I have a few questions regarding starting a company in Finland, I'll appreciate any help.
I have a full time job and I want to offer some freelance services (IT). For that purpose I should register a company, right? (Most of the payment processing companies such as Stripe require a "business address").
My question is how will it affect the taxes that I'm paying? Does it work so that I will continue to pay same % of tax from my full time job salary, and will pay the % on the earning through the company? I have tried to ask from the tax office but the person there had no idea about this.
Also, is there any negative side of owning a single person company?
Finally what is the procedure to register a company and how much does it cost?
Thanks.
Registering a company
Re: Registering a company
Have you looked at: https://www.ukko.fi/en/ or https://www.eezy.fi/en/sky2 wrote: ↑Mon May 21, 2018 10:33 amI have a few questions regarding starting a company in Finland, I'll appreciate any help.
I have a full time job and I want to offer some freelance services (IT). For that purpose I should register a company, right? (Most of the payment processing companies such as Stripe require a "business address").
My question is how will it affect the taxes that I'm paying? Does it work so that I will continue to pay same % of tax from my full time job salary, and will pay the % on the earning through the company? I have tried to ask from the tax office but the person there had no idea about this.
Also, is there any negative side of owning a single person company?
Finally what is the procedure to register a company and how much does it cost?
Thanks.
Those seem to me the solution for "some" freelancing. If you do more, then setting up a trade name or llc and getting bookkeeper might be the way to go.
Have you clicked through this: https://www.suomi.fi/company/business-start-up-wizard
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Re: Registering a company
For me that's the negative side. I mean the confusion. I registered a toiminimi and I was thinking the tax office knows how to take care of its taxing. The clerk wasn't sure.
I highly recommend Ukko.fi or similar services.
I highly recommend Ukko.fi or similar services.
FinlandList.com useful links for living in Finland
AskFinnish.com to ask your Finnish language questions.
AskFinnish.com to ask your Finnish language questions.
Re: Registering a company
For taxation, you can find information here:
https://www.vero.fi/en/businesses-and-c ... repayment/
establishing a company
https://www.prh.fi/en/kaupparekisteri/y ... minen.html
prices
https://www.prh.fi/en/kaupparekisteri/hinnasto.html
https://www.vero.fi/en/businesses-and-c ... repayment/
establishing a company
https://www.prh.fi/en/kaupparekisteri/y ... minen.html
prices
https://www.prh.fi/en/kaupparekisteri/hinnasto.html
Re: Registering a company
You can register it on Internet.
Re: Registering a company
I suggest going for Ukko and similar light entrepreneurship services because otherwise you need to do some work of creating a company and following taxes.
You can go for toiminimi, which is basically you get a business ID number and keep a simple bank account and spending tracking. You pay income tax with your regular tax card (so income = your main salary + profits from your company). You need to keep track of your business expenses and income. Submit VAT (if applicable) and yearly reports.
Or go for limited liability which is little more complicated and there is 100000 guides on the internet about it. However I totally warn against going for Oy for just light entrepreneurship.
You can go for toiminimi, which is basically you get a business ID number and keep a simple bank account and spending tracking. You pay income tax with your regular tax card (so income = your main salary + profits from your company). You need to keep track of your business expenses and income. Submit VAT (if applicable) and yearly reports.
Or go for limited liability which is little more complicated and there is 100000 guides on the internet about it. However I totally warn against going for Oy for just light entrepreneurship.
Re: Registering a company
Taxation is simple if you are able to understand the very baich idea of tax and that is the more the one kind of income the higher tax you pay on it. And the tax depends on your total annual income not monthly income.
From a company you can get to kind of income; salary and profit. Taxation for profits is bit complicated but it doesn't affect your tax on your normal income. But if you pick up money as a salary from your business then that will be another salary along with your normal salary. And that will affect your tax %. Tax % simply means how much tax you'll be paying in the year.
Let's say your current income is 35000/year and you pay X % of tax on it which translates as 10000 euros tax/year. Now you start to pick up salary from your new business which is 5000/year. . Now your total income is 40000 euros. Your tax will be calculated on that income. . Your tax% will increase and you'll be asked to pay 12000 euros tax. So your tax has increased by 2000 euros. Now you have two options, either you increase your tax percentage a bit on your total income to cover those 2000 or you keep the same% on your salary from your regular job and pay a 40% tax on your side income. Result will be the same. It's just how you feel psychologically better or how you ate used to manage your income.
A lot of people don't understand this basic idea that the what matters is the total amount paid during the year not percentages. So a lot of people will claim that tax is a lot higher on side income, that's simply not true
From a company you can get to kind of income; salary and profit. Taxation for profits is bit complicated but it doesn't affect your tax on your normal income. But if you pick up money as a salary from your business then that will be another salary along with your normal salary. And that will affect your tax %. Tax % simply means how much tax you'll be paying in the year.
Let's say your current income is 35000/year and you pay X % of tax on it which translates as 10000 euros tax/year. Now you start to pick up salary from your new business which is 5000/year. . Now your total income is 40000 euros. Your tax will be calculated on that income. . Your tax% will increase and you'll be asked to pay 12000 euros tax. So your tax has increased by 2000 euros. Now you have two options, either you increase your tax percentage a bit on your total income to cover those 2000 or you keep the same% on your salary from your regular job and pay a 40% tax on your side income. Result will be the same. It's just how you feel psychologically better or how you ate used to manage your income.
A lot of people don't understand this basic idea that the what matters is the total amount paid during the year not percentages. So a lot of people will claim that tax is a lot higher on side income, that's simply not true
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Re: Registering a company
Marginal tax is higher for extra income. For two continuous streams of income it indeed is the same.