Route to (private) self-employment

As advised in the summary, this post will be some of my thoughts on the way you can start being self-employed in a country that keeps public records of people.

The way (and why) to self-employment

Where I live, if you want to start self-employment, it’s quite easy. A small fee (around $50), one form, and you’re self-employed! Not too difficult, you can do it in an afternoon, get an identification number like any business and start cashing those cheques! Easy, right?

The issues start right after you get the number. You get put on a list. Many countries have these, at least in the EU, and these registries are, more often than not, public. This may not be a big problem, but I have seen our registry, and it contains the following:

• Name (with any titles, like MBA, PhD, etc.)
• Date of birth
• Identification number (EID for the US folks)
• Place of residence or office address

Now, I don’t really mind having neither my name nor my DoB in a registry somewhere, after all, that information may not lead you to my home or tell you where I am currently located. Also, the term “born again” only applies to bash, so I can’t change my date of birth. The full name thing may concern me more, but the only other option is to start an LLC, which is more costly (both time- and cash-wise), and it would only add a step between me and anyone trying to list my information. The reason for this is that an LLC must have a person listed as the owner. To redact this information, I would have to create a living trust and list that as the owner of the LLC, with a lawyer or other person listed as the primary contact. This is hella expensive compared to what I get out of it. Sure, one day, when I’m rolling in cash, I might throw some money at a lawyer and get a trust going, but until then, I don’t care if anyone knows the general area of my work.

Now, why would I want to do this? Until this day, for about 5 years, I have been swimming upstream against the employment market. IT and security companies have largely abandoned traditional employment and most jobs I get nowadays ask for an EID number in the first message. I don’t have one, never had one, but I believe that the way to get more opportunities is to put myself out there and get an EID of my own.

The residential issue

The main issue here is my place of residence. Even though none of my national records show my residence, this address is tied to a place I used to live at. I’d rather the current tenants of this flat not be harassed by people looking for me under the impression that I am there. The issue of my home being tied to my real name would be an issue. This information is also present somewhere, but not publicly (at least not a google search away).

The public record for self-employment is open to anyone, same as corporations. This makes it a prime resource for any stalker or a nosy ex. The state also requires you to announce any change of residence if you move. This is something that has to be kept up-to-date and this information is tied to the permanent residence on your ID, so not something you can just pop and change.

Luckily, the free market reigns and there is a service you can get for a few hundred bucks a year: A virtual residence. This service is tied to your real name, granted, but that is in a contract with that company. This company will rent you an office space on paper so you can start a business or declare this space as your self-employment in government documents. This service also offers mail pickup, scanning, a dedicated/shared mailbox at the address, and a specific number of letters per year they will accept. Now I do not intend to use the mail scanning service, that is a privacy nightmare of its own, but having a place where I can have mail sent to and use it as an office space? That’s great!

For the (smug) US folks

I must say, this is one area where you have it easier in terms of what is available: CMRA, P.O. boxes, nomad-friendly countries, and all of that with one passport! If I wanted this amount of choices, I’d have to move to Iceland or something.

To translate my situation into US terminology, I want to start a sole proprietorship. Unfortunately, my country has no doing business as name I could use without starting an LLC and getting hit with double taxes. Basically, my name is going to be on every contract. I want to use something like a CMRA (commercial mail receiving agency) and declare that as my place of business. Luckily, there are companies that allow this. So my address should not be in a public ledger.

Laziness saved me!

When I bought my own place, I had the chance to move my permanent residence to my flat. I thought about it, and came to the conclusion that I have no need to change it. My old place is a safe place, not likely to ask me to change my address, so I have my old address on my ID. No one cares, I use this place basically as a CMRA, since the people living there are friends.

If you personally don’t have this option, it would be advisable to look into a permanent residence service. There are many around, I found one guy selling his mum’s address for a few hundred, and since it’s in a block of flats, he’s not worried about investigators coming in. What are they gonna do with the address? Start knocking on dozens of doors and ask “Did you sell your address to this shady guy?” I doubt it. For me, this solution would be a bit too much, since it’s much more paperwork for arguably not enough reward. Sure, in the future, I may buy this (it’s $300 for life, if I recall correctly), just to test it. If it works out fine, I may just keep it in my consultancy bag.

How I intend to set this up

So far, I have three addresses: My permanent residence, the place I live, and the potential virtual office. By using this third address for all business contracts, I protect my other two addresses, but there are requirements:

• The virtual office should not be on the other side of the country (in case I need to be present there),
• It must keep my real address secret (usually part of the contract),
• The virtual office must allow me to use it as my sole proprietorship’s address.

The plan is to first buy the virtual office, after which I can start planning the sole proprietorship. One issue is that people working this way get no benefits from employment.

Employment where I am: Employee vs. Freelancer

To show what my issue was with this employment method (for anyone not familiar), let me explain how employment works in my country: You can either be an employee, or work freelance.

The benefits of employment are self-evident, and are usually a safe choice: Your employer pays you a salary every month, you work for a predetermined number of hours every month, and your expenses (social insurance, health insurance) is taken care of for you. This is the usual way of gaining employment in most sectors. It’s safe, can be done long-term, and unless you mess up spectacularly, you can stay at the same place for decades. Your employer even does your taxes for you, so you have nothing to worry about that, either.

The downsides, however, are several. Since your employer pays your insurance for you, their expenses are higher than if they hire a freelancer. This percentage is around 160% of your gross income. It is therefore obvious that an employer may hesitate hiring a specialist who requires a six-figure income, when it’s up to them to pay half of your salary to the state and insurance agencies. Furthermore, your income is taxed, so your net income is roughly 80 to 85 percent of your gross. I don’t know about you, but this math always messed me up in negotiations, because what you ask for is not what you’ll see on your paycheck.

The freelancer, on the other hand, has the payment method figured out. You do not get a salary, you send a monthly invoice to your employer and they pay it. There are no hidden fees, what you invoice is what you get. The employer has no expenses to consider when hiring you, it’s usually discussed in terms of payment per workday. You do the work, you do not need a full-time employer, so if the pay is good enough, you can work only a few days a week and have the rest free for what you want to do! Also, contrary to regular employment, you can work for many companies at once (the definition of freelance).

The downside is basically everything I listed as an upside for employment: Your employer doesn’t pay anything other than your daily wage, so it’s up to you to pay for your insurance, your taxes, everything comes out of your pocket. For taxes, freelancers must do their own taxes every year and deduct up to 60% of their income before taxing the remainder. This can be a huge lifesaver, since you’re hardly likely to spend 60% of your income on materials and tools you need to use for work (my T480 works just fine, and that cost around 200$). Furthermore, you can forget such niceties as paid days off, those are restricted by law. If you’re freelance, you either work or starve (Many companies I know bypass this law by actually letting their employees send invoices on their days off, but that’s penalized if the government finds you.) Lastly, everything is based on the contract. If you sign a paper saying the company can fire you on the spot and you get fired, don’t be surprised. By law, the usual notice period is 2 months for employees, 2 weeks for freelancers. However, an employer does not have to give you any work during the notice period, so it’s best to be wary of an employee promising you a 6-month notice period. They can fire you and then just stop giving you billable work.

Another issue is the insurance. You can either pay for private insurance and let the government know you’re insured, or you can pay a flat fee depending on what you made in the last 12 months. If you make more than $70,000, you have to pay around 600$ per month. Under that income, you pay around 300$. That is by no means bad (you can make that in two days easily), but still, it’s something you have to think about.

The Goldilocks solution: Why not both?

One heureka I had during my (short) research was that you can be both employed and freelance at the same time. Of course, this has some caveats. If you do penetration testing as an employee, you may have a clause in your employment contract stating you cannot do the same work freelance or for other companies. It would lead to a conflict of interest, with tech people pushing clients one way or the other, causing confusion and resulting in an employee actually being competition for their own employer…

I don’t have this clause.

This is amazing news, I can have my employer as the person who pays my health and social insurance, and do jobs on the side as “m4iler the awesome hacker.” If al my jobs apart from this one are freelance, I can leave the taxes and state responsibilities up to my employer, and then tax 40% of my annual income of the side projects. This sounds like the best of both worlds, since my main gripe is the monthly tariff I have to pay to the government to not land in jail.

Back to privacy - playing the numbers game

In any case, I want to prepare the first steps during this half of the year. The plan is simple: I will build a complete set of contact information I can present to the virtual office people. I will obviously need:

• An e-mail address (possibly my realname.TLD domain, that usually works fine)
• A phone number (I have so many VoIP numbers I don’t know what to do with them, this can be a great use)
• A signature (one that is unique to this specific place)

My reasoning is that this information will leak someday. Sure, it will have my permanent residence on it, but that’s not that hidden. I don’t live there. The phone number is useful, only this company will have it and I will note it down for myself as “the virtual office number.” If it ever leaks and I get a phone call from a scammer, I immediately know who the culprit is. It’s a sort of canary that will immediately give me a way to know they’re up to no good. The signature is basically the same plan as with the phone number: If a contract shows up with that signature, I know someone stole it from this company.

Future plans

In the future, I will probably enhance this technique (if it proves necessary or financially viable) by getting a virtual permanent residence and buying a virtual office address with that specific address. This way, there are two steps to get to me. A stalker would first have to compromise the company listed as my office address, and the contract would lead them to an address where I never was and never will be. If I wanted to go deeper, I could switch both these addresses at random.

Another way may be to do a double-change: Change my permanent residence, order the virtual office, and then change my permanent residence back again. This way, I keep a workable address for all government issues (one where I can receive mail for free) and the virtual office company has some different, mock address. This process would take a few months to pull off, with the ID changes, but it could be a pleasant way not to leave as big a paper trail.

In closing

The year 2025 will be interesting, to be sure. Wish me luck, I probably won’t publish my EID here, as it is directly tied to my real name, but expect a lot more shenanigans in the near future!