Freelancing is becoming more and more sought after every year. It brings many benefits, but also in this area we can find pitfalls that need to be kept in mind when working "freelance". What specific steps do you need to take in order to enjoy working without the constraints of time and location? Here are some tips.
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1. Choice of the subject of trade
The first step towards your independence is to choose the trade itself. There are several types of trades. To work as an IT freelancer, we recommend you choose from the following freelance subjects:
Computer services,
computer data processing services,
advertising and marketing services,
brokerage services.
You can find a list of all freelance trades and their more detailed content definition HERE.
2. Choosing a business name
Have you thought about what business name you will use as a sole trader? Business names of natural persons have one condition. Your first and last name must appear at the beginning of the business name, and you can add your title to it. It may or may not be followed by the company name. Let's take a few examples:
Peter Kováč
Peter Kováč Solutions (company name)
Ing. Peter Kováč Solutions
3. Trade Office
There are two ways to set up a trade:
If you don't want to wait in line, you can apply for a trade online. If you have an ID card with a chip and have been assigned a BOK code, the trade can be processed easily via the www.slovensko.sk portal.
However, if you prefer to meet in person, the Trade Licensing Office will give you the necessary forms for setting up a trade. You will need to bring your ID card and sufficient cash.
You will need to go to the trade office to have all your trades registered on the trade licence certificate they issue. Don't forget that there is a fee (€5) for each trade. You can read more about the fees HERE.
The trade licence certificate will be ready within 3 working days. The trade offices will automatically complete some of the necessary formalities for you, such as:
applying for a criminal record,
registering as a self-employed person with a health insurance company,
registering with the tax office.
4. Social security contributions - yes or no?
One of the advantages of starting a business is that you are not obliged to register for social security until the second year of your business. However, this should be carefully considered, as the first year of non-registration does not count towards your pension and does not entitle you to unemployment and sickness benefits.
However, if you want to be sure, you can register with the social insurance company as a voluntary contributor.
5. Tax office and VAT number
We already said in point number 3 that the tax office will automatically register you with the trade tax office. You will receive a notification in the post from the tax office that your tax identification number (VAT) has been assigned. The VAT number will serve as your identifier whenever you contact the tax office and you will also use it on your invoices.
6. Setting up a business account
A business account is not a requirement, but in practical terms it will help you a lot in your business. You can find an overview of the best business accounts for 2020 HERE. However, setting up a business account with a bank means that you have to report this to the tax authorities within 15 days of setting it up.
7. Payment of taxes and insurance
Each sole trader must pay his own levies. We therefore recommend that you set up a standing order in your newly created business account to pay your health insurance contributions and later your social security contributions. Although a standing order is not a prerequisite, it will help you to worry less each month. As a sole trader, you can also take out professional indemnity insurance, which will protect you in the event of damage that may occur as a result of your business. You can include this insurance as an expense on your tax return.
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