Sole Trader vs. Light Entrepreneurship – Which Fits You Best?

Thinking about becoming a light entrepreneur or starting as a sole trader?
Both are good options — but they fit different goals and life situations.

This guide compares their key differences, benefits, and costs to help you choose what works best for you.

Light Entrepreneurship – The Easy Way to Start

Light entrepreneurship is the simplest way to invoice for your work without starting a company or handling bookkeeping. Palkkaguru takes care of everything in the background.

Benefits:

• No need for a Business ID or accounting

• No setup costs or paperwork

• Easy to test your business idea safely

• Taxes and insurance handled automatically

• Salary paid directly to your bank account

Best for: freelancers, consultants, students, part-timers, and side hustlers.

Sole Trader – When You’re Ready to Grow

A sole trader (toiminimi) is best for entrepreneurs who want to grow their operations or build a long-term business. Palkkaguru also takes care of everything in the background.

Benefits:

• Official Business ID and company status

• More tax deductions (e.g., equipment, home office, travel)

• Easier to build a brand and expand activities

• Better fit for long-term contracts or larger clients

Keep in mind: as a sole trader, you’re responsible for bookkeeping, VAT reporting, and YEL pension insurance.

Which Option Should You Choose?

If you want to start quickly and without risk, light entrepreneurship is the safest and easiest choice. If you already have steady clients or plan to expand, registering a sole trader business may make more sense.

Many people start with Palkkaguru as light entrepreneurs and later move to a sole trader model smoothly — no lost experience, no red tape.

Frequently Asked Questions

Can I switch from light entrepreneur to sole trader later?
Yes, easily. You can start through Palkkaguru and move to your own Business ID later.

Is light entrepreneurship “real” entrepreneurship?
Yes. You work independently but use a service to handle admin and taxes.

Do I need YEL insurance right away?
Only once your annual work income exceeds €9,010.

Comparison Table 2025

Unsure Which Fits You Best?

Let’s talk about your options.
Book a free consultation and we’ll find the right setup for you.

Start Safely

Start light and grow at your own pace.
Palkkaguru handles all taxes, insurance, and payments for you.