Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
Registration of an individual entrepreneur for IT in Europe
The development of information technologies, the globalization of the world, and business processes open up unlimited opportunities for individual entrepreneurs in the field of IT.
Recently, freelancers, software developers, web designers, and other IT specialists are increasingly contacting our company with questions about conducting legal business activities in the countries of the European Union.
In order to help you make an informed choice for the successful start of your IT activity in Europe, in this article we will consider five European countries with optimal conditions for registering an individual entrepreneur in the IT sphere.
Let’s start with our closest neighbors Poland, Romania, and Slovakia, and analyze the conditions for registering an individual entrepreneur in Portugal and Estonia.
Registering business in these countries you receive the following advantages:
- fast, inexpensive, and light process registration of individual entrepreneurs, in particular online;
- avoidance of double taxation (ratified Conventions with Ukraine);
- free access to market European countries;
- optimal tax load (is tax benefits).
Poland
The opening of JDG (jednoosobowa sznegorodcza gospodarcza) – the analog of the Ukrainian individual entrepreneur in Poland is chosen for the simplicity and speed of registration procedures that can be carried out remotely, the availability of opening bank accounts, the absence of strict control by regulators, developed infrastructure and social standards.
To register individual entrepreneurs in Poland you necessary:
- have a legal status – a permanent residence permit in Poland or EU countries/temporary residence status/Polish card;
- documents, what testifies a person and local number telephone;
- get TIN and EDS;
- choose species economic activity – KVEDs;
- after registration, JDG opens a business account with the banks of Poland Tax system:
- on a general basis – taxable net income = total amount received for services provided – expenses. The tax rate is 12% for the tax base up to PLN 120,000 and 32% above this amount. The tax-free minimum is PLN 30,000.
- linear tax – is 19% regardless of Sumy income
- flat tax of 12% for software developers (does not factor in costs).
Also, it is necessary to pay contributions for health care – Składka złodzówna – 60 euros/month. (first 6 months), after that Mały ZUS is paid, which can be calculated on the calculator.
If the income for the reporting financial year does not exceed EUR 2 million, it is possible to keep accounting records according to a simplified scheme.
Term registration individual entrepreneur in Poland — to 1 week
Slovakia
In order to register in Slovakia as a private entrepreneur (živnostník), it is necessary to prepare the following documents:
- foreign passport or Slovak GNP- card;
- a certificate of criminal record with an apostille translated into Slovak by a court translator ;
- a document confirming the right to use real estate for business activities or a virtual business address;
- the document, which confirms financial software residence (min. 3300 €);
- the document, which confirms financial software entrepreneurial activity (min. 5400 € ).
It is necessary to obtain a residence permit, which allows you to engage in entrepreneurial activity.
System taxation:
- 15% from clean profit with turnover to 49 790 EUR by reportable year;
- 19% after excess turnover 49 790 EUR/year. Monthly health insurance – 84.7 EUR.
In the first year is provided release from payment social insurance.
Romania
In order to register a PFA – a natural person authorized to carry out commercial activities, it is necessary to submit an application and relevant documents to the Commercial Register of the county court where the applicant has established his professional headquarters.
System taxation:
In case of exceeding the amount of income during the year 25,000 EUR, individual entrepreneurs are obliged to pay the general corporate tax – 16%.
Retirement deduction – 25% on annual income which exceeds 12 minimal wages fee
Necessary to note what registration analogs of Ukrainian FOP are not popular in Romania. In this regard, we offer you an alternative option for conducting business – a micro-enterprise.
Tax for these companies makes up only 1% at performance the following conditions:
- is although b 1 employee;
- annual turnover not more 500 000 EUR;
- shareholders, who have 25% statutory capital, are shareholders not more than in 3’s companies
Portugal
For registration individual entrepreneur in Portugal needs:
- have documents, which testify the person;
- open score in the bank Portugal (after registration individual entrepreneur changes status to “business account”);
- have official place registration in Portugal;
- get status temporary stay and tax number;
Tax system:
Progressive scale taxation – from 14.5% to 48%.
Maybe get status non-habitual resident with a rate Personal income tax — of 20%, and income received outside Portugal is not taxed at all.
Social tax — 21.4%, benefits in the first year. The opening of the individual entrepreneur takes several days.
Estonia
To register as an individual entrepreneur, it is necessary to submit an application to the commercial register in electronic form, which must contain data on:
- registered places of residence in Estonia;
- personal data of the applicant and his contact details;
- payment state collection (20 EUR )
Term registration by the portal electronic commercial register – 1 working day.
Tax system:
Rate tax on profit – 20% Social insurance – 33%.
As indicated in this publication information not is comprehensive Every case is individual and may have its own nuances regarding the registration procedure and the taxation system.
The lawyers of the company “Prikhodko and Partners” have many years of practical support experience and registration of our customers as private entrepreneurs, especially IT – specialists not only in countries EU but in everything in the world.
We are ready to offer you optimal jurisdiction, taking into account your needs, capabilities, and individual situation, prepare the necessary documents and information, provide advice on tax optimization, and provide full legal support at all stages of registration and interaction with state regulators.
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