Light entrepreneur or sole trader?
Should you start as a light entrepreneur or found a sole trader business (toiminimi) straight away? Both are good options, for different situations. Here are the differences, the advantages and the costs.
Light entrepreneurship: easy, and nothing at risk
It suits you if you want to invoice for your own work without a company or bookkeeping of your own. The invoicing service handles the invoicing, the tax remittances and the official notifications; your fee reaches your account with tax and contributions already dealt with.
The main advantage is that nothing is at risk. Costs arise only when you invoice: if the work does not come, you pay nothing. Stopping is equally undramatic. There are no closing notifications to file and no wind-up to wait through. You simply stop invoicing.
A sole trader business, when you want to grow
A toiminimi is a company of your own, with a Business ID. It brings broader deduction rights and a clear entrepreneur status: along with a bookkeeping obligation, filings, and fixed costs that continue in the months when you do not invoice.
Which to choose
| Light entrepreneur | Sole trader | |
|---|---|---|
| Setting up | Nothing to found, no Business ID | Business ID and registrations |
| Cost in a quiet month | None | Bookkeeping and other fixed costs |
| Cost when invoicing | Service fee from 1,90 % | Bookkeeping, no service fee |
| Deductions | Limited, through expense allowances | Broad |
| Bookkeeping | The service handles it | Yours, or bought in |
| Stopping | Stop invoicing | Closing notifications |
A rule of thumb: if your invoicing is occasional or just beginning, start as a light entrepreneur. Once it becomes regular and purchases start to accumulate, a sole trader business begins to pay, and Tiliguru handles the bookkeeping from there, from 31,50 € a month.
The change is not irreversible, and it does not have to happen all at once: you can use the invoicing service with a Business ID too.
If you want to see the simpler route first, invoicing without a company describes it, and the plans are on the price list.
Frequently asked
- Can I move from light entrepreneurship to a sole trader business later?
- Yes, and that is the usual order. As a light entrepreneur you find out whether the demand is there, and you found the business once it is worth it. Getting a Business ID does not mean giving up the invoicing service. You can use it with one.
- Which works out cheaper?
- On small or irregular income, light entrepreneurship, because costs arise only when you invoice. A sole trader pays for bookkeeping and other fixed costs in the quiet months too, but in exchange has broader deduction rights and no service fee.
- Which gives better social security?
- They are different rather than better and worse. Working as a light entrepreneur resembles employment in several respects; a sole trader is more clearly an entrepreneur, which affects YEL obligations and unemployment cover. Check your own situation with your unemployment fund.
Tell us what you invoice, and we will work out which plan fits.
A free conversation, at our office or online. We go through whether light entrepreneurship makes sense in your situation, which plan works out cheapest for what you invoice, and whether you want the accident and liability cover. The conversation commits you to nothing.