I became self-employed as a freelance translator in 2019, and prior to this, I had been translating on the side for 7 years. The encounter with the unprecedented pandemic of COVID-19 a year after I turned to full-time was unexpected and challenging, but thanks to the basis I had built with clients and partner agencies by then, the last two years weren’t that bad for me.
In the meantime, I have been wondering whether I should incorporate my business. In consideration of a nature of the job, however, you can complete a translation task alone. You may provide more extended services such as TEP (translation, editing and proofreading as a set), collaborating with peers through outsourcing so long as your clients agree, but that’s not a reason enough to become incorporated.
I operate a translation-agency-like business with my reliable, competent fellow translators as a team and provide translation/localization, editing, proofreading, TEP, transcreation, copywriting, interpreting, or (cultural) consultation according to clients’ needs. In this month, I had a chance to discuss with a prospective client for interesting translation projects in finance which is one of my fields of expertise, but it was put on hold as I am not incorporated. I quoted for a TEP service, but they didn’t want to accept the price. They differentiate rates for sole proprietors and the ones for incorporated entities, even if a service to be provided is the same regardless a form of business. We reached the conclusion that we’d re-open the discussion for collaboration if and when I become incorporated.
Until this happened, I had been satisfied with how my business were going but now I see myself being ambitious. Obviously, however, there are pros and cons of the incorporation:
Pros:
– You can appropriate more extended variety of expenses to be included in your accounting records.
– You will gain more flexibility and options to save tax.
– You will gain wider access to clients who aren’t willing to do businesses with freelancers.
– You will gain more credibility in terms of concluding contracts or financing.
etc.
Cons:
– Your income will be fixed.
– The amount of fee and withdrawal of your social benefits will increase technically.
– Corporate tax is inevitable even if your business goes into the red.
– You will have more paperwork.
etc.
Honestly, the insurance fee will most likely increase by 10 times or more (It’s my unique case) if I change the form of business. That’s the only issue that makes me hesitate. In spite of that, however, I think it is worth becoming incorporated to gain wider access to interesting projects in my fields of expertise (and interest). It’s just a matter of attributes of clients with whom you are going to do business.
Everyone has different objectives and circumstances. Do you choose to stay unincorporated or become incorporated?
