Starting a freelance business in Finland is a promising choice, offering flexibility and a well-organized business environment. Freelancers enjoy control over their projects, client selection, and work hours, all of which contribute to better work-life balance and income potential. Here’s a step-by-step guide to help you understand the process and legal requirements for freelancing in Finland.
*Please be aware that we do not update this information in real time, so you should verify that the law has not changed recently.
Before beginning your freelancing journey, establishing a solid foundation is essential. Here are some key steps:
Register as a Freelancer (Sole Proprietor): In Finland, freelancers are often classified as sole proprietors or private traders. Most EU/EEA citizens do not need a start-up application, but exceptions exist for those in licensed trades, planning to operate from a permanent business location, or hiring employees. Upon registration, your business will be assigned a business ID and registered with the VAT, Prepayment, and Employer Registers.
Choose a Business Name: Many freelancers operate under their personal name, but you can also register a unique name through the Finnish Patent and Registration Office.
Set Up Banking and Invoicing: Open a business bank account and establish a system for invoicing clients. Ensure that invoices are numbered, include VAT details, and list both your business and client information.
Apply for VAT Registration: Freelancers in Finland are required to register for VAT once their taxable sales exceed €15,000. Foreign freelancers must register regardless of income threshold if providing services in Finland. VAT rates generally sit at 24%, with reduced rates between 0% and 14% depending on the goods or services provided.
Foreigners, including those from outside the EU/EEA, are welcome to freelance in Finland. If relocating, you may need an entrepreneur’s residence permit. EU/EEA and Nordic citizens do not need additional permits, but non-EU residents must prove sufficient income sources if their business is not yet profitable.
Residence Permit: For those planning to freelance on location, an entrepreneur’s residence permit is required if you lack a pre-existing job offer in Finland. Non-EU applicants must show adequate income to support themselves if the business isn’t generating sufficient revenue.
Freelancers pay personal income tax and VAT in Finland:
Income Tax: Finland’s progressive tax rate ranges from 30% to 34%, depending on income level. Freelancers must pay taxes on all worldwide income if they are residents, regardless of where the income originates.
VAT: VAT is mandatory at 24% for most goods and services sold in Finland, with reduced rates available for certain products. Freelancers can simplify EU VAT payments using Finland’s Mini One-Stop-Shop system, which consolidates payments for cross-border transactions.
Finland mandates specific information on all invoices, including:
Business and Client Details: Both names, addresses, and your business ID.
VAT Details: The VAT rate and total VAT paid, along with any relevant exemptions.
Product Details: Description of services or goods, quantity, and invoice number for record-keeping.
Follow these steps to launch your freelance business in Finland:
Choose a Business Structure: Most freelancers opt for sole proprietorships, which offer simplicity and flexibility.
Register for VAT: Once your taxable sales meet the threshold, register and start filing VAT statements.
Set Up Financial Management: Organize a system for tracking income and expenses, ideally before starting client work.
Open a Business Bank Account: Maintain a separate account to streamline your business finances.