get the contact information for one of them, who is indeed located in the 20th arrondissement. This agent is the only one I know who can sell the cheapest of such policies from a major insurance company, less than 550 euros a year, standard risk and senior alike. If you are mainly interested in renewing/securing your immigration status in France, this is the best deal. The other brokers offer better policies but for much higher prices. I am sure that if you ask the right question of the right person, you can get this information.

I hope that I have explained why you were having such a big problem and that you can now easily fix it. You are much better off going to the other side of town than losing your legal stay in France or paying possibly 5 to 10 times more for your coverage. Indeed, if it is a foreign policy, you need to add the cost of translating, which is expensive.

One thing that should be obvious, but that I believe should be said loud and clear: as a French resident you are entitled to sign into the French public system and you do not need to work in order to be part of the system, as I explained above. Since 1 January 2016 the program has been called protection universelle maladie. It would require you to contribute 8% of your worldwide income, including that from the USA. This could be a good solution to your problem. Do the math!

Something in your question raises an issue that you did not really address. I sense that you do not like your current immigration status, as it clearly entails a lot of aggravation. You mentioned your French boyfriend; if your relationship is stable enough, you might envision concluding a pacte civil de solidarité (PACS). If you are in a PACS with a French partner and can prove that you have been living together, you can get a carte de séjour mention vie privée et familiale. The PACS has many of the attributes of common law marriage.

You should also realize that the caisses primaires d'assurance maladie (CPAMs) are as tedious as the prefecture and involve about as many horror stories. But one benefit of holding vie privée et familiale status is that you would have an unrestricted right to work in France. This might definitively fix most of the problems involved with your living in France.

CONSEQUENCES OF ASKING FOR IMMIGRATION STATUS WHEN RE-ENTERING FRANCE

QUESTION

As an American I benefited from the young professional program. These last months I have been working hard on putting together a business plan to start a tiny catering – cooking school that is run in people’s homes. This solution pretty much avoids all the sanitary and business regulations since private individuals visit another private individual’s residence.

Last week I learned the disastrous news that my right to work as an employee on this exchange program will stop short a week before my carte de séjour expires. The prefecture is making a huge deal about it and I have been yelled at twice now by civil servants and told I cannot work during those days or I could lose my right to come back to France forever.

The procedure at DIRECCTE is quite long to obtain the employee right to work. Therefore, I am not sure I can get it before I leave in late March. Does it truly jeopardize my right to come back to France?


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ANSWER

There are so many layers to be addressed here that I can only highlight them. I truly doubt that if you cannot fix the situation it will have a negative effect on your right to enter and to live and work in France as a consultant.

First, asking for an immigration visa to enter France erases most of what has happened in France in the past, disappear when a long stay visa is issued except for criminal convinctions. Therefore, previous immigration issues, it would erased by the new long-stay visa is issued. You should obtain new immigration status with a right to work as self-employed. Thus the discrepancy you are worried about will not be addressed when you come back. Keep in mind that it is not the same type of right to work, so you will not deal with DIRECCTE anymore.

Second, you must declare your 2017 salaried income to France. The amount is mentioned on form #2042, which has come with the taxable salaried income written on it for several years now. Even if it is three months’ worth of salary, the amount will be relatively small, and should not raise any attention. A one-week discrepancy would mean about 10% to 15% more salary than what you were allowed to receive. The chance of this being noticed when you submit the 2017 tax notice (avis d’imposition) to the prefecture is slim to none.

Third, the 2017 avis d’imposition will be issued in August or September of 2018. If, against all odds, the discrepancy is discovered in the autumn of 2018 or sometime in 2019, it should have minimum consequences if you have a thriving business and comply with all the requirements to retain your immigration status.

It is true that when the prefecture warns a foreigner of adverse consequences, one must listen very carefully, since they are the ones issuing the immigration status and the result can be horrendous if you do not comply with their requests,. This would have been the case if you were to ask for employee status with a new employer, because DIRECCTE would have to review a request to hire you as an employee submitted by a French employer.

It is rare that such circumstances bear no adverse consequences, but I believe that this is the case here because you are asking for a new long-stay visa, so count your blessings.

DISCLAIMER
Please forward this message to all those who would be interested in its contents. The information contained in this newsletter is intended only as general information. I strongly urge readers to seek professional guidance concerning the legal and tax matters mentioned. This newsletter is intended as a general guide and is not to be taken as professional advice.


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