Self-employment

Self-employed people can be found in the following groups:

Freelancers (e.g. performers, graphic designers, artistic designers)

Light entrepreneurs (using the billing service without or with their own Y-identity)

Creative workers (e.g. artists or musicians)

Self-employed persons (sole proprietors)

Self-employed people sell their skills, services or products to customers, but are not employed by these customers. Income can come from a variety of sources and the work is often self-employed.

A person working on a grant is generally not self-employed for Finnish social security and tax purposes. This is because grant work is not an employment relationship and is not usually a trade or business activity. Furthermore, the grant recipient does not invoice anyone and does not act in a commissioning relationship.

What is a commissioning relationship?

The commissioning relationship is based on a contract between the client and the person who performs the work, known as a commissioning contract. It is important for the freelancer to understand that an agency relationship does not create an employment relationship. Therefore, when negotiating a contract, care should be taken to avoid surprises once the work has already started.

An individual assignment may be the subject of an oral or written assignment contract. However, it is strongly recommended that the contract is always in writing. The form of the assignment contract can be a company’s ready-made contract template or a free-form e-mail.

The contract of engagement may include at least the following:

Parties to the agreement: the client and the author(s)
Content and timetable of the assignment
The basis of the fee or the basis on which it is determined: e.g. contract or hourly basis
VAT: VAT must be collected and paid to the tax authorities if the invoiced sales exceed a certain threshold (in 2025 this threshold will be €20 000 per year)
Reimbursement of expenses: e.g. travel expenses or material costs
The duration and timetable of the assignment or the duration of the contract
Payment terms and/or timetable, possible advance payment.
Possible delays, etc.

An invoice is issued for the assignment. Work done through the billing service must be commissioned work.

What is a light entrepreneur?

“Light entrepreneur” is a term that refers to a person who is entrepreneurial but has not necessarily formally set up their own business, such as a trading name. Light entrepreneurship is a way of selling your own skills or services without full entrepreneurial responsibility, and is particularly suitable for freelancers, part-time entrepreneurs or those who want to try entrepreneurship at a low threshold. It is also possible to work as a light entrepreneur while working or studying, for example.

However, a light entrepreneurer must be aware that, when applying for unemployment benefit, the work done as a self-employed person will be taken into account when determining entitlement to unemployment benefit. If the employment authority considers that light work is an obstacle to taking up a job, entitlement to unemployment benefit may be refused. Alternatively, you may be considered as a part-time or full-time self-employed person. The decision of the authority is always based on an overall assessment. This assessment is therefore also made in the case of a light entrepreneur -activity which is not carried out under a business name and the light entrepreneur does not consider himself to be self-employed.

A light entrepreneur uses a billing service. Examples of invoicing services are Ukko.fi, Odeal, Eezy or OP Kevytyrittäjä. Invoicing services usually charge a commission of 5-7% of the total invoice amount. In addition, there are possible other charges, such as pension insurance contributions (YEL), if your income exceeds a certain limit, for example, in 2025 the limit will be around €9010/year. A light entrepreneur is not obliged to keep accounts. The invoicing service takes care of the paperwork, such as tax payments.

A light entrepreneur can also have a business ID number, in which case his details can be found in the business register. However, a business ID is not compulsory for a light entrepreneur.

The benefits of light entrepreneurship:

No need to set up a business
The administrative burden is small
A good way to try entrepreneurship

The challenges of light entrepreneurship:

Not all tax deductions for self-employed persons
Service charges can raise costs
The Labour Market Authority is obliged to consider light entrepreneurship as a possible factor affecting the right to unemployment benefit.
No automatic right to unemployment benefit as a self-employed person

Unemployment benefits for a freelancer working as a light entrepreneur

If a self-employed freelancer wants to retain his or her right to unemployment benefits despite being invoiced from time to time, he or she must be able to prove that he or she is available for work.

The TE Office (Employment and Economic Development Office) considers a person to be self-employed when his or her activities meet certain criteria for entrepreneurship, even if the person invoices through, for example, a light entrepreneur or a business name. This affects whether the person is entitled to unemployment benefit or basic unemployment allowance.

The Labour Market Authority considers a person to be self-employed under the Unemployment Insurance Act if.

The person is acting in a commercial capacity

Business name, general partnership, limited partnership, limited liability company (if ownership or management is sufficient)
Work done through a billing service (e.g. Ukko.fi, Odeal, Eezy) can also be considered a business activity.
All work that is not done in an employment or service relationship is considered business activity. Ownership or formal status is irrelevant. For example, if you work through a billing cooperative, you are self-employed for unemployment insurance purposes. Business activities can be either part-time or full-time.

Independent and continuous action

You are responsible for the content and timing of the work
Work is done for several clients (no clear employment relationship)
The activity is regular or has a clear objective of earning

A business ID is not necessary

Even if a person does not have a business ID number, he or she can still be considered self-employed if the activity otherwise qualifies as self-employment.

An overall assessment is always made by the Labour Authority.

What is a business name?

A business name refers to a simple and light business form, where one person carries on a business in his or her own name. Officially, this form of business is called a sole trader, but in everyday language it is called a trading name.

What is a business register?

The Business Register is an official register that collects information on businesses operating in Finland. The main business registers in Finland are:

Trade Register of the PRH (Patent and Registration Office)
Tax Administration’s Business and Community Information System (jointly operated by the YTJ, PRH and the Tax Administration)

The YTJ service allows you to search for companies by YID or name and get up-to-date information about the company.

At least the following information is stored in the business registers:

Company name
Business ID
Industry
Address
Business form
Registration date
Business ID: The business ID is a unique business identifier that is assigned to every company and organisation operating in Finland. It acts as a kind of “personal identification number” for the company.
Format: 1234567-8 (seven digits, hyphen and check digit)

The above information is needed for example for tax purposes, invoicing, contracts and dealing with the authorities.