When you open a freelance business in Finland, you can take full control of your professional life. As a self-employed individual, you will have free reign to select clients, adjust your products and services, manage your marketing efforts and more. In some cases, freelancers are able to earn more than they would in a traditional job because they can set their own rates. They also can tailor their work hours to accommodate family and personal responsibilities, and this can help you to achieve a more manageable work-life balance. While you understandably want to become a freelancer in Finland, you may not know where to start. This guide will be your perfect starting point to know your steps and obligations when working as a freelancer in Finland.
How to Get Started Working as a Freelancer in Finland
Before you serve your first customer and get paid, a few important steps are in order. A great starting point is to create a business plan. By creating a business plan, you will define who your target audience is and what products or services you will offer. Your business plan will also outline competitive prices, which will be based on deep market research. Marketing will also be covered by the plan. Take time to research all of the marketing options available to you, and develop an effective strategy to get in front of your customers. Once you take these steps, you can more confidently confirm that running your freelancing business will be profitable.
Can You Work as a Freelancer in Finland as a Foreigner?
Are you thinking about relocating to open a freelance business in Finland? Perhaps you want to work remotely from another country while serving customers and clients in Finland. The good news is that you can do freelance work in Finland even if you are a foreigner. There are a few additional steps that must be taken before you can get your business up and running. When you learn how to become a freelancer in Finland, for example, you will see that you must meet the country’s work and residence visa requirements. In addition, you must satisfy all of the other initial steps to launch your freelancing business.
How Much Money Can You Make as a Freelancer in Finland?
Freelancers generally make slightly more money than their counterparts in the same field who are traditional employees. However, the income can vary substantially depending on the type of work that you do and experiences you have. The average employee in a traditional job in Finland earns approximately 3,600 euros each month. As a freelancer, you are your own boss. This means that you do not have to give a cut of your compensation to an employer. While your wage may be higher as a freelancer, it is important to note that your actual income is dependent on the quality of your products, how well you serve your customers, if your marketing efforts are effective and even what the competition is doing.
How to Register as a Freelancer in Finland
When you freelance in Finland, you may also be called a sole proprietor, self-employed, sole trader or private trader. Most individuals who are citizens of the European Economic Area will not need to register their business. However, there are some exceptions that indicate the need to prepare a start-up application. For example, you will need to file a start-up application if you work in a licensed trade, will run your business permanently outside of your home or have employees. After your start-up application has been processed, your new business will receive an identification number. You will also be registered for VAT, with the Prepayment Register and with the Employer Register of the Finnish Tax Administration.
You also need to select a name for your business. Many sole proprietors choose to operate under their personal names. Regardless of the name that you select, you must register it through Finland’s Patent and Registration Office.
If you are a foreign national who wants to open a freelance business in Finland there may be additional steps to take. Those who are from a Nordic country or from anywhere in the EU are not subject to the extra requirements. Specifically, those who are from another country must apply for a residence visa. A general residence permit requires you to have a job in Finland lined up before you apply. However, to be a freelancer, you must obtain a special entrepreneur’s residence permit. If your business is not yet generating income, you must prove that you have sufficient income from other sources when you apply.
How Much Taxes Do You Have to Pay as a Freelancer in Finland?
As a sole proprietor in Finland, you are required to pay personal income tax as well as VAT. The personal income tax scheme in Finland is progressive. The rate ranges between 30% and 34%, depending on the amount of annual income that you generate. It is important to note that Finland taxes its residents’ worldwide income rather than only income generated within the country.
VAT, or value-added tax, is a special tax placed on goods or services that businesses in the EU offer. The VAT rate is 24% for goods and services that will be used in Finland. If a foreigner is buying the goods or services, you will need to pay VAT to that country separately. If you sign up for the Mini One-Stop-Shop, you can pay all EU VAT payments through a single tax return for simplification. While the 24% rate will apply in most cases, there are some instances when a reduced rate between zero and 14% may apply. Specifically, the types of goods or services sold will determine the actual VAT rate that you are responsible for. You must register for and start paying VAT once your taxable sales reach 15,000 euros if you are a resident. There is no minimum threshold for non-resident, foreign freelancers. Registration can be completed online through the Tax Administration’s website. See the details of VAT payment and obligations for freelancers in Finland here.
How to Invoice as a Freelancer in Finland
For all goods and services that you sell as a freelancer, you are required to prepare an invoice. Regardless of where the customer is located, the invoice should have some key information on it. All invoices must be sequentially numbered, list the VAT rate, have details about a possible exemption and include the total VAT paid. They also must have your business name, address and business identification number. In addition, the customer’s name and address, a detailed description of what is being purchased and the number of units being purchased should be listed on each invoice.
How to Manage Your Money as a Freelancer in Finland
Tracking income, expenses and invoices are critical for all freelancers in Finland. It is easy to fall behind on financial management when you are busy running your business and serving customers. However, it is important to stay on top of inputting income and expenses into your money management system. Doing so in real-time gives you the immediate ability to analyze your financial situation and to make quick, smart business decisions.
Simplifying money management is a top goal for many freelancers in Finland. Some have found the solution they need through Xolo Go. This innovative platform saves you time through features like automatic invoice generation and a VAT calculator. It also comes with a business bank account, a real-time dashboard and even credit card payment processing with affordable rates.
How to Start a Business as a Freelancer in Finland
While the process to open a freelance business in Finland is relatively straightforward compared to the process in other countries, there are a few important steps to take. First, you should choose the legal business entity that you want to work with. Generally, the best option for many freelancers is a sole proprietorship. What are the other steps required to become a freelancer in Finland?
- If you plan to work as a freelancer in Finland as a foreigner, you must apply for an entrepreneur’s residence permit.
- You should research if you need to file a start-up application and proceed with the process if you meet the requirements.
- The business name must be registered with the Finnish Patent and Registration Office.
- A business bank account should be opened under your business name.
- If you meet the threshold for VAT, you must register to pay VAT and start filing the required statements.
- A VAT invoice template should be used, or you should sign up for a convenient service like Xolo Go that automates invoicing.
- You will also need a financial management process to account for income and expenses. The best time to create this process or to set up a related service is before your business is active.
Do you want to run your freelancing business in Finland from another country? Through Xolo Leap, you can conveniently use e-Residency to get your business up and running from any location around the globe.
Become and Work as a Freelancer in Finland Today
Now that you know how to become a freelancer in Finland, you may be eager to get started. You can easily progress through these steps at your own pace to start moving in the right direction. This is also the right time to learn more about the excellent services available to you through our products. Invoice your clients cross-border and have your one-person business registered and set up by Xolo Leap.
