EI or EURL: what to choose in 2026?

One of the most common questions we hear from founders and freelancers setting up in France is also one of the most misunderstood: should you use an EI (entreprise individuelle — sole trader / individual enterprise) or an EURL (entreprise unipersonnelle à responsabilité limitée — single-member limited company)?

The answer changed significantly in May 2022, when a reform introduced automatic separation between the professional and personal assets of any sole trader. The old argument that the EURL was needed purely to protect your home and savings is no longer accurate. But the two structures still diverge on tax flexibility, access to the micro-enterprise scheme, running costs, and your capacity to bring in future partners. This guide walks through each dimension with concrete figures and the practical read we apply in client files.

Direct answer: the EI suits straightforward starts, micro-enterprise activity, and projects still validating their model. The EURL becomes the right call when the profit level makes corporate tax worthwhile, when a banking or institutional partner expects a company structure, or when a co-founder or investor is on the horizon.

The EI has no legal personality separate from its owner. You are the business. Since the law of 14 February 2022 (in force from 15 May 2022), professional assets are automatically ring-fenced from personal assets by law — but there is no distinct legal entity.

The EURL is a SARL (the standard French LLC) with a single shareholder. It has its own legal personality, share capital, articles of association, and full commercial accounting obligations. In principle, the sole shareholder's liability is capped at the amount of their capital contribution.

Before May 2022, this question had a clear answer: the EURL protected you, the EI exposed you. That framing is now out of date.

Under the 2022 reform, any EI automatically benefits from a statutory separation between professional assets (goods, rights, and obligations tied to the business) and personal assets. Professional creditors can only pursue professional assets, save for specific exceptions such as fraud or voluntary commingling.

What remains common to both structures: personal guarantees and bank sureties signed voluntarily. If you personally guarantee a business loan, the statutory protection does not apply. Vigilance about personal commitments signed in your own name is required regardless of which structure you choose.

Our read: asset protection is no longer a discriminating factor between EI and EURL since 2022. The decision should rest on other grounds — tax efficiency, access to the micro-enterprise scheme, cost of running, and capital-opening flexibility.

This is usually the most structurally significant criterion over the medium term.

EI and tax#

The EI is taxed under personal income tax (IR) by default. Business profit is added to the household's other income and taxed at the progressive scale. When earnings are modest, that is generally fine. As profit grows, IR can become heavy — particularly if you cannot control how much stays in the business versus what you draw.

The EI can also elect to be taxed under IS (irrevocable option), which opens the same levers as an EURL taxed under IS: a reduced 15% rate on profit up to €42,500, a standard 25% rate above that, and a deductible manager's salary.

Under the micro-enterprise scheme — available only through the EI — a flat-rate deduction replaces actual charges: 71% for goods trading, 50% for services (BIC), 34% for professional income (BNC). No real expenses can be deducted. This is simple, but becomes disadvantageous once actual costs exceed the flat-rate deduction.

EURL and tax#

An EURL whose sole shareholder is an individual defaults to IR — the same as an EI. Electing IS is common once profit levels justify it. The election is irrevocable.

Under IS, the company pays tax (15% or 25%) and the managing shareholder draws a salary that is deductible from company profit. Retained earnings stay in the company. Dividends paid to the sole managing shareholder are subject to the flat tax (PFU) of 31.4% since 1 January 2026 (12.8% income tax + 18.6% social levies). Note a critical nuance: the portion of dividends exceeding 10% of share capital plus share premium plus shareholder current-account balances is subject to TNS (self-employed) social contributions, not just the PFU. This is a material difference from a SASU, where dividends do not attract social contributions.

Worked example: the same €60,000 profit, two scenarios#

Scenario A: EI under IR (actual regime)

• Business profit: €60,000
• Estimated TNS contributions (deductible): approx. €11,000
• Taxable income: approx. €49,000
• Estimated IR (progressive scale, single, no dependants): approx. €9,000–10,000
• Estimated net available: approx. €39,000–40,000

Scenario B: EURL under IS, manager salary €30,000, pre-IS profit €30,000

• IS at 15% on €30,000 = €4,500
• Post-IS retained profit = €25,500 (company cash)
• Manager net salary after TNS contributions (approx. €10,000): approx. €20,000
• IR on salary: approx. €1,800
• Immediate available income: approx. €18,200 (excluding dividends)
• €25,500 remains in the company for reinvestment or future distribution

Scenario B works better if you can afford to leave cash in the company. If you need to extract everything immediately, the gap narrows. These figures are illustrative — your actual position (household composition, other income, real contributions) must be reviewed with your accountant before any decision.

This article sets out general principles. It does not replace a personalised analysis of your situation, your documents, and the rules in force at the time you act.

On the social side, EI and EURL look similar: the manager is a TNS (travailleur non salarié — self-employed under the Sécurité sociale des indépendants) in both cases. Contributions run at roughly 30–45% of net professional income, depending on activity type and earnings level.

The key difference in an IS-taxed EURL: the contribution base may include a portion of dividends (the share above 10% of capital + premium + current accounts). In an EI — whether under IR or IS — the base is profit or salary.

One frequently overlooked point: an EURL must pay minimum social contributions even if no salary is drawn. In a micro-enterprise EI with no turnover, contributions are nil or near-nil. This is a meaningful cash-flow variable for slow-starting businesses.

In practice, an EI under the actual regime costs less each year to maintain than an EURL. The gap varies by provider and complexity, but it is real. The EURL's additional cost is justified when it delivers a tax advantage, a credibility signal, or a structural step toward growth.

The micro-enterprise scheme is only available through the EI. For the 2026–2028 period, the revalued thresholds are:

• Goods trading and accommodation (BIC): €203,100 annual turnover
• Services (BIC) and professional income (BNC): €83,600

An EURL cannot access the micro-enterprise scheme. If your activity falls within these thresholds and you want the simplicity of micro status — no balance sheet, no formal accounts, contributions and IR calculated on turnover — the EI is your only option without going through a SASU or another separate structure.

One caveat: the micro scheme only saves on accounting if your actual charges stay below the flat-rate deduction. For a consultant with minimal expenses, this is usually true. For a tradesperson with materials, subcontractors, and vehicles to depreciate, the actual regime is often better. See our guide on micro-BIC vs actual regime for a fuller comparison.

Yes, but the transition requires careful preparation. It is not a statutory transformation — the EI has no legal personality to transform. What happens in practice is a contribution or transfer of the sole-trader activity to a newly formed EURL.

The main steps:

1. Form the EURL (draft articles, open a dedicated bank account, deposit capital)
2. Value the assets and liabilities being transferred (goodwill, client portfolio, equipment, contracts)
3. Draft a contribution or sale agreement, choosing the applicable tax treatment
4. Complete formalities via the INPI single window for both the EURL registration and the EI cessation
5. Notify third parties: clients, suppliers, bank, insurers, social organisations
6. Review continuity of existing contracts (lease, client agreements)

A contribution of an EI's activity to an EURL can qualify for favourable tax treatment under specific conditions — this must be structured with your accountant before any deed is signed. An unstructured transfer can trigger immediate taxation of unrealised gains or break fiscal continuity.

For the legal obligations involved in setting up a new entity, see obligations légales à la création d'entreprise.

This is arguably the most decisive criterion over the medium term. An EI cannot have partners by definition. If an investor, a co-founder, or a commercial partner enters the project, a company structure must be created — whether EURL, SARL, SAS, or otherwise.

An EURL converts to a SARL the moment a second shareholder joins. The procedure is straightforward: amend the articles, file at the INPI single window, publish a legal notice. No dissolution or fresh incorporation is required.

If your trajectory includes a capital raise, a partnership, or integration into a holding structure, the EURL gives you an immediate structural head start. For a comparison with other French company forms, see SASU vs EURL and SARL or SAS: the right choice?.

In client files at the early stage, we frequently recommend the EI to founders testing a market, providing intellectual services below the micro threshold, or wanting to defer the structural decision until the model is validated. The cost of exiting an EI is low, and contributing the activity to an EURL or SASU later remains straightforward.

We recommend the EURL from the outset in three typical situations: when the financial forecast shows a profit above €60,000–70,000 from year one or two (making IS immediately relevant); when a bank or institutional counterpart expects a company; or when a partner or co-founder is anticipated within two years.

The most common correction we handle: a founder stays in an EI by inertia up to €80,000–100,000 in profit, pays heavy IR, then asks for an urgent switch to an IS-taxed EURL. The operation is always possible, but it costs more and takes longer than a decision made at the outset. For freelancers and consultants weighing their options, our guide on auto-entrepreneur status: what to know before launching adds a useful complementary angle.

PFU at 31.4% (up from 30% since 1 January 2026) slightly increases the cost of dividend distributions from an IS-taxed EURL. The salary-versus-dividend calculation needs revisiting at this new rate.

Micro thresholds up for 2026–2028: with limits raised to €203,100 (goods) and €83,600 (services), some founders can stay in micro longer than previously planned. This may delay the EI-to-EURL question — but note that the VAT franchise thresholds (€85,000 goods / €37,500 services) are unchanged, so micro status does not automatically mean VAT-exempt.

Sources: entreprendre.service-public.gouv.fr — Choisir la forme juridique; EURL; EI registration; EURL taxation; SARL/EURL social charges; PFU update; Micro thresholds 2026

Current as of 29 May 2026. Reviewed by the Hayot Expertise team, chartered accountants in Paris. Rates, thresholds and regimes may change — verify the rules in force at the time of your decision.