You want to go freelance but you're not sure about how to do it ? You want to get more accurate information before actually making the big step?This section might be helful for you.
WHAT IS CONSULTING?
Consulting is the provision of expertise, in terms of knowledge and know-how, to a third party in exchange for fee. The most common case is that of a company resorting for to the services of consulting firm in order to deliver solutions that can be recommendations, studies, resources, etc. (Clive ROWLAND)
There are various types of consulting activites, among them we can count :
Public relation & Communication Consulting
WHY GO FOR CONSULTING
There are several reasons that can lead an employee to becoming freelance consultant. Here under are 3 reasons that are constantly found in many articles.
Flexibility and autonomy: the consultant is his own boss, or nearly so. For what regards scheduling, the consultant generally benefits from a greater flexibility that allows him to set up in his agenda several projects, meetings or private activities. In addition to a better productivity and interventions when really needed, their flexible schedule allows for a better work-life balance. (Greaves, s.d.)
: Being a consultant offers more diversity in terms of projects, work teams, clients, sectors, technologies, wok environment, etc. The extensive experience acquired by the consultant allows him to propose an expert and interesting view on specific problems. Every new client or new project will lead to new issues to address, new challenges to take on.
: The job of consultant is one of the most well paid, bonuses excluded. Indeed, many of them provide specific competences that are often hard to come by. The rarity of some profiles in areas such as finance, IT, management, organization, change… makes them more expensive.
HOW TO BE WILD AND FREE
An independent in Belgium is a person who practices a professional activity that is not bound by a contract or a status. The opposite situation is that of an employee or a civil servant. Notorious examples are traders, accountants, lawyers, doctors, entrepreneurs, etc. (INASTI, 2015)
Becoming a freelancer (or an independent) in Belgium requires that we abide by several conditions such as (BECI, s.d.):
Being 18 years old
Being Belgian or coming from a country within the European Economic Area or having a working permit.
Not being legally considered as incompetent or under the authority of an “administrator”
Capacity to prove that you can manage a business (through a certificate of basic management knowledge or a college/university degree)
Not having two incompatible jobs (such as being a lawyer or a politician and a trader at the same time).
THE MUST HAVES
There are various compulsory steps to follow before becoming an independent worker. These steps will allow the freelancer to practice his job while being insured and protected at a social level (INASTI, 2015) / (GroupS, s.d.)
Registration to the Crossroads Bank of Enterprises: One of the first steps in creating a company is the registration to the “Banque-Carrefour des Entreprises”. Through this organization, an independent receives a unique registration number and can introduce necessary information that will allow to identify his business. Such information includes the business name, the company’s main location, the main activity, the sector, etc. It allows other interested organization to search and find information’s on a company’s identity.
Opening of a bank account: at the moment of registration to the CBE, every independent worker must have created a bank account through which transaction will take place. The account must be different from the private account. Only professional transactions will be allowed through it.
Demand of a VAT number: After registration to the CBE, most independents will have to make an official demand for a VAT number and will have to register themselves as liable for VAT.
Affiliate to a social insurance fund (caisse d’assurance social): Through that fund, the consultant will contribute to the functioning of the social security. In return, he will benefit from a social security from the government. It is compulsory that the independent affiliates at the latest the day his activity starts. In other circumstances we would risk a fine of 500€ to 2000€.
Pay social contribution: the worker is bound to contribute to social security. A percentage of the their yearly net revenue will be calculated and removed by the social insurance agency to be used as a contribution to the social insurance fund.
Affiliate to a mutuality: the freelancer should be registered at the same time as he affiliates to a social security fund. The mutability will insure the worker on a medical level.
STAND IN YOUR RIGHT
Though you could think that being an independent consultant strips you from many common rights, it is important to bear in mind that in Belgium being independent allows you to benefit from almost as many rights as the employees or the civil servants. Among them you have the right to (INASTI, 2015):
Family benefits: Independent workers have the right to family benefits that include allowances for every child that are part of the household. Among them we have family allowances, birth allowances, adoption allowances…
Invalidity insurance: when registered to a mutuality, the independent is entitled to allowances to partially cover the revenue loss from infirmity.
Maternity benefits: Independent mothers have, as for the employees, the right to take maternity leaves before and after giving birth. They are obliged to take at least 1 week off before birth and 2 weeks after birth. An extra 9 week full-time or 18 week part-time break is allowed. Mutuality partly cover maternity needs with an allowances of +/- 450€ per week (and 225€ if part-time work). (Mutualité Chrétienne, s.d.)
Pension: Even though pension benefits for independent are lower than employee’s, they do have the right to a pension allowance as long as they’re 65 years old or able to prove a professional career of 45 years. Pensions of independent are calculated the same way as that of employees but because they contribute less to social security they earn less after retirement. On January 1, 2016, a single independent worker would earn a minimum of 8.537,09 € per year whereas an employee would benefit from a 10.395,60 € pension allowance. (Partena, s.d.). The independent is allowed to invest in a complementary pension fund (PLCI – Pension Complémentaire Libre pour Indépendant) through a premium of maximum 8,17% of his turnover, without exceeding the limit of 3.060,07 €.
I CHOOSE YOU
When it comes to becoming independent, the worker is put in front of important choices regarding his legal status. It is important that they choose the most appropriate status according to the project they are building.
The first step will be to choose between being registered as an independent person (sole proprietership – indépendant personne physique) or a company. As both formulas have their own advantages and disadvantages, it is important to know exactly what would be the most appropriate solution taking in consideration various parameters such as the type of activity, the number of firm members, the available capital, the financial resources, the business plan, the growth previsions, etc. (SPF Economies, s.d.).
Sole proprietorship: This is the easiest alternative if a worker becomes independent. You are the only man on board. You can practically manage your activities as you please. This status does not require a minimum starting capital. Setting up such business is easy and costs few money. (SPF Economies, s.d.)
It is important to bear in mind that taxes for independent workers are much higher than that of companies. Independent workers pay 60% compared to 33% for companies. Starting at a rate of 350-400€/day, it is more interesting to change status and create a firm.
Company: The second alternative consists in creating a company. There are various types of firms. Here under are the main ones in our area of activity:
Private limited company (Société Privée à Responsabilité Limitée): For small and medium size companies this is the most used and most appropriate type of firm. This type of firm is called limited because the responsibility of the owner is only limited to the capital provided by the owner(s). The initial capital needed to build such firm is of minimum 18.550€. At afarax +/- 70% of the consultants opt for an PLC.
Limited partnerships (Société en commandite simple): This type of company structured by a distinction between general and limited partnerships (or sleeping and active partnerships). Limited partners are the fund providers. They bring the money but cannot intervene in the management of the company. This is the role of the general partners. They also have an unlimited responsibility for every deed of the company. There are no minimum capital provision required. At afarax +/- 30% of the consultants set up a limited partnerships. The aim is to create a legal structure that does not require capital provision and gather a sufficient amount of cash to set up a PLC.
You will be asked several times if a consultant can work with us as an independent while being registered at SMART. Well, the answer is yes.
SMART is a cooperative company created in 1998 to provide administrative services to artists who worked as freelance and had a hard time dealing with their accounting and other formalities. Today, the company manages contracts and takes in charge salary provisions for every artistic, technical and intellectual professions like journalists, translators or IT professionals. Their services do not only extend to administrative tasks and remuneration but they also offer other services such as legal help, lendings or even crowdfunding possibilities. (Vangulick, 2015)