Corona crisis subsidies

There are hopes that the situation with corona infections will soon be under better control and that various restrictions will gradually be dismantled. However, some business sectors have already experienced significant financial damage and the future is still uncertain. We have gathered a list and comments on the different forms of support that have thus far been created and are available for small businesses.

Finnvera loan guarantees for bank loans, i.e. a state guarantee can be applied for directly through the bank. The terms of the bank loan are otherwise market-based, although banks have a more flexible view on instalment free periods than generally. Finnvera also charges fairly high fees for its own guarantees.

  • Business Finland offers aid-based business development funding in the disruptive circumstances, either for preliminary research or development of a new project. The applicant can be a company employing 6-250 people (including entrepreneurs). Employees may be laid off at the time of application.

The benefit can be granted for 80% of the total cost of the project and up to 70% of the grant may be paid in advance. Preliminary research funding, Companies may use the funding to investigate and plan new business, alternative subcontracting chains and organize the production in the event of a disruption and for the future. The recommended project duration is 4 months and the maximum project funding is EUR 12,500. Development funding, Companies can use the funding to carry out development plans as identified in an exploratory study or otherwise in their operations, in order to improve their potential for success during and after the disruption caused by the coronavirus. The aim must be to create new solutions for the company relating to products or production. The recommended project duration is one year and the maximum budget is EUR 125,000.

It is important to note that these grants cannot be used for normal running costs (wages, marketing, rents), investments or, for example, or technical setting up of e-commerce. Instead, the wages and other costs allocated to the project must be related to planning or new development. The demarcation is sometimes really tricky, but it is definitely worth keeping the subject in mind when applying or amending an application. NB. You can complete/edit your open Business Finland application until it is processed. The necessary financial information for the application is minimal: number of employees, project costs, project financing plan. In addition, it must be defined how the corona crisis has made the situation more difficult for the company.

  • Ely Centres grant funding either to carry out a situation analysis or for business development measures. A business with a maximum of 5 employees is eligible for funding regardless of the company form. However, funding cannot be granted for a private entrepreneur alone, the project must involve at least two people in one way or another.

The maximum amount of funding for situation analysis is 80% of the calculated costs (e.g. wages 2000 eur/month), but a maximum of EUR 10,000. The maximum amount for development measures is 80% of the actual costs approved, to a maximum of EUR 100 000. The definitions of acceptable costs follow the main principles of Business Finland’s guidelines.

Interpretations of who can apply for funding have at times been difficult. Applications have been accepted, e.g. in a situation where the applicant was a jointly owned company of two entrepreneurs, but has paid only one person’s wages. Or a company that previously has paid no wages at all, but is hiring outside workforce for a development project. However, it has been difficult to include the entrepreneur’s own wages in the project, if wages have not been paid in the past. There have been different interpretations here, too.

In general, the Ely Centres have cut the financing decisions quite a lot compared to what the applicant has proposed. The total cost of the projects has also been limited to a maximum of 30% (-50%) of the turnover. For new companies, the turnover used may have been the future projected turnover.

Here too, the necessary financial information for the application is quite minimal: the number of employees, turnover and the balance sheet total of the past 5 years. In addition, the costs of the project and the funding plan. In addition, it is necessary to clarify how the corona crisis has complicated the companys situation.

Note. The ELY Centre application cannot be revised/edited after it has been submitted.

  • Operating support for sole entrepreneursSole entrepreneurs can apply for a one-off operating aid from their municipalities. The channel for applications vary, but the basic principles are the same:
    • The potential grant amount is EUR 2000 and is intended for the company’s running costs
    • The entrepreneur must justify the full time activity either with a valid YEL insurance or an annual turnover of more than EUR 20,000
    • The last financial statements and a tax debt certificate, which can be stored in MyTax, are required as attachments. If there are tax liabilities, a payment plan must be agreed with the tax administration. In addition, it has to be clarified that the coronavirus has weakened the financial situation of the company, i.e. in practice the turnover has decreased by at least 30% from the normal situation. The requirements for this justification vary between municipalities.

The support may only be granted once, but the application period should be open until autumn. It is therefore recommended that you apply for this support only when you are able to properly justify a decrease in turnover. This is likely to be seen in the April Income statements at the earliest.

  • Restaurant support The government’s proposal for support for restaurants is still under discussion in parliament. The final form of the aid and the application time/method remain to be decided, but the formulae for calculating the aid appear rather difficult at this stage.

The aid proposal includes two parts, one for employment support and another for the reasonable reimbursement of costs during the period of cessation. The amount of aid for employment is proposed at EUR 1 000 per eligible worker. That aid would be paid for an employee that is paid at least EUR 2 500 for the three months following the end of the restriction obligation.

The costs would be reimbursed for rental and running costs accrued during the closing period. They are intended to be proportional to the change in the company’s sales compared at the beginning of the year. This comparison would be based on the January-February VAT return information.

The rebate share would be 15 % if the company’s average sales in January-February did not exceed EUR 1 million. For sales exceeding EUR 1 million, the rebate would be 5 %. A maximum amount for a restaurant could receive EUR 500 000. In addition, the support would be reduced by any ELY or Business Finland development grant that the company may already receive.

  • Temporary unemployment benefit for entrepreneurs According to the temporary legislative amendment, an entrepreneur can receive labour market support from KELA when the income from the business has decreased due to the coronavirus.

The marginal income for receiving labour market support for every person working as an entrepreneur in a business is EUR 1090 per month,  or strictly speaking, the entrepreneurial income is less than EUR 1 089.67 /month due to the pandemic. The amendment is valid between March 16th. – June 30th. 2020. The benefit is applied for from KELA.

With regard to earnings-related allowance, no changes in the unemployment security for self-employed persons were made. Earnings-related allowance can continue to be paid to an entrepreneur who has fulfilled the employment conditions if the business activity has ceased, the work in the business has ended or the business is part-time or short-term.

  • Other new support There will be another financial aid available for any business who has suffered from corona crisis. This support is not restricted to any particular line of business as long as it is obvious the turnover has declined dramatically. The details how to prove that are not clear yet but the consideration will be based on the application of the business owner and the tax information. Most likely it has to be shown that the revenues have declined at least 30%.

This support can be used for operating expenses as rents and salaries. The amount is anything between 2000 and 200 000 euros and is based on the size of the business.  The applications will be handled at the State Treasury and it is estimated the application platform will be open in the month-end of May/June.

If you have already received other government financial supports they will be deducted from this new support. However only 70% of Business Finland or ELY supports are taken into account.

A notification of beneficial owners of limited liability companies (Oy) and cooperatives to the Trade Register

A notification of beneficial owners must be made to the Trade Register by 1 July 2020. The beneficiaries are defined as follows:

A beneficiary shall be considered to be a person who fulfils at least one of the following conditions:

  • He owns more than 25 % of the company’s shares, either directly or indirectly through another company.
  • He holds more than 25 % of the votes in the company, either directly or indirectly through another company.
  • He exercises effective control over the company on other grounds. Other grounds may be e.g. a shareholder agreement.

Note! The company must submit a notification of beneficial owners even if the company does not have beneficiaries that meet the above requirements or they are not known to the company. In this case, in accordance with the Money Laundering Act, PRH enters the members of the Board of Directors, the CEO or any other person in a similar position as beneficiaries in the Trade Register.

The requirement does not apply to sole traders or partnerships if only private persons are shareholders! In practice, however, even small limited companies and cooperatives will have to submit detailed information to the Trade Register about the owners of the company. The information to be registered includes the name, personal identification number, nationality, municipality of residence and ownership information. However, it is worth noting that this information will not be publicly available in the Trade Register. Access to the information requires a purpose in accordance with the Money Laundering Act.

Digitase is now making Finnish beneficiary notifications

Please confirm by May 25, 2020 if you would like us to make this declaration. The charge is EUR 30.50 (+VAT) and the information is submitted with the owner information in accordance with the company’s last tax return. The easiest way to place an order with us is via the DigibalanceApp mobile app under Consulting – Order with app. You can also assign to AutoAccount autoaccount@digibalance.eu or consultant service konsulttipalvelu@digitase.fi

 

Be safe,

Mikko Ilves
Chairman of the Board
AutoAccount OÜ and Digitase Oy

 

 

 

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The coronavirus crisis

The coronavirus crisis

The operating environment for small businesses changed overnight when practically the entire EU was shut down. Many entrepreneurs’ revenue has plummeted, and no one knows how long the ongoing crisis will last. For entrepreneurs, this is a battle for survival, in which the primary goal is to quickly adapt cash flows. This mainly means postponing larger payments in order to move past the worst crisis period and to think about possible long-term operational adaptation measures.

Unfortunately, solutions are rather limited in this regard. Still, we have listed some ways for mainly our customers in Finland to be flexible, which include:

Removing or lowering advance tax. Even in normal conditions, there is no sense in paying excessive advance tax (as a company or an entrepreneur). When cutting expenses quickly, advance tax should be removed first and foremost. We are able to make the required changes electronically almost instantly. All you need to do is give us the assignment either by email at konsulttipalvelu@digitase.fi or via DigibalanceApp. Please remember to always include your customer ID and your annual profit estimate. DigibalanceApp currently overestimates these figures, as the situation has quickly changed from earlier months. NOTE! We can also arrange a solution where advance tax for this year is suspended to only include what has been paid so far, i.e. payments for the rest of the year are removed. If the situation goes back to normal, the estimates should be reviewed later in autumn.

Mandatory pension insurance premiums. Large pension insurance companies have started offering slight flexibility regarding insurance payments. This mainly affects terms of payment. For instance, the insurance company Ilmarinen announced that penalty interest will not be applied to entrepreneurs’ pension insurance (YEL) payments that are due March 20th, 2020, and these will not be moved to collection at least until the end of April. The employment pension industry is currently drawing guidelines for pension payments, but all of them will likely revolve around more flexible terms of payment. We will monitor the situation.  

Instalment-free periods. Banks are currently very understanding about instalment-free periods for loans. Interest must always be paid, but if you have instalments due soon, it is recommended to contact your bank and agree on an extra instalment-free period of six months. This applies to everything from corporate loans to mortgages. The solution is again to delay payments, but the relief is more efficient than with pension insurance premiums for instance. In this case, payments are postponed permanently.

Lowering rent. There have been recommendations in the media to contact your landlord and negotiate compromises. As entrepreneurs are well aware, this is a difficult equation if the landlord is another small business. In cases where the landlord represents the so-called institutional level, such as an insurance company or a bank, flexibility is more likely. Anyway it is recommended that you determine the situation if rent is a major part of your company’s expenses.

Sanctions for delayed tax payments. Finnish tax authorities have listed some small tax reliefs regarding doing business with them. The concrete message has almost always been that late fees for VAT will not be collected (the VAT itself will). However, this requires a separate application. You could also apply for a postponement for filing your tax report due to e.g. illness, but as it’s included in AutoAccount services, there is no need for it right now.

Make sure to keep your VAT reports up to date in the current situation. When turnover plummets, expenses will often continue as normal for some time. It is thus important that you send us your regular monthly information on time for us to process VAT reports. Doing so ensures that possible VAT reimbursements will be paid quickly.

Employee lay-offs. If you employ outside staff with a fixed salary, fast lay-offs are an unfortunate but realistic procedure. Lay-offs enable cutting off payment of salaries fairly quickly, but they require following statutory declaration procedure. Check with the union that drafted your collective agreement for further details. If you are not under any collective agreement and your payroll is handled by Digitase, you can ask about lay-off procedures from our payroll administration.

Finnvera/Business Finland/ELY centre According to government announcements, at least Finnvera’s financing potential has been increased significantly. The importance of this procedure in an acute financial crisis is unclear, but we will keep an eye on the situation. If you think e.g. extra loan funding would save your business in the current situation, we recommend following Finnvera’s, Business Finland’s and the Centre for Economic Development, Transport and the Environment’s (ELY) options, which are listed on their websites.

In summary: right now, the goal is to adapt expenses to the plummeted income, using the aforementioned procedures among others. When the situation begins to settle, it is prudent to think about your business comprehensively, i.e. to think about current expenses in relation to expected turnover on a long term. It remains to be seen whether the current situation changes the operating environment of entrepreneurship for good, or if it’s a temporary setback.

Note! If you catch coronavirus (COVID-19) yourself and/or you are otherwise ordered under quarantine, as an YEL entrepreneur you are eligible for KELA’s specific daily sick allowance. For more information about the subject and applying, visit KELA’s website.

 

AutoAccount services

We apologize for the heavy traffic in some of our operations earlier this year, which is due to the seasonal rush of financial statements and tax reports. In addition, there has been an unprecedented number of problems outside of our control in getting email through, as well as sending and receiving email. We have worked hard on the matter both ourselves and with the help of third-party service providers, and the worst is now over. Unfortunately, something similar may occasionally happen again. We recommend defining all emails addresses ending in @digibalance.eu and our invoicing address noreply.e-invoice@tix.tieto.com as so-called trusted addresses in your own email. You should also add addresses ending in @digibalance.eu in your email application’s contact info. If you use our payroll service this concerns also address palkat@digitase.fi

We highly recommend using DigibalanceApp in order for you to avoid possible email-related problems. More information and a download link are available at http://www.digibalanceapp.com/customership-1/. Note: you can also use the phone application on your computer browser if you so prefer. You can find the browser version here: https://digitase-mobile.herokuapp.com/login

Please note: if you continue to use the old link for reporting sales as an AutoAccount customer, we will automatically redirect your usage to DigibalanceApp’s mobile and web versions, starting this June!

Finnish tax returns are due either by the end of March or April. Since you are our AutoAccount customer the business tax return is a part of our annual closing service. You do not need to file the business tax return of your company or sole trader business income. We submit those electronically before the deadlines. You will also get a pre-filled personal tax return from the tax office. It is recommended that you check the information is correct but that involves only other income than business income.

Digitase AutoAccount has emphasized digital operations for its entire lifespan, which has included organizing operations to support remote work. Due to coronavirus, our entire staff is currently working remotely for the most part, and our operations are continuing as normal. For the time being, we will organize possible face-to-face meetings only as video conferences, using e.g. Skype.

Be safe,
Mikko Ilves
Chairman of the Board
AutoAccount OÜ and Digitase Oy
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Accounting service

Entrepreneur’s Money is Wanted | Accounting Service Needed

Accounting service

Entrepreneurship is a fancy kind of sport where one needs to be even more strict regarding money than in his or her personal life. An experienced entrepreneur with accounting service already knows how to deal with different kind of other services which are offered almost as mandatory, although the only certain thing is that they cost money. The rumba begins already when you register your business and at the same time give your contact details. The amount of incoming e-mails, phone calls or even paper mail increases at once. It’s not even guaranteed to be avoided from the bombarding of telemarketers when leaving the phone number box empty since they can carelessly track your current employer’s number given to you. Today there are still companies which take their own privilege to interrupt anyone’s work day and start to sell their products with an endless monolog. However you can’t really give an advise to a start up entrepreneur not to take calls from unknown numbers. Blocking telemarketer’s phone numbers is instead advisable as unnecessary contact attempts start. It’s also recommended to end irrelevant phone calls as quickly as possible and save time for both. However I try to do my best to be polite in these situations since the caller is just doing his or her work and trying to earn a living.

What is Entrepreneur’s Money Desired For? 

First comes to mind insurances, spots for advertisements, phone and telecommunication, electricity contracts, different kind of software and administration services like accounting services. Before I comment on the software and accounting services very familiar to me, I want to pay attention to mystical “business subscriptions”. The only specialty seems to be their higher price compared to consumer subscriptions. Let’s take internet connection subscriptions as examples. It is very hard to get the seller to accept that one wants to buy a similar connection for a company use which is aimed for a private use. ”Well, it is basically our consumer sector’s products which can’t be sold in this case” kind of explanations have become very familiar to me. In the business subscription there are either more services than you will ever need or it might be so that there is no real difference at all when it’s compared to consumer subscription. The only difference is the price which is higher for companies.

An interesting single experience was with an IT application which was aimed for optimizing the electricity usage. The only difference between the company and consumer option was, in addition to higher price, the possibility for monthly payments instead of a single one-off payment. When there was no need for that the next argument was that this consumer subscription can’t be sold to a company. When I didn’t get an answer to ”why not” in the end, I of course made the more cheaper consumer order but under the company’s name as the use was going to be business related. There is also a trap for this topic that one of the requirements for VAT reclaims is that the expense receipt usually has to be under the business name! So when you make purchases for the company you should always try to avoid invoices and receipts with only your own name. And even if it is a tax deductible expense it doesn’t mean it’s free! This kind of misunderstood sale attitude I have also noticed in practice.

Although many offered services like all-inclusive insurances sound reasonable, an entrepreneur has a great risk to drift into a situation where different kinds of fixed administration costs are bigger than the revenues.

Entrepreneur’s Finance – Don’t Underestimate the Common Sense 

AutoAccount is selling accounting services and therefore I am slightly biased to comment on their active sales efforts. I can however say that as long as I can influence on the company we will not do so called cold calling where a number is picked from a list and one calls and tries to sell accounting services. Nowadays the services have to be brought to an entrepreneur’s attention by other means. In addition I recommend you to be very careful about what level of financial management services your size of a company needs. For example if you are a self-employed or you are managing a small company which employs a couple of persons, a basic online accounting service is probably enough. You won’t necessarily need versatile software where the most familiar feature will probably be its fixed monthly payment. It’s recommended to choose a reasonably priced accounting service which however enables to keep your financials available and in your own hands. Often it is also beneficial to brainstorm your own thoughts with someone outside your company but it is dangerous to think that an external consultant knows your specific business better than yourself. Therefore you shouldn’t underestimate yourself as the expert of your own company since no one has spent so much time thinking about your company’s matters.

Micropreneur’s financials can often be controlled by the following information: cash based accounting, bank account balance, the total balance of unpaid expense bills and estimation of the taxable income. This information can be managed and be available very inexpensively with the functions of bank services and online accounting service AutoAccount.

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog/

 

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Starting a Finnish limited liability company (Oy) without share capital

Starting a Finnish limited liability company (Oy) without share capital

A fairly inconspicuous change that allows starting a new limited liability company entirely without share capital took effect on July 1st. We establish companies with customers regularly and just last week postponed the registration of one. This wasn’t because the customer was unwilling to invest in their new company, but for the practical reason that online registration would needed to have been processed by the end of the week. From now on, starting a company online will always be done without share capital.

Especially new entrepreneurs have often had misconceptions about the meaning of share capital. A common one is that this so-called restricted shareholders’ equity is similar to expenses, and becomes unavailable. In practice, money invested as share capital will be immediately transferred to the company’s bank account, and can be used for normal expenses. In bookkeeping, the money has been tied and unavailable to be e.g. returned directly to the owner personally. Considering that nearly all business requires some sort of financial investment in the beginning, a share capital requirement of €2,500 has typically not been an issue. However, removing this requirement makes it easier to start a company, as an entrepreneur can complete the registration immediately and only then specify how much financial investment they need. It remains to be seen whether this is a good or a bad thing. Most likely it will be a bit of both.

Small delay can lead to harsh penalties

One aspect of share capital investing is that the small preliminary investment of shares in the company provides more incentive for the mandatory organization of the company’s administration to be taken seriously. Larger penalty payments imposed by tax authorities create a situation where even a small delay in e.g. establishing bookkeeping can lead to costs for the entrepreneur. I have witnessed situations even this year where an entrepreneur has accumulated over €1,000 of mandatory penalty by submitting reports of intra-community sales late and incorrectly written. This is only one example of situations in which a company founded easily and flexibly between friends has quickly gotten into trouble. Similar problems are sure to increase as starting a company is made easier.

The importance of a company’s bank account

An essential viewpoint into the topic is postponing the opening of a bank account. Because of requirements imposed onto banks, entrepreneurs have occasionally found it nearly impossible to open a bank account. However, starting a limited liability company currently requires such an account, and the prerequisites of opening one have been considered before registering the company in the first place. Since share capital investments are not required, a company can go into business before having a bank account. This can easily cause problems, as the company’s pay traffic is managed using e.g. employees’ own accounts or online payment services. In my Finnis blog post from 11.12.2017 I wrote about how essential being a bank’s customer is to a company. The matter can even be justified by direct cost savings by taking into account how e.g. we at AutoAccount can manage bookkeeping using digital information from banks at a much lower price than the rest of the market.

Starting a company is easy – closing one is not

Despite the previously discussed possible issues, I do not mean to decry this entire update. For instance, we ourselves have founded a subsidiary in Estonia entirely without share capital, since the nature of the business did not require new capital. When needed, the means for investing can be found from other sections of bookkeeping besides share capital. In Estonia, the option to distribute dividends is tied with paying share capital, which for Finland’s benefit does not seem to be included in the new changes.

Many business ideas are based on one’s own skills and know-how, and actual material purchases are barely needed. When a society sends a message to remove obstacles to entrepreneurship and self-employment is more common than before, the change is justified. If, for instance, one’s own employment depends on having to invoice customers through one’s own company, the possibility to easily start an LLC/Oy is welcome. However, an Oy is a less risky option than a business name of a self-employed in regards to e.g. responsibility matters, even for a one-man business.

A tip for new entrepreneurs: despite the seeming ease, do not start a limited liability company without a concrete plan for the future. Starting a company is now easy, but it brings with it a managerial burden, and shutting it down is its own expensive and arduous process.

 

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog/

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AutoAccount starting strongly in Estonia

location independent bookkeeping

Toomas Schipai (left) is the expert in Estonian accounting and Mikko Ilves in overseas services. There’s a skilled location independent bookkeeping team also in Finland.

AutoAccount Tallinn office started in November 2018 providing effortless location independent bookkeeping services for English-speaking micro entrepreneurs with registered business in Finland, France, Estonia or UK. Service is totally location independent and currently the customers represent dozens of nationalities worldwide. The growing customer group are the e-Resident companies registered in Estonia.

MBA Toomas Schipai started in Tallinn office in the beginning of the year. He works as an accountant and an expert of Estonian bookkeeping and taxation. As a matter of fact Toomas is quite an expert in Estonian accounting and is also giving lectures concerning the subject. He also has a long background working in international Nordic companies.

BREXIT puts many English entrepreneurs in a new unknown position how to go on with businesses within EU. UK registered companies will most likely be left out of AutoAccount scope. However e-residency and EU-company is an excellent solution how to ensure the on-going business in the future. Mikko Ilves at AutoAccount has a long experience in working with English businesses and can assist with the start-up process and the company administration.

AutoAccount location independent bookkeeping services are available online and office services, for example registered company addresses, in the heart of Tallinn at Metro Plaza business centre.

 

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog/

 

 

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Digitase Oy is the accountant partner in a Startup Kit of Business Finland

Business Finland attracts foreign entrepreneurs to Finland with a new Startup Kit | Business world’s baby pack brings together vital services and contacts

The new program supports the access of foreign experts to the Finnish market. Business Finland’s Startup Kit helps entrepreneurs in Finland to survive in the business startup process, so the entrepreneurs have time for business development and integration into the new country. Similar programs are also available in Canada, New Zealand and France.

Business Finland aims to facilitate the access of international top experts to the Finnish business market by launching a new Startup Kit in Slush. Startup Kit complements Startup Permit which was published in April. Startup Permit is a residence permit for teams from outside the EU, but the new service can also be used by entrepreneurs from within the EU.

Marjo Ilmari, Executive Director from Business Finland compares the service to a kind of business ‘baby pack’.

“It takes courage to pursue your career as a startup entrepreneur. Even more courage is required if you establish your startup venture outside your home country. The package is like a starter kit for new parents, containing all the necessary maternity services and equipment for a newborn. We wanted to bring the same idea to the Finnish business world as well.”

Finland Startup Kit provides all the information about the process and services that different public and private stakeholders can offer to make settling down to Finland easier. The Startup Kit brings together partners who can help the entrepreneurs for example in finding board members and providers of banking, insurance, IP protection, health and accommodation services. Startups are also guided by business mentors to help new entrepreneurs start up in Finland. The entrepreneur gets the services provided by the partners when they register the company in Finland.

“By the end of November, more than 100 non-EU companies from over 20 countries have applied for the Startup Permit. It’s a sign that international experts are interested in Finland,” Ilmari says.

“An international competition for talented entrepreneurs is fierce and, for example, Canada, New Zealand and France offer similar programs. However, Finland has one of the best startup environment in the world* and it has a reputation as a startup-friendly venue with strong technological know-how. It is important to support the development and innovation of our business by opening it up to international companies as well.”

The now-released Startup Kit will be constantly developed to match entrepreneurs’ feedback and partners’ services. Currently, the partners are OP, Leitzinger, Forenom, Terveystalo, Elisa, Whim, Boardio and Digitase, and the service package is continuously seeking new partners from companies and organizations operating in Finland.

Business Finland also offers startup companies Tempo funding, which foreign entrepreneurs can apply for after starting their business in Finland.

 

Business Finland:
Business Finland is the Finnish innovation funding, trade, investment, and travel promotion organization, headquartered in Helsinki. Business Finland is fully owned by the Finnish Government employing some 600 experts in 40 offices globally and in 20 regional offices around Finland. Business Finland is part of the Team Finland network.

 

 

 

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog/

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legal address tallinn estonia

AutoAccount OÜ Tallinn office opening – legal address Tallinn Estonia

AutoAccount is a bookkeeping service designed for international digital nomads and we also provide a legal address Tallinn Estonia. The service is fully location independent and online. Although the process is electronic and digital there are always professional accountants who are completing the books. Despite the team of remote employees we also need a head office where the company is managed from and which is conveniently located for face-to-face meetings. AutoAccount OÜ office was opened today at Metro Plaza Tallinn and currently run by the Board member Mikko Ilves.

A rapid change of European environment creates more demand on location independent services for entrepreneurs. For example immigration and BREXIT have increased enquiries about EU registered companies and digitalisation has made it possible to run the companies remotely. Especially Estonia has invested in e-residency possibilities within EU. The country has enticed thousands of new registered companies who require also local accounting service and legal address Tallinn Estonia. AutoAccount is a tested online bookkeeping service in English and ready to go for this target group. It has to be remembered though that e-resident company cannot normally be used for tax planning. As a matter of fact it can mean a tax residency in several countries.

–Especially Finnish entrepreneurs have sometimes misunderstandings how the business in Finland could be run from Estonian company, Mikko Ilves from AutoAccount OÜ describes. One of our tasks is to guide the business owners in taxation issues to avoid unpleasant surprises.

Our accountant team can provide cost efficient monthly bookkeeping also in other European countries like France and Finland. This requires local expertise in annual statutory reporting which is available via Digibalance group.

AutoAccount OÜ offers also virtual office services at Metro Plaza office and is currently looking for one junior and one senior level of accountant as a part of the launch in Estonia. More information by e-mail autoaccount@digibalance.eu

 

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog/

 

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Job Ad | Accountant Tallinn

Finnish-owned AutoAccount OÜ is expanding its Estonia-based operations and is starting up an office at Metro Plaza Tallinn. Our micro entrepreneur customers represent a wide range of nationalities running their businesses in several European countries. We will produce our unique English AutoAccount services in Tallinn with a strong focus on e-Resident business owners.

We are now looking for an international minded accountant to work in our new Tallinn office. The appreciated features are as follows:

  • A suitable education for example in business administration
  • A few years of work experience in accounting
  • Solid knowledge of Estonian business taxation
  • Fluent Estonian and English. Preferably some level of Finnish
  • Basic IT skills
  • Good understanding of international business communication

We offer an exceptional opportunity to work independently in an international environment with the state of art software and applications.

Please send your application with a salary request (assignment through your own company is also possible) or additional questions to mikko.ilves@digibalance.eu by 6th of August 2018. We aim to fill in the position in the beginning of September.

 

 

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Digital nomads | Monaco

Accountant for digital nomads

Monaco is the famous principality in French Riviera and is well known for its rich and famous residents. I agree with many people that the place itself is beautiful, clean and safe, which partly explains why so many people would like to move in there or digital nomads just hangout. However, there is one major financial reason why it is as appealing as it is: the lack of income tax.

There are some features about Monaco which are not so well known. The official population is around 38 000 inhabitants including original Monegasques and residents with a foreign background. The unemployment rate is practically zero and as a matter of fact Monaco employs over 50 000 people on a daily basis! Thus, companies located in Monaco employ a huge amount of people living in surrounding areas in France or Italy. These are “normal”, hard-working people who pay their taxes.

It is true though that there is no personal income taxation in Monaco. It concerns people who live in Monaco and have a status of residence which is the key for all the financial benefits in the town. It’s not exceptionally expensive to hang out and live in Monaco. If you avoid certain exclusive restaurants and bars you don’t really spend more money than in any European capital. Food and daily consumables are available in markets and the price level is reasonable. Wine, of course, is much cheaper than for example in the Nordic countries. What makes the difference is housing. If you ever visit Monaco I suggest you have a look at the real estate ads. The acquisition prices or rents of quite moderate apartments are phenomenal. You can find a studio with less than a million euro but that’s about it. So this is the real downside of the zero taxation. The moral question might be that are you willing to pay to your local government for maintaining the society or real estate investors in Monaco? Fortunately that is not my question to answer.

There are a lot of stories how difficult it is to get the residence permit and how super rich you need to be.  That is not exactly how it is. There are two main requirements for a residence permit: you need to have a place to live in Monaco and you must be able to prove you can afford to live in the principality. In order to do that, you need to work in Monaco or if you don’t work you must have that huge bank balance. Since it is very difficult to find a job in Monaco you can always work in your own local company as entrepreneurs do everywhere.

It is not too difficult to start a SARL company and run your business through that. You might be used to a little lower share capital requirements, but 15,000 euro in Monaco is not unbearable. There is local help available for registration, but it is not too difficult to do it yourself if you can cope with written French. All the modern business services like virtual office, co-working spaces etc. are at your reach. Please note that the income of a company is not tax free. As a matter of fact, the tax rate is quite high 30%. However, if you work for your company and are a resident, it might be a good idea to pay you enough salary (tax rate 0%) and avoid showing too much profit in the company.

In the end I need to emphasize one big downside of being within Monaco’s zero taxation. You need to cut the ties, at least to a certain extent, with your original home country. You probably don’t want to end up in the situation where you have to pay income tax to your home country AND high rents in Monaco. In practise this usually means that your near family needs to be able to live with you in Monaco, you are not spending too much time in your original home and you are not a part of the social security in your home country anymore.

Please acknowledge two things regarding this post update: First, the author is not, and will not be, a Monaco resident. Secondly, this is a blog update of personal observations, not a guideline or any piece of consultation advice. That would need to be much more detailed. There are also more practical tax efficient options than Monaco to register a company for a digital nomad. For example, utilising the e-Residency in Estonia.

Author Mikko Ilves is an entrepreneur and the Chairman of the Board of Digibalance Group. More blog updates: www.autoaccount.info/blog

 

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Communication with accountant

Clear communication is one of the key issues when running your business successfully. It is, of course, important in marketing and sales but also with administrational relationships. I just had a meeting with a micro entrepreneur from Eastern Europe who was disappointed with his accountant. He was saying that there were a lot of errors in his books and due to that he had paid too much VAT. I am used to hearing a lot of this kind of talking from the business owners who are generally frustrated to pay different kind of taxes and social payments. However, this gentleman was so anxious about the case that it attracted my interest to hear what kind of problems there had been. He showed me the cash sales reports and we compared the totals with the revenues in the Income Statement. Quite soon it was figured out that there had been confusion with the monthly sales and the accumulated sales, which mean the year-to-date sales from the beginning of the year to the end of the current month. Thus after a few months the sales in the books were already more than doubled from the actual. Consequently, too much VAT had been reported.

Then we discussed how this is possible. The accountant had a long experience, some authorization letters below the name and worked for a proper accounting company. It was obvious that the problem was a communication problem, not from the lack of professional skills. As seen in this case, the communication between the entrepreneur and the accountant needs to be very exact and detailed OR the process needs to be formed so that misunderstandings can be avoided. In this particular case, the foreign language and background played a certain role since the accounting company was not accustomed to the customers with an international background.

Based on this story I was once again ensured that we are on a right track with Digibalance’s AutoAccount service. The whole service supply is built in English and all the possible phases are automated or planned to avoid human errors.

The role of the accountants is more like controlling the books not entering data from unclear papers. The key financials can even be sent directly to the customer’s phone.

The outcome of this conversation with the entrepreneur was that we have one more satisfied AutoAccount customer!

The author is Mikko Ilves, the Chairman of the Board at Digibalance Limited

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