Given Réunion’s well-known tax complexity and integration with broader French systems, understanding the sole proprietorship framework is essential for anyone seeking to operate independently on the island. This article delivers up-to-date information for 2025 on the availability, conditions, and fiscal parameters for individual business status—specifically, the micro-entrepreneur (formerly auto-entrepreneur) regime.
Availability of the Sole Proprietorship Status in Réunion
Sole proprietorship status, under the micro-entrepreneur regime, is fully accessible in Réunion. This status is open to individuals wishing to operate a business without forming a separate legal entity. Major benefits include a streamlined registration process and simplified bookkeeping, offering flexibility and ease of entry for self-employed individuals and small-scale operators.
The micro-entrepreneur regime is widely used across the region, due to its accessibility and minimal administrative burden. Individuals can invoice clients directly under their own name, without the formalities typically required for larger business forms.
Key Features and Practical Conditions (2025)
The following table summarizes the micro-entrepreneur status in Réunion:
| Aspect | Details (2025) |
|---|---|
| Status Name | Micro-entrepreneur (Auto-entrepreneur) |
| Eligibility | Open to individual residents of Réunion (citizens and most legal residents) |
| Legal Structure | No separate legal entity required |
| Registration Process | Simplified, can be completed online |
| Turnover Ceiling (Sales of Goods, EUR) | €188,700 (EUR) |
| Turnover Ceiling (Services, EUR) | €77,700 (EUR) |
| Income Tax Rate (Sales of Goods, %) | 12.8% |
| Income Tax Rate (Services, %) | 22% |
| Income Tax Rate (Liberal Professions, %) | 22% |
| Social Contributions | Paid as a percentage of turnover |
| VAT Management | Simplified regime, VAT exemption (“franchise en base de TVA”) |
| Optional Income Tax Withholding | Available if eligible (Prélèvement libératoire) |
All figures are as of 2025. For reference, at an exchange rate of €1 = $1.08 USD, the primary turnover ceilings would be approximately $203,800 (USD) for sales of goods and $83,900 (USD) for services.
Taxation and Contributions for Micro-Entrepreneurs
Taxation under this status is based on turnover and varies depending on the type of activity:
- Sales of Goods: 12.8% of turnover
- Services (commercial and liberal): 22% of turnover
- Social contributions are calculated and paid as a fixed percentage of declared turnover
The regime’s primary benefit is the absence of complex annual filings or balance sheets—contributions and taxes are paid as flat percentages, and basic income reporting suffices. Micro-entrepreneurs also benefit from the VAT exemption as long as their annual turnover remains below the specified thresholds.
Turnover Ceilings
The turnover limits are crucial, as exceeding them results in the loss of micro-entrepreneur status and a shift into more complex regimes.
| Activity Type | Ceiling (EUR) | Ceiling (USD) |
|---|---|---|
| Sales of Goods | €188,700 | $203,800 |
| Services (including Liberal Professions) | €77,700 | $83,900 |
VAT and Optional Withholding
Micro-entrepreneurs in Réunion benefit from a simplified approach to VAT (“franchise en base de TVA”), meaning there is no VAT collection or remittance as long as turnover remains within the prescribed limits. Eligible individuals may also elect for income tax withholding at source (prélèvement libératoire) if they meet certain criteria.
Pro Tips for Setting Up as a Micro-Entrepreneur in Réunion
- Track annual turnover meticulously to avoid accidental loss of status or unexpected tax obligations; maintain updated records even under simplified accounting rules.
- Utilize the online registration portals provided by local authorities to minimize administrative time and delays.
- Review annual adjustments to ceilings or rates, as these influence eligibility and strategic decisions.
- Consider the prélèvement libératoire (income tax withholding) if your global circumstances favor direct tax deduction on turnover.
- Take full advantage of the franchise en base de TVA, but plan ahead if approaching the threshold where regular VAT registration would be triggered.
Official Sources and Registration
- Service Public (Official Information for Businesses)
- Impots.gouv.fr (Tax Administration)
- Réunion Prefecture Official Portal
In summary, the micro-entrepreneur status offers a streamlined path to independent business in Réunion, supported by clear turnover limits and simplified taxation for 2025. Staying attentive to annual thresholds and proactive with status management can yield both tax efficiency and operational freedom. For anyone operating in this high-tax environment, these mechanisms offer a practical means to simplify independent work.