Entrepreneur, insure yourself for unemployment

There are two types of unemployment funds, for employees and for entrepreneurs. KOKO the fund for employees whereas entrepreneurs can be insured in, for example AYT, The Unemployment Fund for the Entrepreneurs and the Self-Employed.

If you’re an employee and have entrepreneurial activities on the side, the KOKO fund is a good option for you.

As a full-time entrepreneur, you can remain in the KOKO fund for a maximum period of 18 months after starting your own business.

When starting a business, a full-time entrepreneur should however think about joining an entrepreneurs’ unemployment fund to secure uninterrupted income also during possible unemployment.

If you stay in the KOKO fund

  • You can remain member for a maximum period of 18 months after starting your own business.
  • If your business ends within the first 18 months and you are left unemployed, you are entitled to an earnings-based allowance from the KOKO fund on the basis of your previous employment income. This is called the right to post-protection.
  • After the initial 18 months, you are no longer entitled to an earnings-based unemployment protection.
  • If you join the entrepreneurs’ unemployment fund
  • Membership transfer from the KOKO fund to the entrepreneurs’ fund must be done without interruption.
  • If you join the entrepreneurs’ fund within three months from the start of your own business, there will be no interruption in your earnings-based unemployment protection.
  • The entrepreneur’s unemployment allowance can be paid during the period of unemployment when you have been an entrepreneur and member of the fund for 15 months.
  • You are entitled to the 18-month period of post-protection also as a member of the entrepreneurs’ fund.
  • More information on how to become a member in an entrepreneurs’ fund can be found, for example, at www.ayt.fi.
  • If you start your own business while being unemployed, your entrepreneurial activity is often considered as full-time activity thus the earnings-based unemployment allowance cannot be paid anymore.
  • When you start your own business, please contact the unemployment protection counselling for further information.

How to define an entrepreneur in unemployment protection?

For the purposes of unemployment protection, an entrepreneur is defined as a person who works without being in an employment relationship. The definition of an entrepreneur in this context is not always similar to that in taxation or in labour law. Just owning an enterprise or being a family member of an entrepreneur does not make you an entrepreneur – you also have to work in that enterprise.

Entrepreneurs are:

  • private entrepreneurs (self-employed persons or private traders)
  • agricultural entrepreneurs
  • partners in a general partnership
  • general partners in a limited partnership
  • co-owners of an enterprise or family members of an entrepreneur
    • who work in a leadership position (CEO, member of the board) in a company with a personal holding share of at least 15% or, together with family members, a holding share of at least 30%
    • who work in the company in a non-leadership position and hold together with family members or the family holds at least 50% of the company
  • persons who do not have an employment relationship but work as contractors, freelancers and as members of invoicing cooperatives