How is business account different from light business?

New options have opened for doing business in recent years. Instead of founding a business association or register oneself as a self-employed person, which are two most popular forms of entrepreneurship, it is has been possible for some time already to use a business account provided by LHV and light entrepreneurship, which is a new kind of solution. Light entrepreneurship enables working short-term while using a mediator between the contracting entity and the one who executes the work to guarantee that things are handled properly.

It is possible to open a business account in LHV bank and it is bureaucracy-free and affordable option for a private person to do business without worrying about accounting reports, monthly tax declarations and paying taxes – all this is conducted via the entries in the business account automatically. Arveteenus.ee enables to practice light entrepreneurship like using an investment account, which arranges all issues connected with accountancy. In addition, Arveteenus.ee lessens the light entrepreneur’s workload on the contracting entity’s side.

LHV has pointed out that the business account suits best if a private person pays for goods and services to another private person. It has to be pointed out that the owner of the business account can provide services and sell goods to private persons and business associations, but for providing services to a business association via the business account, the business association has to keep in mind that an additional income tax obligation with the rate of 20/80 may occur, which makes the transaction cost of the business association equal with the tax load of the common employment relationship. In case of light entrepreneurship it is not important whether the recipient of the service or the purchaser of goods is a private person or an entrepreneur receives a similar invoice to be paid for. It makes the sale of goods and providing services easy for legal persons, who can use an invoice, which is an accounting document, comfortably in accounting. The owner of the business account can not issue invoices. In this case the contracting entity’s purchase invoice is the abstract of the balance or the cash outflow order.

One should also pay attention to the fact that if you found a business account in LHV or open a business account, it equals with the beginning of employment. Within light entrepreneurship it is possible to execute work bites or short-term work for 8 days a month for a total sum or single work bites up to 40% of the monthly minimum rate, which has reached 654 EUR in 2022.

The owner of the business account has a right to health insurance in case every month at least 1606 EUR of income is accrued on the account, of which the minimum rate of the social tax in the sum of 192,72 EUR is paid. Via Arveteenus.ee a light entrepreneur has to work or submit invoices within the sum of 856,40 EUR and similarly to the business account, health insurance occurs a day after the TSD is declared or after the tenth day of the month.

Briefly, the business account of LHV is a good solution for those people, who provide services or sell products to private persons and to whom the occurrence of health insurance is not a priority. Arveteenus.ee offers more flexibility for working while being registered as unemployed and smoother management for the contracting entity, who is a legal person. More information about the business account of LHV is available on the homepage of LHV lhv.ee and about light entrepreneurship on the homepage of Arveteenus.ee arveteenus.ee.

Photo: Vlada Karpovich

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I used the Arveteenus.ee payment service to test the speed and quality of the service. I was providing saddlery services as a private individual for a company that wanted to receive an invoice. The money moved very quickly, as the customer I provided the service to paid the invoice to Arveteenus.ee on the same day. The service is transparent with a clear overview of where and to whom the fees are paid. Ideal service for extra work or for main work where billing is clear. Our staff often want to work overtime and earn extra pay. Within Smartservice OÜ, we are considering using this solution to bill for piecework and overtime payments.
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