How does freelancing work

How does freelancing work

Setting up as a freelancer is a little bit like setting up your own business. While every country has its own laws and types of business structures available for freelancers, the key factors to consider remain the same regardless of where you live or work. So, are you really interested in freelancing?

Then here’s what to consider when setting up as a freelancer:

• Type of legal entity to work under. To start working as a freelancer (that is, officially), you’ll need to register your business with the local government. Keep in mind that the legal entity you choose (e.g. Sole Proprietorship, Limited Liability Company) will impact the amount of taxes you have to pay, your personal liability and the amount of paperwork required — not something that should be brushed aside carelessly!
• Paying taxes (invoicing, expenses, tax returns, etc.). Once you register your business, you’ll be legally required to file tax returns and pay taxes. Putting a robust invoicing and expense-tracking system in place from day one can prevent you from plunging into complete chaos at the end of the financial year.
• Choosing an insurance policy for freelancers. Even if you go freelance, you should be able to enjoy the same security and peace of mind that you get when working for a company. It’s worth thinking about paying for a special health, business or income insurance for freelancers to protect yourself from the unexpected.