To become a freelancer in Finland, you have two primary options: Light Entrepreneurship (Kevytyrittäjä) and starting a sole proprietorship (toiminimi). Each option has its own benefits and requirements. Here’s a guide to help you decide which might be the best for you and how to get started.
Light Entrepreneurship (Kevytyrittäjä)
This is a simplified way to work as a freelancer without needing to establish your own company. It’s particularly popular for individuals who want to freelance without the commitment or administration involved in running a full-fledged business.
Advantages:
- Less paperwork: You don’t need to register a company, which simplifies tax filing and accounting.
- Ease of billing: You typically work through an umbrella company that handles invoices and other administrative tasks.
- Flexibility: Suitable for people who want to freelance occasionally or as a side business.
Disadvantages:
- Less control: You depend on the umbrella company for many aspects of your business operations.
- Costs: Usually, the umbrella company takes a percentage of your earnings as a fee.
Steps to Get Started:
- Choose an Umbrella Company like OP Light Entrepreneur. Compare their fees, services, and user reviews.
- Register: Sign up with your selected umbrella company. The process usually involves providing your personal details and possibly some documentation regarding your qualifications or identity.
- Start Working: Once registered, you can start working under their framework. You perform the work, report your hours or completed tasks, and the umbrella company like OP Light Entrepreneur invoices the clients on your behalf.
- Receive Payment: You receive payment through the umbrella company less their service fee.
Sole Proprietorship (Toiminimi)
A more traditional form of entrepreneurship, where you own and operate your business as an individual.
Advantages:
- Total control: You have full control over your business operations.
- Business Deductions: Potential for more tax deductions and financial benefits.
- Professional Image: Might be perceived as more professional or serious compared to light entrepreneurship.
Disadvantages:
- More responsibility: You are responsible for all aspects of business management, including accounting and legal compliance.
- Financial Risk: You bear all the financial risks, and your personal assets could be at risk if your business fails.
Steps to Get Started:
- Business Registration: Register your business with the Finnish Patent and Registration Office (PRH). This involves choosing a business name, filling out the required forms, and possibly paying a registration fee.
- Tax Registration: Register for taxes with the Finnish Tax Administration (Vero). This includes VAT registration if your revenue exceeds the threshold limit.
- Open a Business Bank Account (eg. OP, S-pankki, Nordea, OmaSP, DanskeBank) This helps in managing finances better and is typically required for genuine business transactions.
- Set up Bookkeeping: Either learn to manage your books or hire an accountant. Proper record-keeping is crucial for tax purposes and legal compliance.
- Start Operating: Once everything is set up, you can begin your business operations.
Which to Choose?
The choice between light entrepreneurship and a sole proprietorship depends on your specific circumstances, such as how much you intend to work, your financial goals, your tolerance for administrative work, and your need for business autonomy. Light entrepreneurship is generally best for those starting out or testing the waters of freelancing, while a sole proprietorship might be more suitable for those looking to establish a long-term, full-time business.
In all forms of business, we are in Valmista ready to support your journey to becoming a successful entrepreneur.
