Sunday. 04.12.2022

The emergence of light entrepreneurs in Finland

Instead of doing everything themselves, light entrepreneurs choose an invoicing service company to do the paperwork and taxation for themselves.

The rise of unemployment, people being laid-off or employers having to cut hours, the vast change in income has pushed many to look for other opportunities to earn extra income in order to survive. Although students, freelancers and many others working in the creative field have utilized invoicing service companies, the growth of the light entrepreneurship is faster than ever

But who is a light entrepreneur and what does it mean to work as a light entrepreneur?

Light entrepreneur is often a person who sells services as their side job, although some are full-time light entrepreneurs. Besides the creative field they may work as food couriers, painters, copywriters or cleaners.

Light entrepreneurs can work in almost any field but the ones listed are the most common jobs to have. Instead of doing everything themselves, light entrepreneurs choose an invoicing service company to do the paperwork and taxation for themselves. 

Having a business ID is not necessary 

For a long time, all businesses or self-employed people were practically required to have a Business ID, also referred to as business code.

This code consists of 8 digits and it not only helps people to identify and search information about the business but also provides benefits, the main benefit being reductions in taxation. However, setting up a full-time business with business ID is not for everyone. Light entrepreneurship can also be done when having a Business ID, but most prefer not to have it due to various reasons such as time constraints and avoiding paperwork

Competition between invoicing service providers increases

Invoicing service companies have three main areas where they compete against each other: service fees, customer service and fast payments.

When searching for paras kevytyrittäjyys Suomessa, the best invoicing service provider in Finland that is, various providers pop up promising best service with only small fees.

Oftentimes the service fee is around 5-7% of the amount invoiced, but some go below that and offer lower service fees at around 4 percent. Other factors such as the quality of service of the invoicing service also plays a key role as it is common to have questions and inquiries regarding payments, invoicing and taxation.

Challenges in taxation

The biggest challenge in becoming a light entrepreneur is not choosing the right invoicing service company but rather taxation.

Although the tax office provides information about taxation regarding light entrepreneurship, the information provided is rarely enough for many as the line between one considered either as an entrepreneur or as an employee is vague. The basic guideline is to know whether the invoicing service company operates by paying wages or trade income.

The invoicing service company does the taxation according to the tax card, so knowing the type of income being received is needed in order to fill out the tax card correctly.

Since light entrepreneurship is a relatively new way of working, the legislation and thus also the tax office may guide two people working in the same industry differently. Any questions regarding taxation as a light entrepreneur should be directed to the customer service at the tax office.

The emergence of light entrepreneurs in Finland