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Job Ad | Accountant Tallinn

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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

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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

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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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e-Resident business Estonia

Starting your e-Resident business in Estonia | bank relations are important

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Estonia is doing a good job marketing its e-Residency and possibilities to register an e-Resident business in that EU country. Despite the latest security problems with the ID cards, e-Residency has been a success with over 20 000 applications. There has been discussion of what you can actually achieve by being an e-Resident of Estonia. One benefit is a smooth process of setting up a company in EU. However, there are problems involved.

There are some important aspects which should be considered when a foreigner is planning to go on with the company registration. Applying for a personal e-Residency is convenient and easy but it’s only e-Residency, not more. As it is stated quite clearly on their webpage, e-Residency is not a citizenship or a tax residency. However, e-Residency makes it possible to start founding the company in Estonia which takes at first only a few minutes. The first problem is the need for a local legal address and the second one is opening a bank account. The address can be quite easily obtained via some local service provider but the bank account is trickier.

The company needs to have a bank account and the traditional banks have very strict regulations of who can open an account and for what reasons. For example, the legislation in order to prevent money laundering puts the banks in a difficult position everywhere. That’s why it is impossible to open a bank account in Estonia without an actual  visit to the bank and without a reliable business plan. Even if you have a meeting at the bank, it does not necessarily mean that your new company will get the bank account opened . Your company needs to have understandable and reliable local relations in Estonia. If the main reason for founding a company in Estonia is to minimise corporation tax it is quite sure that you will not succeed with the bank. There is a good side of this bank control, though.

There are dozens of good and bad reasons why some people want to register their company in Estonia. If it is due to taxation, it can very easily be a bad reason. First of all you have to understand the distinction of your personal taxation and corporate taxation. Your first point of personal taxation is the country where your personal tax residence is. Normally that is the country where you live. The place of personal taxation is usually quite well understood. There is more misunderstanding with the corporation tax system, which is very appealing in Estonia. The current flat rate of 20% (decreasing 2018) is payable only when the profits are distributed out of the company.

The real tax risk concerns the country who can tax your company. If the business is physically in Estonia (shops etc.) and the management lives in Estonia there are not really any uncertainties. No other country has a right to tax the company.  However, the real situations with e-Residents’ companies are much more complex. The business is often international online business and the company owners/management live away from Estonia. The highly possible outcome is that the company is initially taxed normally in Estonia but the tax authorities of another country raise an interest in the income of the company. In theory, that would not normally cause double taxation since Estonia has tax treaties with several countries, which prevents the double taxation. However, it causes a huge administrational mess in practise. What was meant to be a light and smooth process becomes a nightmare of more complicated accounting, double tax returns and on-going correspondence with the tax authorities. As a summary: costs!

Thus, if you are already having troubles with opening a bank account at a traditional bank (SEB, Danske, Swedbank, LHV) you will most likely also face problems with tax authorities. We are fully aware that e-Residence organisation has come up with alternative solutions with the local bank problem but the risks described above remain. At the same time you might be left without some very beneficial bank services.

Digibalance is a true fintech company who still works in co-operation with the banks, not against them. For example our effortless and affordable AutoAccount bookkeeping service utilises the data which is easily available from the traditional European banks. The mostly automated routine bookkeeping sends your crucial financials to be available on your phone using our DigibalanceApp mobile application. Learn more http://www.digibalanceapp.com/

 

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Running small business in France – 5 steps for accounting

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We have made a brief and practical list regarding accounting if you’ve decided to start a business in France.

  1. Select your business form
    • The options are basically to operate as a self-employed or to register a limited company SARL. There are also other less common business forms.
    • Evaluate if you need to be VAT registered. It is not necessary if your annual turnover doesn’t exceed certain limits.
  2. Choose the most suitable income tax regime
    • SARL corporate tax is always based on the actual taxable profit it shows. The corporate tax rates are from 15% to 33,3%.
    • The self employed can opt to be taxed on certain percentage of the turnover of the business (tax status of micro-entrepreneur). The turnover means the gross revenues without any deductions. They also need to pay considerable social security payments based on the turnover.
    • The other option for the self employed is that the taxable income is based on the actual profit of the business.
    • The amount of income tax is assessed on a household’s total taxable income which means in practise that if your family lives permanently in France the tax is based on the total income of the family. The system is quite complex and there are also a lot of possible tax reductions and credits. The tax authorities calculate the accurate tax amount. Altogether the total of income and social taxes can be very high compared to many other European countries.
  3. Open a business bank account
    • You have a liability to open a separate bank account for your business purposes. It is important to keep the private transactions and business transactions apart from each other.
    • When choosing the bank group it is advisable that you make sure the bank can produce you the bank statement in XML format. That’s the standard confirmed by EU and it can be a basis for an effortless and affordable accounting.
  4. Organise the accounting
    • Invoicing software is very important tool if your sales are mainly based on billing the customers. Be sure to choose a modern digital invoicing software which is location independent and cost effective.
    • Basic bookkeeping is an essential part of the accounting and business management. It is smart and advisable that you organise your books to understand what is the real profit of your business, whatever is the taxation regime applied to you.
    • AutoAccount by Digibalance is an effortless and affordable bookkeeping system which is based directly on the transactions in your business bank account.
  5. Archive
    • The accounting of the business is based on the documents to confirm the transactions. It is important to remember to archive the documents. Most of them can nowadays be saved as electronic files on cloud services.
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Free consultation in Nice area

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Internations LogoHello! This time we have started a new campaign with InterNations targeted to entrepreneurs in France. If you have started your business in France and want to know more about financial management and running your business in general, we are now offering a free consultation meeting in the Riviera area. The meeting can also be held on Skype.

Even if you haven’t started your business yet and need help in the setting-up your books and other practical details, we are very happy to meet you and give you guidance in entrepreneurship.

Click here to read more and schedule a meeting

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Free consultation meeting in Finland

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Internations LogoHello! We have started a new campaign with InterNations targeted to entrepreneurs in Finland. If you have started your business in Finland and want to know more about financial management and running your business in general, we are now offering a free consultation meeting in our office in Helsinki or Turku. The meeting can also be held in Skype.

Even if you haven’t started your business yet and need help in the setting-up process and other practical details, we are very happy to meet you and give you guidance in entrepreneurship.

Click here to read more and arrange a meeting

 

 

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Starting Micro-entrepreneur Business in Finland – 7 Points to Take into Account

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Image of a start-up meeting

We have made a brief and practical list of things you need to think through if you have decided to start a business in Finland.

  1. Select your business form
    • The options are basically to operate as a sole trader called “toiminimi” or to register a limited company called “osakeyhtiö”. There are also other less common business forms.
    • The registration process depends on which business form you selected.
    • Be sure to register in prepayment register (“ennakkoperintärekisteri”) and also in VAT register if you know your business is VAT liable. The employer registration is not recommended if you are not employing other people on a permanent basis.
  2. Organize the accounting
    • Basic bookkeeping is an essential part of the accounting and financial management. You should start co-operation with an accounting agency which utilises digital tools to keep your bookkeeping affordable and effortless.
    • Taxation is based on the books and can be handled by the same accounting agency electronically when you have given the appropriate authorization.
    • Invoicing software is very important tool if your sales are mainly based on billing the customers. Ask your accountant contact for help when choosing the software.
    • If you’re planning to employ other people it makes sense to choose an accounting company who can also offer payroll services.
  3. Open a business bank account
    • You have an accounting liability concerning your business. As a part of that it is important to keep the private transactions and business transactions apart from each other.
    • Choose the bank group and appropriate bank services based on your accountant’s advice.
  4. Make the insurance agreements of at least the obligatory pension insurance (YEL)
    • Your accountant might be able to recommend you an appropriate insurance company.
    • If you will be employing you need also other obligatory insurances
    • As a part of risk management it might be wise to consider other voluntary insurances.
  5. Have a look if you’re entitled to the start-up grant
    • More information at the TE Office
    • Note! If you apply for the start-up grant you cannot start your business before the application is handled.
  6. Be sure of other possible permits
    • Some entrepreneurs see Finland as a bureaucratic country, some don’t. It depends on the line of business you are in. Find more information on the necessary permits especially if you are, for example, in the restaurant business.
  7. Start
    • Remember that the most important thing is to know what you sell and to find customers! You also need to keep your archives in order and respect the deadlines of invoices. There is support available for business administration but you have to be careful and buy only affordable services.
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Remote work is a way of life for Carina

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Digibalance accountant Carina Björnvik works from her home in Florence, Italy via remote work.

Digibalance's "office" in San Frediano, Florence

Entrance to Carina’s “home office” in San Frediano, Florence.

Carina “Cia” Björnvik has been working in Digibalance since 2015. Her work includes bookkeeping for different companies in different countries. Carina is originally from Finland, but she has chosen to remote work from Italy, where she moved in the beginning of the millennium. The flexible nature of the work made it possible to move to her husband’s home town, Florence. The family lives in the old central district San Frediano and they own a summer place in the countryside, just 20 kilometres from Florence, where work can also be done during the school holiday times.

Usually Carina starts working at 8 o’clock in the morning, when her son leaves for school. The first thing she does is checking and answering emails. Carina does bookkeeping for micro enterprises and self-employed from different fields of business. Also the customers’ backgrounds are often from different cultures.

For Carina, remote work enables the use of time more freely than in regularly scheduled work. Work can be done even in the villa or the work may be scheduled to do at an appropriate time, for example, when children are in school. However, even in remote work there must be some sort of a routine for the day.

In Carina’s opinion, the downside of remote work is that you do not see your colleagues very often or at all. You have to fill your social needs in somewhere else than work. You also must have some kind of self-discipline and the ability to create daily routines for yourself, since no one else is going to do it for you. In addition, especially in remote work, the importance of technological functionality is emphasized. If the Internet connection is down or your computer is broken, you have to figure everything out yourself, since you cannot just call the IT department to come and fix everything.

Prior to starting at Digibalance, Carina was already used to remote working in an international environment. She has worked in different countries and is familiar to the accounting practices in not only Italy and Finland, but also in the other Nordic countries. According to Carina, the Italian way of bookkeeping is still often very manual. In many companies the benefits of automation are not yet used in practice. Even though automation and remote work are slowly increasing in Italy, the biggest problem seems to be that the information is usually not in electronic form, which means both more manual work and massive paper consumption. However, Carina is continually making effort that Digibalance’s AutoAccount practices would be more widespread in Italy.

While Carina and her family make visits to Finland frequently, their plan is to stay in Italy permanently. However, the Nordic culture is far from forgotten! They often meet up with Swedish families who also live in Florence. Together they celebrate traditional Nordic festivities such as Saint Lucy’s Day.

Carina doing bookkeeping via remote work from her home in Italy.

Carina working remote from her home in Italy.

According to Carina, the possibilities of working from home have become a lot easier, when comparing to what it was before. For example programs like Teamviewer have made the internal workplace communication easier. Nowadays, being employed in a Finnish company is relatively effortless, even if you live abroad. As the technology and society develop, also remote work opportunities are constantly getting better.

”Once you are used to remote work, you don’t want to go back to the office work and 9-to-5 schedule.” Carina says. “Remote work is a way of life, which may not suit everyone, but for me it is just right.”

The majority of Digibalance's international customer's bookkeeping is done here.

The majority of Digibalance’s international customer’s bookkeeping is done here.

 

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