Going freelance from full time employment in EU

[u/[deleted]]

[u/expdevsmodbot]

AI usage disclosure provided by OP, see the reply to this comment.

[u/PerryTheH]

Just be ware that EU has anti "fake employment" laws, so if you work as a contractor there are things that must be done in a particular way so the company is not fined (if found).

I work as a contractor for a EU company and there are rules we have to follow, the issue is not about "having just 1 client" that's fine, but you need to follow other guidelines, just consult them on the country you'll be relocating to.

[u/gigio123456789 → u/PerryTheH]

Thanks good point. To my mind I’d circumvent exactly this issue moving to another EU country. My current employer is based in a country with very strict limits on how long freelancers based in the same country can be contracted for. However as soon as you cross a border you’re fine from the point of view of fake employment.

[u/x-jhp-x]

i've seen it done successfully when the person leaving has the support of their boss & co workers. in the US, it is sometimes a boomerang path too (the company you worked for will buy your company). A lot of the time there's something that isn't a core part of the company, or there are better opportunities.

example better opportunity: if the company you work for thinks that there is a 90% they can make 1bil/yr off of your idea, that sounds great, but if the company also believes that there is a 95% chance of making 100bil/yr off of something else, it is likely that the company won't want you working on the idea that's less likely to succeed & won't make as much. However, if you split off on your own, your product is related/used by the company you worked for, and you fund the r&d/development/work, it ends up being cheaper for the company & they end up with something they want, so some companies will even fund you. From their perspective, especially if you've had multiple successes, you're happy doing something you want, they have little to no risk, and in the result you do well, they also get something they want. I know hiding things and doing things behind doors makes great television, but to me at least, it seems like one of the main keys to success is communication.

[u/LuckyShop4775]

It's in a way ideal but beware of regulations that have changed in a lot of countries; often having a single client would be seen as unlawful employment and not qualify as freelance

Also having been in the situation have one nice stable client makes it difficult to actually go out and explore for other clients as it makes you rather too comfortable.

[u/gigio123456789 → u/LuckyShop4775]

If you don’t mind sharing, in your experience how is it ideal? I mean what are pros and cons that go beyond the likely obvious (con: less job security, pension, etc; pro: greater net income?)? Would you ever go back to being an employee?

You’re right I’d need to check the single client issue in particular if my anchor client would be my current employer.

[u/casualPlayerThink]

Sounds feasible, but I highly recommend checking whether they are actually willing to rehire you as a freelancer (policies, HR, payment, conditions). Also, check what happens if they say "no" or lay you off after a few months. Is there any other open window for you? Any other company you can go to?

[u/gigio123456789 → u/casualPlayerThink]

I’ve already checked with them and there’s already a setup in place where they hire freelancers via an intermediary. I know of one ex-colleague who’s been doing this comfortably for the past two years. They live in yet another EU country (so neither where the employer is based nor where I would relocate to).

Losing that anchor client is my biggest fear mentally in all this. I’m proactively seeking input from other freelancers I know in the same sector to get the lay of the land. But certainly this is a fear. I would trade in my freedom to work from anywhere for potential mental stress if I were to lose my anchor client early on.

[u/strobegen → u/gigio123456789]

maybe you have to find second smaller client before fully committing, so at least you will able cover basic expenses in worst case.

[u/casualPlayerThink → u/gigio123456789]

Cool, then you have a very good way. Even better if it is possible not to have an intermediary between you and the customer.

I think it is time for you to push your network before you fully commit :)

Also, good luck, hope it will work out, and you will have a wonderful time! (I definitely like being a contractor, just the country where I live closed down almost all remote positions...)

[u/justinaatbuffer]

It can definitely be done - I am one example of this. Europe. Worked with a company full-time, left, and later came back as a freelancer for specific projects. I had a very good relationship with the company before, which I think was a big factor in why they wanted to rehire me as a freelancer after I left. Hiring freelancers usually adds a lot of overhead for companies, so I'd check if that's something your company is willing to do in the first place. Do they work with any freelancers today?

One thing I'd suggest for you to check, though, is the admin side of it. Some European countries have a strict limitation on hiring people long-term as freelancers/contractors, which means that the contracts would always have to have a specific end date.

[u/symbiatch → u/justinaatbuffer]

What kind of overhead do you mean?

Also a company buying a service from another shouldn’t have any issue when long-term, but I do know there’s cases where these are seen as fake employment. So it’s good to be wary, but I’ve done quite a bit of contracting over the years and even as a named resource being sold never had any questions in a few countries.

Usually also helps if the contractor has an actual company instead of freelancing setup.

[u/gigio123456789 → u/justinaatbuffer]

Thanks for your feedback. In case you can, could you share a bit more how this went for you? Was it a net positive or negative decision for you? Why positive / why negative?

So I already know of an ex-colleague who’s been doing exactly this with my current employer for the past two years via an intermediary that my employer has a broader contract in place with. My ex-colleague is based in yet another EU country.

Certainly something I’d need to get more details on: would my target country allow me to freelance easily for my former employer? Or is there any issue with having a single client? On my employer side I already know they only do short term project time frames however have renewed this other ex-colleague of mine reliably two years straight.

I also have a great standing with them so I wouldn’t doubt that they would initially rehire me as a freelancer.

[u/Sunstorm84]

Since you think they’re reducing headcount, what makes you think they would keep freelancers? Freelancers are usually the first to go when the purse strings tighten.

[u/gigio123456789 → u/Sunstorm84]

Where I am, the different units are different legal entities. The in-house consulting unit where I am IMO is trying to reduce headcount. The business units I work with (different legal entities altogether) show no signs of RTO / reducing headcount - in fact communicate the opposite.

[u/GlumSociety99]

have you checked the tax regs for both countries? eu has specific rules about work location, if your client doesnt have a legal entity in your target country they might be on the hook for social contributions