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Working as an entrepreneur affects your income security in many ways.

Being self-employed affects which unemployment fund you can join, how you accumulate working time and in which situations you can get daily allowance.

If you work full-time as an entrepreneur, you are not entitled to unemployment benefit.

If, on the other hand, you work as a light self-employed person or only on a part-time basis, you may be entitled to an adjusted daily allowance.

Who is an entrepreneur?

If you are gainfully employed without being in an employment relationship, you are self-employed for unemployment benefit purposes.

You can therefore be considered self-employed, even if you are not obliged to take out self-employed person’s pension insurance. This can happen, for example, if you work on a small scale through an invoicing company.

A part-owner can also be self-employed for unemployment benefit purposes, even if there is no obligation to take out insurance under the self-employed persons’ pension legislation.

You are part-owner and therefore self-employed on unemployment benefit if;

  • you work in a leading position in a limited company in which you hold at least 15% of the share capital or of the voting rights attached to the shares, or otherwise have a similar power of control
  • you work in a leading position in a limited company in which you and your family members hold at least 30% of the share capital or of the voting rights attached to the shares, or otherwise have a similar power of control
  • you work in a public limited liability company in which you hold at least half of the share capital or the voting rights attached to the shares or otherwise have a similar power of control
  • you work in a public limited liability company in which you and your family members together hold at least half of the share capital or the voting rights attached to the shares or otherwise have a similar power of control
  • you work in any other undertaking or association in which you or you and members of your family exercise a dominant influence equivalent to that referred to in paragraphs 1 to 2

So the key thing is that you work in a company where you have a say. Mere ownership does not make you an entrepreneur.

Ownership cannot be chained in a hidden way. When we assess ownership, we also take into account indirect ownership. We take indirect ownership into account if you own or jointly own with your family members at least half of the intermediate entity or have an equivalent level of control over the intermediate entity.

What to consider when starting a business?

When you start a full-time business, we recommend that you join the Entrepreneurs’ Fund as soon as possible after starting your business. This will ensure the continuity of your income-based unemployment benefit.

If you are unemployed or laid off, you should always discuss starting a business with the employment services before you start.

If the employment services consider that you are employed in a business as your main activity, we will not be able to pay you income-related daily allowance. If your employment is a secondary activity, we can pay you an adjusted income-related daily allowance. In this case, we will take into account your income from your business activity when calculating the amount of income-related daily allowance you will receive. This means that your income will reduce your earnings-related daily allowance to some extent.

If you start a business when you are unemployed, your employment in it will not prevent you from receiving the daily allowance for four months from the start of your employment. After four months, the employment service will assess the extent to which the activity employs you, as described above.

Entrepreneurship and membership of an unemployment fund

We are an unemployment fund for employees. This means that only as an employee can you join and insure your work with us. As an entrepreneur, you cannot join us.

As an entrepreneur, you can join the Entrepreneurs’ Fund. There is one unemployment fund for entrepreneurs in Finland.

If you work both as an employee and as an entrepreneur, you can choose to insure your work as an employee with us or your work as an entrepreneur with the Entrepreneurs’ Fund. You cannot be a member of two different unemployment funds at the same time.

If you have joined us as an employee, you can keep your membership when you become self-employed. If you are a light entrepreneur or your employment in a business is a sideline, you can still be a member regardless of your business activity. However, working as an entrepreneur does not earn you a work qualification. If you are employed full-time in your business, you can be a member for 18 months.

From employee to entrepreneur

If you are starting a full-time business, we recommend that you join the Entrepreneurship Fund immediately. You can only accumulate the entrepreneurial working condition as a member of the Entrepreneurs’ Fund.

If you do not join the Entrepreneurs’ Fund, you can keep your membership with us for up to 18 months. After that, we will terminate your membership. This is because, after 18 months of working as an entrepreneur, we can no longer legally grant you an earnings-related daily allowance based on an employee’s working condition.

When you transfer from us to an entrepreneurial fund, your unemployment security is covered by post-employment protection. Once you have transferred to an entrepreneurial fund and if you become unemployed before the entrepreneur’s condition regarding employment is met, you are entitled to the earnings-related daily allowance that you would receive on the basis of previous paid employment before entrepreneurship. To take advantage of the after-protection, you must have joined an entrepreneur fund within one month of resigning from us at the latest.

From entrepreneur to employee

When you switch from an entrepreneur’s fund to an employee’s fund, you have the same after-work protection as before. In this situation, this means that if you become unemployed before you have fulfilled the condition of being an employee, you are entitled to the daily allowance that you would receive if you were still a member of the self-employed person’s fund.

To be eligible for this protection, you must have joined us within one month of leaving the self-employed person’s fund. So remember to join on your first day of employment and do not terminate your membership of the Entrepreneurs’ Fund before then.