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Two easy ways of starting up as an entrepreneur: Light entrepreneurship or a private trader company

Want to employ yourself as an entrepreneur? You can make an easy start. See what the difference is between these two types of entrepreneurship and what kind of entrepreneurship would suit you.

A business of your own or light entrepreneurship?

Becoming an entrepreneur previously meant establishing a business of your own. Today, there are numerous options for entrepreneurship-like activity. As a light entrepreneur, you can also invoice for work performed without a business of your own. 

Light entrepreneurship means that you sell your own work input and expertise through an invoicing service. For Nordea customers, the light entrepreneurship service is provided by our cooperation partner UKKO.fi. 

A trade name is an established name for private traders and is a common form of entrepreneurship in Finland. It is easy for Nordea customers to establish a private trader company: With just a few clicks, you can establish a private trader company and order the required banking, accounting and invoicing services as well as the self-employed person’s pension insurance (YEL).

See below for more details of these popular options.

Light entrepreneurship

Woman in living room with laptop small overlay

As a light entrepreneur, you do not need to set up a business or to do any paperwork. Taxes, insurance premiums, payment reminders and debt collection, as necessary, will be taken care of on your behalf.

You will invoice for your work as a private person, and the income tax and a small service fee will be deducted from the salary you earn. As your invoicing volume increases, there will remain a little less earnings for you compared to the option that you work through a business of your own, but you will also avoid many troubles. 

Light entrepreneurship is a good solution if you want to test your business idea and build a clientele before starting up a business of your own. It is also an easy way of earning additional income alongside your salaried work, studies, parental leave or pension. 

Light entrepreneurship is not suitable for occupations subject to a licence. For instance, taxi driving and occupations in the health care sector require the establishment of a business of your own. In these cases, setting up a private trader company may be the right option for you.

Private trader company

guy in record store small overlay 

Setting up a private trader company is easy and inexpensive. A private trader company also suits part-time entrepreneurship or professional activity subject to a licence, such as taxi driving. Even minors may set up a private trader company with the permission of their guardian. The business of a private trader company is often mainly based on the entrepreneur’s own work input, but hiring extra help is possible. 

A private trader company has some administrative obligations, such as bookkeeping and VAT notifications. Luckily, there are handy digital services available for this, such as Nordea Accounting Plus.

As a private trader, you can deduct in taxation all the purchases you make for your business, such as office supplies, tools and computer software. In this way, there will be more net income left for you.

You should consider setting up a private trader company when you already know that you will be able to obtain paying customers and you are looking for setting up a long-term business activity.

Setting up a private trader company and registering it in the Trade Register is free of charge through Nordea until 31 January 2021.

Light entrepreneurship or Private trader company
Light entrepreneurship – UKKO.fi
Private trader company

Do I need to establish a business?

No        Yes
Right to deduct business expenses*No (see exeptions)Yes
Right to deduct VAT**NoYes
Registration for the Trade Register0 €

0€

Subject to the tariff of the Finnish Patent and Registration Office

Obligation relating to the keeping of accountsNoYes
Are financial statements mandatory?NoYes
YEL obligationYesYes
Suits business subject to a licenceNoYes
VAT obligation***YesYes (see exceptions)

Will I be eligible for a start-up grant?

NoYes

*The deductible expenses of a private trader company are mainly business expenses related to the earning and maintaining of income. The deductible expenses of a light entrepreneur are mainly service fees, travel expenses, the statutory health insurance contribution and the self-employed persons' pension insurance (YEL) premiums.

**A private trader company may deduct the VAT included in its purchases from the VAT included in its sales. 

***The minimum VAT level of private traders is EUR 10,000, i.e. there is no obligation for VAT settlement with a turnover of less than EUR 10,000. The VAT obligation of light entrepreneurs is determined on the basis of the turnover of the company offering the invoicing service, which in practice always exceeds the EUR 10,000 limit.