Updated 25.7.2026
Guide
Light Entrepreneurship vs. Sole Proprietorship: Which Suits You?
The short answer: volume and expenses decide
If you invoice occasionally or as a side gig and don't want administrative responsibility, light entrepreneurship is usually the best choice. If your activity is regular and involves a lot of expenses, purchases or supplies, a sole proprietorship ("toiminimi") often becomes worthwhile. That's the rule of thumb this guide builds its comparison around.
As a light entrepreneur, you invoice your work through an invoicing service without having your own company: the service handles invoicing, taxes and reporting, and you receive pay. As a sole proprietor, you have your own Business ID (Y-tunnus), and you (or your bookkeeper) are responsible for bookkeeping, VAT and advance taxes. In return, you get more freedom and more tax planning options.
The most important thing to know is that this choice isn't permanent. Many people start as light entrepreneurs, test their business idea and customer base, and only set up a sole proprietorship once things have stabilized. Let's look at when each option is at its strongest.
It's worth looking at the whole picture rather than a single cost item: time spent on admin, bookkeeping fees, tax differences and your own capacity together matter more than any single percentage. That's why this guide covers the strengths of both models honestly, including the situations where Truster's light entrepreneurship isn't the best option.
When is light entrepreneurship enough?
Light entrepreneurship is strongest when you do gigs alongside a salaried job, studies or other commitments. Getting started takes minutes, there are no fixed costs, and if the gigs stop coming, the account can simply sit idle - no contracts to cancel and no company to wind down. The lack of red tape is a real benefit: no bookkeeping, no VAT returns, no advance taxes, no company sections on your tax return.
Light entrepreneurship is also excellent for trying out entrepreneurship. You can test whether there's enough demand for your skills and what prices customers are willing to pay, before committing to setting up a company. If the idea doesn't take off, there's nothing to unwind. If it does, you'll already have customers and an invoicing history by the time you move to your own company.
Light entrepreneurship works well in fields where the work is essentially your own expertise and time: for example consulting, design, teaching, cleaning, renovation work and creative fields. When your expenses are small and your income comes from work rather than selling goods, the invoicing service's fee is a simple, predictable cost.
Of course, light entrepreneurship has its limits. If your activity requires its own Business ID - for example because of permits, contracts or wholesale customer relationships - or if you sell goods in high volumes, the invoicing service model starts to feel restrictive. These, however, are signs that your business has already grown, and moving to a sole proprietorship is then a natural next step, not a failure.
When does a sole proprietorship pay off?
A sole proprietorship starts to make sense once your activity becomes regular and your cost structure grows. With your own company's bookkeeping, you can deduct business expenses broadly: tools, software, materials, vehicle costs and many other expenses reduce your taxable income. If you buy a lot of goods or supplies for your work, these deductions matter a great deal.
VAT treatment also brings advantages for your own company. A VAT-registered sole proprietorship can deduct the VAT included in its purchases, which lowers the real cost of acquisitions. Small-scale activity may also benefit from the statutory exemption for minor business activity, the current terms of which can be found on vero.fi (the Finnish Tax Administration's website). In addition, having your own Business ID can be an advantage in certain client relationships: some companies and public procurement processes require contracting partners to have their own company.
In return, a sole proprietorship brings obligations: bookkeeping must be arranged, tax returns and any VAT returns must be filed on time, and advance taxes must be paid based on your own income estimate. None of this is overwhelming, but it requires either your own time or money spent on a bookkeeping service. That's why a sole proprietorship is worthwhile only once the scale of your activity justifies the effort.
Setting up a sole proprietorship itself is quick and inexpensive, so the real question isn't the setup but the upkeep: every month brings its own rhythm of bookkeeping and reporting. A realistic estimate of your own time and willingness to handle admin is therefore the single most important factor in the comparison.
Comparison in brief: admin, expenses and deductions
Admin: as a light entrepreneur, the invoicing service handles invoicing, pay, withholding tax, VAT remittance and Incomes Register reporting. As a sole proprietor, you handle these yourself or buy the service. This is where the difference in time spent and peace of mind is greatest.
Expenses and deductions: a light entrepreneur can have costs directly related to the work taken into account when pay is calculated, and can make certain deductions on their personal tax return, but the options are more limited than for a business owner. A sole proprietorship deducts business expenses broadly in its bookkeeping and benefits from VAT deductions. The larger the share of your revenue that goes to purchases, the more the balance tips toward a sole proprietorship.
Security and pension: in both models, the entrepreneur's pension insurance, YEL, becomes relevant once your work income exceeds the threshold set by law, and for unemployment security both are generally treated as entrepreneurial activity. In this respect the models don't differ much, and you can get up-to-date information from Ilmarinen, TE services (employment services) and your own unemployment fund.
To help decide, ask yourself three questions: How regular is my invoicing, and do I plan to continue long-term? How large a share of my invoicing goes to purchases and expenses? How much time or money am I willing to spend on admin? If the answers point to occasional work, small expenses and a wish to keep things simple, light entrepreneurship is the right choice. If your activity is established and your cost structure is significant, work out the benefits of a sole proprietorship in detail, for example with a bookkeeper.
With Truster, the same account grows from light entrepreneur to sole proprietorship
With Truster, you don't have to choose a new service as your business grows. You start as a light entrepreneur, where the fee is 3.99% of invoicing or, alternatively, €55/month. When you set up a sole proprietorship, you continue on the same account with the sole proprietorship service, priced at 3.99% or €59/month. The all-inclusive Oma tili ("My Account") plan costs €59.90/month.
In practice this means your customers, invoice templates and invoicing history all stay in place, so you don't need to learn a new system right when entrepreneurship already brings plenty of new things to learn. The same app you used to send your first light entrepreneur invoice also serves you as a sole proprietor.
Our recommendation is therefore practical: if you're just starting out, begin as a light entrepreneur and let your business show you the way. Once your invoicing stabilizes and your cost structure grows, compare the options again and move to a sole proprietorship once it makes sense overall. With Truster, the transition is designed to be smooth.
In both models you get the same Truster core: easy invoicing, automatic reporting and Finnish-language customer service that understands the everyday reality of both light entrepreneurs and sole proprietors. You can also ask our customer service for advice on timing your transition - we're happy to help you compare options even before you've made a decision.
Frequently Asked Questions
Can I start as a light entrepreneur and switch to a sole proprietorship later?
Yes, and it's a very common path. As a light entrepreneur you test demand and pricing without commitments, and once your activity becomes established, you set up a sole proprietorship. With Truster you continue on the same account, so your customers, invoice templates and history all stay in place.
Which is cheaper: light entrepreneurship or a sole proprietorship?
It depends on the scale of your activity and cost structure. A light entrepreneur's cost is a clear service fee: 3.99% of invoicing or €55/month, with no other fixed costs. With a sole proprietorship you pay for bookkeeping and admin, but broader deductions and VAT benefits can make it more cost-effective overall once your invoicing and expenses grow.
Do I need a Business ID as a light entrepreneur?
No, you don't. As a light entrepreneur you invoice through Truster without your own company and receive your earnings as pay. However, some clients or purchases may require you to have your own Business ID, in which case setting up a sole proprietorship becomes relevant.
What kind of deductions can a sole proprietor make?
A sole proprietorship can broadly deduct business-related expenses in its bookkeeping, for example tools, software, materials and vehicle costs, and if VAT-registered, also the VAT on its purchases. The exact rules for deductions are available on vero.fi, and a bookkeeper can help you apply them.
How does the transition from light entrepreneur to sole proprietorship work at Truster?
Once you've set up your sole proprietorship, you activate Truster's sole proprietorship service on the same account. The sole proprietorship service costs 3.99% or €59/month, and the all-inclusive Oma tili plan costs €59.90/month. Invoicing continues in the familiar app without interruption.
Try Truster
The account is free and comes with no obligations. You only pay when you invoice.