Freelance job

[kashyaps]

Hello,

I have been working in Finland as software engineer from last 4 years as a permanent employee. Now that I know, we are going to get this temporary lay-off in our company
I started looking outside for opportunities. I got an offer from UK based consultancy ( but working in Finland itself ) of 1 Year contract. The pay would be 35€*7,5 a day which is roughly 5.250 € a month.
Since I'm going to receive this salary as a freelancer and not as an employee, I would like to know what would be the taxes, and whether do I need to register my own company to invoice the
consultancy? If so, what is the procedure of registering own company and how much would it cost etc would be helpful.. and what happens to social security, unemployment benefits, health insurance etc if I take up this freelance job, would I be still eligible to claim benefits from KELA as earlier?

I would also like to know whether permanent contract is better than the above opportunity?

please provide your valuable suggestions on this..thank you.

[Rosamunda]

Hello,

I have been working in Finland as software engineer from last 4 years as a permanent employee. Now that I know, we are going to get this temporary lay-off in our company
I started looking outside for opportunities. I got an offer from UK based consultancy ( but working in Finland itself ) of 1 Year contract. The pay would be 35€*7,5 a day which is roughly 5.250 € a month.

Does this UK-based company have a registered company in Finland?

Since I'm going to receive this salary as a freelancer and not as an employee, I would like to know what would be the taxes,

Personal income tax will be pretty much the same as if you are salaried. You might be able to deduct some of your business expenses (if you need to travel, buy materials, equipment and so on).

and whether do I need to register my own company to invoice the consultancy?

Given the annual income yes, you should probably register yourself as a sole trader (toiminimi).

If so, what is the procedure of registering own company and how much would it cost etc would be helpful.

All this info is already on this forum. Just search using "toiminimi" and/or "tmi". There are also links to Entreprise Finland, the Patents and Registration office, the tax office and the TE Keskus where you can get additional information. And there is a book called Establishing and Doing Business in Finland which you can borrow from your library (but most of the info can also be found on here and the other sites).

and what happens to social security, unemployment benefits, health insurance etc if I take up this freelance job, would I be still eligible to claim benefits from KELA as earlier?

You will have to pay into these independently. Some are compulosory (eg pension and social security) some are optional (unemployement).

I would also like to know whether permanent contract is better than the above opportunity?

Not a whole load of difference except that you will have to find a bookkeeper or do the paperwork yourself. Personally I think that if you are only working for one client / employer it is better to have a permanent contract.

[mdnpr]

Penelope: No, the UK based company is not registered in Finland.

[kashyaps]

Does anyone know how much does it cost to register toiminimi?
Is this paper-work too much for a person to manage during weekends?
or how much does it cost if I can get this paper work done from some local person or agent?

[Rosamunda]

http://www.prh.fi/en/kaupparekisteri/yr ... rader.html


75€


See also :

http://www.yrityssuomi.fi/

[tiliavain]

You don't need an agent, and it's free if you don't register a business name (you use only your own name as the business name)

[kashyaps]

I am paying about 5% towards TYEL contribution everymonth, will it be the same 5% for freelance job also. otherwise what is the % for freelance jobber

[kashyaps]

Today I went to Vero Talo to find out more details about Toiminimi taxation etc.
I dont know whether the lady understood me there correctly or not, she told me that I would
have to pay 23% VAT for whatever money I charge from customer.

Now I'm confused that if 23% VAT and then 35% tax on the remaining then I wouldn't keeping much for myself
after paying health insurance, accountant costs ..etc..

I'm quite sure that I would also be obliged to pay 22.4% towards YEL contribution which I have read in some other thread.

[ajdias]

There's an online booklet that explains most of what you need to know. I think I may have posted it here...
Anyway, if you are exporting your services within the EU you are not charging VAT to your clients. That's 0 VAT for you if you're only selling to England.

Now I'm confused that if 23% VAT and then 35% tax on the remaining then I wouldn't keeping much for myself
after paying health insurance, accountant costs ..etc..

VAT is normally charged on top of price in B2B relationships. If you were selling your services to a finnish company you'd charge them 23% on top of your price (given that you'd be selling above a certain amount/year).

EDIT: Found this thread, here in the forum

[distantspaces]

If you live in Helsinki, contact the people here, and arrange for a personal consultation session:

http://www.yrityshelsinki.fi/en

They can help you get started with setting up your own business, and would be able to clarify taxation issues as well.

[kashyaps]

Thats the problem, I'm put up in Tampere otherwise I could attend one of those free courses.
But from one my friends I came to know about this Ensimetri, here in Tampere.
I will contact Ensimetri and see if they have any courses in English or some advice.