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  • Writer's pictureAthanasios Ventzios

Starting as a freelancer - Everything you need to know

Updated: May 8



Λογότυπο Ventzios Accounting

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A freelancing business is established and operated by one person, who is responsible for making all decisions, but is also solely responsible for all the obligations of the enterprise.


It is the most basic and simple form of business in Greece and is recommended for the start-up of an entrepreneur and especially for small businesses.


Below, we will see when to start as a freelancer, what are the advantages and disadvantages, the necessary documents to complete the process and our first steps as entrepreneurs.

 

When should I start and why should I choose the type of sole proprietorship?


The law tells us that before we make any business transactions, we must have started a business. A business transaction is defined as any act carried out for the purpose of making a profit.


So, as long as we have an idea, a plan or a project, and certainly before we can start earning revenue from it, we need to start a business.

At this stage we need to choose the legal form of our business, i.e. whether it will be a type of company or a sole proprietorship.


The basic characteristics of the sole proprietorship are:

  • Establishment: The establishment is relatively simple and can be done online through gov.gr.

  • Capital: There is no minimum capital for establishing a sole proprietorship.

  • Liability: The entrepreneur bears unlimited liability for the debts of the business with his/her personal property.

  • Taxation: The sole proprietorship is taxed on the basis of their profit, with a graduated tax.

  • Insurance: The entrepreneur is insured in the e-EFKA.

  • Accounting books: Single-entry books are kept, with significantly lower accounting costs than double-entry books.

 

The advantages of sole proprietorship are:


Flexibility and autonomy: Sole proprietorship provides great flexibility and autonomy in terms of business decisions, as it does not require the consent of other partners or the approval of a Board of Directors. Moreover, the process of any change and termination of a sole proprietorship is much simpler and easier than for legal entities.

Low operating costs : Since it is set up by one person it is primarily a small or medium sized business , where the start-up and maintenance costs are quite low. It should be noted that no capital contribution is even required at the time of establishment.

Lower taxes at the beginning: The sole proprietorship is exempt from business tax for the first 5 years of operation. It is taxed on the same scale as employees and up to about 40,000 profits has a lower tax burden than corporate tax.


The disadvantages of sole proprietorship are:


  • Unlimited liability : The entrepreneur has unlimited liability with his personal property. That is, possible debts of the business can also lead to the loss of personal property.

  • Αδυναμία συνεργασίας : As the name suggests, a sole proprietorship can be created and operated by one person and there is no possibility of having more partners or shareholders.

  • Limited growth potential : The truth is that the sole proprietorship has certain limits, since once we reach a certain level of profits or there is a need to introduce partners, we are forced to move to another form of business.

 

 

What documents do I need to start a sole proprietorship?


VAT and taxis net codes : Before we even get started, the two basic things required are to have a VAT number and taxis codes.

Proof of business address : The first document we need to start a sole proprietorship is:

  • Copy of E9 : If the registered office of the company is privately owned, then we will need the copy of the Property Status Declaration or simply the ATAK of the property, if the procedure is done through gov.gr.

  • Renting agreement : If our registered office is leased, we will need the electronic lease submitted by the landlord in taxis net.

  • Landlord's Statutory Declaration : If we use our rented home as our registered office, if our business allows it, we can use an affidavit from the landlord stating that he allows us to use his property as the registered office of our sole proprietorship.

Form D211 : If the start-up is carried out through the requests of the tax authorities, then we have to fill in and attach the special form D211 with the details of our business.

 

What is the procedure I need to follow to start as a freelancer?


Starting as a freelancer is now done electronically and without the need to be physically present at a tax office. It can be done either through gov.gr or by submitting an online request to the tax office. Let's look at them in detail:

 

1) Starting as a freelancer online via gov.gr.

Through the gov.gr platform, a person can digitally carry out the launch or delegate a third person, upon authorization, to carry out the launch procedure.

Only those who will be exercising a commercial capacity can start online. Therefore, liberal professions (e.g. accountant, lawyer, engineer, etc.) are automatically excluded from this electronic procedure and must apply online to the tax office.

The data requested are the taxis codes, the ATAK (Property Identification Number) in case the company's registered office is privately owned or alternatively the number of the lease contract and its year of issue for a leased office. Care should be taken to include the postal code in the lease agreement because it is necessary to proceed. Finally, some basic information such as the job that we will be doing (Activity Code Number) and the commercial title of the business are required.

 

Step 1: Connect

We enter our personal taxis codes by selecting the "own use" field and verifying our personal data or we complete the process through a representative (e.g. an accountant) by selecting the "on behalf of a third party" field.

Step 2: Choice of office

In case the registered office is privately owned, we fill in the ATAK and the data of the property are automatically extracted. If the registered office is leased, we fill in the year of submission of the Real Estate Lease Information Statement. Also in this case the data are automatically extracted. It also applies to the use of property from a concession.

Step 3: Municipal Community Selection

In both cases we have to select the area corresponding to the address of the headquarters and its settlement.

We select the correct municipality to continue the process. If there is no registered postal code, in the case of a leased property, the procedure cannot be completed with this method , while in the case of a privately owned seat we fill in the postal code, with the procedure automatically updating the E9 as well.

Step 4 : Pre-populated fields

At the next stage the user is transferred to a screen with pre-filled fields concerning basic identification data as well as his/her home address which were automatically retrieved by the system.

Step 5 : Entering business data

Along the way we declare the business details, Greek Accounting Standards data, VAT data and business activity.

To grant authorization to a third party, the user fills in the special field the VAT number of the third person to whom the power of attorney is granted. If the VAT number is found and the contact details have been entered in the EMS, then the VAT number and the full name of the third party are displayed on the screen and the user can proceed with the procedure by selecting the registered office of the company.

The authorised person has access to the processing of the application at any time while the authoriser is cut off, but can remove the authorisation at any time.

Step 6 : Connection with the Business Registry and data entry

A basic prerequisite is also the interconnection with the Business Registry in order to do the following:

A) checking the availability of the name and title and automatically reserve them

B) after submission of the start-up to the tax office, the sole proprietorship is registered in the Business Registry and a General Commercial Registry number is obtained.

C) an electronic file is created

D) registration of the sole proprietorship with the competent Chamber of Commerce

Upon completion of the commencement of operations, sole proprietorships are obliged to register in the Business Registry all acts and data provided for by law (Article 33 of Law 4919/2022), as well as any changes thereto.

 

2) Starting as a freelancer through an online request to the tax office

In this case, form D211 must be completed, in which we fill in the details of the business, such as the registered office (owned, leased or concession), the VAT code, VAT status, VAT data, intra-Community acquisitions - sales and the date of commencement.

Along with this form, the corresponding proof of the registered office of the business, i.e. the lease, E9 or, in the case of a concession, an affidavit from the landlord, must be sent to the tax office. If we want to engage in trade, we are not allowed to have our residence registered as our office.

Then through the platform "My Requests" of the Tax Administration, we create a new request to the respective tax office.

In the Business Registry we have to follow the same registration procedure electronically.


What should I do after the establishment is done?


Once the start of our individual activity has been completed, our first steps should be as follows:

  • Electronic registration EFKA : Our first step is to complete our online registration with EFKA to start our insurance.

  • Stamp : It is advisable to get a stamp with the details of your new business from the beginning, since it will be asked by institutions and services such as banks

  • Opening a business account : Although it is not always compulsory to open a current account, it is advisable to have a separate account for business transactions

  • Supply of Pos : If even one of the selected activities is on the lists of those liable for POS commission and we have transactions with individuals, then we must contact the bank or other POS provider.

  • Issue of documents : If we are on a list of professions required to supply a cash register, then we must obtain one or contact software companies to use an e-invoicing provider that can legally replace the traditional cash register.

 

 

What is the cost of a freelancer?


When starting a sole proprietorship, the cost of registration in the Business Registry including the first year's fee is approximately 40 €. The supply of POS and cash register is also an initial cost for the business.

The fixed costs of the sole proprietorship are :

- Business Registry 30 €/year

- Chamber of Commerce 11 €/year

- EFKA contribution every month (the amount of the contribution depends on the insurance category chosen by the entrepreneur).

- Accountant's fee



How can our accounting firm help in starting as a freelancer?


At our accounting firm with long experience in starting any type of business, we can guide and advise you in your first steps as a new entrepreneur, but we can also take over the process entirely.


We hold one-on-one meetings, via telephone, zoom calls or email, in order to answer all your questions and provide customized solutions for your needs.


See here which expenses you can justify in your sole proprietorship and what procedure you need to follow.


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