FAQ: Becoming a software freelancer in Finland
Here you can find the FAQs about becoming a software freelancer, running a company, customer acquisition and more. Please note that the answers are Finland specific.

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Setting up a company

You can start looking for projects even if you haven’t established a company yet or are still employed. Setting up a company (LLC) is fast and easy these days, so you can do it once you’ve found your first project.

Our advice is to establish a limited liability company (Oy) to be able to offer your freelance services and protect your personal assets from a legal perspective.

Working as a sole trader (toiminimi) gives you unlimited liability and all your personal assets (e.g. home, car and personal savings) are up for grabs if the worst happens. In case of a limited liability company, the liability is limited and the company can declare bankruptcy if worst happens, and your personal assets are immune from the liability of the company.

It is also a taxation question. Sole trader is a good option when the business is small (<30 000 €). When the company’s income grows, limited liability company is the most flexible choice from taxation and profit distribution’s perspective.

The online registration for limited liability company  is ~275€ . This is a business cost, so later when your company is registered and accounting and bank account are setup, you can claim this ~275€ back from your company. Why? Because you paid it from your personal bank account even though it was a business cost.

Working

In general, developers who have 5+ years of work experience and a proven track record find projects quite easily. Of course, one’s personal criteria for the projects vary and can make the search more difficult.

There are several freelance brokers that are happy to network with you and offer you projects. Talented is one of them. With us, you can either tell our agents what kind of projects you’d prefer (ideal industry, technologies, project length and location) and just relax while they will search and present you the projects that suit you the best. If you want to take a more active approach, you can take a look at our available projects and let us know if some of them spark your interest – our agents will then tell you more about the gigs and if you wish, connect you with the end client.

Talented has millions euros worth of onsite and remote projects up for grabs for freelance software professionals and designers on weekly basis. The projects are typically 6+ month-long on-site projects with 100% allocation, but as always, there are exceptions.

Selling your expertise is a great skill to learn. That way you can gain extensions to your projects or get new ones from the same client. The skill also helps you with customer acquisition in general.

If you decide to cooperate with freelance brokers, they will sell your expertise on your behalf.

In Helsinki, an average hourly rate for a senior developer is 80-100€.

With Talented, each consultant is responsible for determining their hourly rate themselves. However, the reality is that at the end of the day the client will decide whether to pay the price or not so the price should be somewhat in line with the market prices. If you’re unsure of how much you could charge, Talented agents will gladly share their insight on the market prices and how much other developers with similar skills and experience have been charging.

This can vary a lot but the ideal situation is none, meaning that the next project would start immediately after the previous one ends. As an entrepreneur you also have the freedom to have some time off in between projects if you wish.

We at Talented have a great rotation mechanism. When your current project is about to end or you want to, for one reason or another, move to the next project, our agents will start looking for a new project for you.  You can see all our available projects through the tool we have built for independent contractors and notify us that you’re open for new adventures. It’s easier to plan the future when you have a window to the market.

You raise your hand, express how you feel and prepare to rotate. To avoid any weird situations, the best way is to contact your Talented agent/person responsible of the project and talk it through and decide together on the best actions.

If you are a senior developer with 5+ years of work experience and a proven track record, YES. There’s a shortage of developers in Finland so good developers find work easily.

The hardest part in going back to full-time salaried work is giving up the things you get used to: the freedom and the bigger income that come with entrepreneurship.

Maybe. As an entrepreneur you are responsible for keeping your skills up-to-date, the client is not obliged to support your learning as they have hired you to do one thing: to deliver a lot of things in a short period of time with high quality. Of course the client might use tools that you’re not familiar with, and those you might have to learn on the job or in your free time.

Running a company

  • Fringe benefits, that are not strictly speaking wage
  • Dividends
  • Shareholder loan, (although, payback to the company is required)
  • Renting your own space for the company

The circumstances for every company are different but generally speaking, in short term one should pay oneself salary up to 26% and take the rest as dividends. Any extra money taken as salary will move you higher up on the progressive income tax scale. In long term, it is more optimal to leave the capital in the company and raise the mathematical value of the stock. This way one can later raise more dividends (the absolute sum/limit is 8% of the stock value or up to 150 000 €).

Moreover, one should use all of the fringe benefits.

As an entrepreneur, you only pay 20% of corporate tax. In addition there are  payments like Self-Employed Persons’ Pensions Act (YEL), some employment expenses and perhaps employers’ health insurance and corporate liability insurance.

To calculate how much you could make as an independent contractor, visit here.

You can offer yourself all the same benefits that employees have access to. Up to the tax-free limits (marked inside parenthesis), it’ll be only a business cost.

  • Lunch benefit (~50€/month)
  • Sport and cultural benefit (400€/year)
  • Commuting benefit (3400€/year)
  • Phone benefit (20€/month)
  • Internet subscription
  • Vehicles such as bike or car
  • Massage benefit

Bookkeeping isn’t rocket science (the learning curve is not nearly as steep as coding). Especially the technical aspect of doing the books is pretty much learning basic accounting principles and putting the right account number in one of the two columns. These can be learned in a matter of days or weeks. However, the laws covering accounting are numerous. For an entrepreneur, it’s always beneficial to learn about these laws as your business skills also increase but for anyone who does not have a deep understanding of bookkeeping, it might be smart to outsource and avoid often obvious mistakes that will cost money in taxation.

By outsourcing you’ll save time and money. In addition, you’ll get support. Usually solo-entrepreneurs spend enough time by themselves. A good accountant is someone you can lean on and ask questions that are also related to your business’ finances in general.

As you are self-employed, you will get expense compensation through your company.

As an entrepreneur you have the freedom to choose to take as much time off in between projects as you wish. If you’re in project, the holidays and days off are negotiable with your client. The holidays will be unpaid by the client but will be paid through the employer, which in this case is your own company. So yeah, you’re getting a paid vacation in the sense that you’re paying it yourself through your company.

A good rule of thumb is that as an entrepreneur you’re working on total compensation which includes everything – and you’re free to spend as much or as little vacation as you will, as long as your customers permit.

Also entrepreneurs get support during parental leave and can take maternity or paternity leave just like everybody else. Kela provides the same parental allowances for entrepreneurs as for employees.

The allowance for parents is determined on the basis of annual income. The annual income is calculated for a reference period of 12 calendar months prior to the calendar month that precedes the start of the entitlement to allowance for parents.

The annual income for self-employed persons includes the confirmed income under the Self-Employed Persons’ Pensions Act (YEL) for the 12-month reference period. The annual income does not include wage income from one’s own company or income from self-employment. If the confirmed income under the Self-Employed Persons’ Pensions Act (YEL) has changed during the reference period, the average confirmed income is used. You can read more here.

As an entrepreneur, you work for yourself so legally you agree on the parental leave with yourself. In practice, however, you must also agree with your client if you are in project when the leave would take place.

Get in touch with us by applying for an agent – we’ll help you to get started and find you the first project!