When you start landing international clients, one of the biggest decisions you will face is how to structure your freelance business. Should you operate as an individual using modern invoicing tools, or is it time to set up a formal company?
Here is a breakdown of what you need to know about freelancing as a registered company versus using a B2B invoicing service like GloPay.
Setting up a Small Local or Offshore Company
Many freelancers eventually consider incorporating a business to look more professional to enterprise clients. Depending on your citizenship and location, this might mean setting up a local entity, forming a Single-Member LLC as an American, or looking into offshore options.
Popular offshore routes include creating small companies in Hong Kong or Singapore specifically for invoicing clients, or utilizing the Estonian e-Residency program, which allows you to establish and manage a European company entirely online.
However, registering and running your own company—even an offshore one—comes with a heavy administrative burden.
The reality of running your own company:
- High Setup and Maintenance Costs: You can expect to pay anywhere from €100 to €500 per month just to cover accounting and banking fees.
- Heavy Compliance Requirements: You are legally responsible for all corporate compliance, which usually involves mandatory VAT registration, managing corporate tax filings, and submitting annual reports.
- Banking Hurdles: Establishing a formal business entity and opening a corporate bank account takes a significant amount of time before you can send your first invoice. Furthermore, it is very difficult nowadays to open a business banking account for a small offshore company, adding another massive layer of friction to getting your business operational.
Pros of having a company:
- You have complete legal ownership and control over your entity.
- Your invoices carry your own company’s name and branding.
- It is easier to scale if you plan to hire full-time employees in the future.
Cons of having a company:
- Expensive monthly accounting and maintenance fees.
- Strict, time-consuming compliance and tax filing requirements.
- Significant difficulties in securing business banking for offshore entities.
- Potential international tax complexities (for example, opening an Estonian e-Residency company can create complex tax liabilities for U.S. residents).
Freelancing as an Individual with a B2B Invoicing Service
For most individual freelancers, especially digital nomads and expats living outside their home country, it is much easier and more cost-effective to use a freelancer B2B invoicing service like GloPay.
Platforms like GloPay allow you to invoice your clients exactly like a company would, without actually needing to go through the work and challenges of setting up your own company. When you sign up, GloPay automatically forms an Estonian “contractual partnership” with you in the background. GloPay then acts as your legal umbrella, invoicing your business clients on behalf of this partnership.
Perfect for Digital Nomads: Because there is no physical company tying you down, this option provides ultimate flexibility. You can live and work from almost anywhere in the world and still pass strict corporate vendor checks, provided you are not a physical or tax resident of Estonia or living in a sanctioned country.
Self-Reporting Your Taxes: It is critical to understand that while GloPay handles the complex B2B compliance and VAT on the invoices, you remain solely responsible for your own personal income taxes. GloPay does not withhold or file income taxes for you; you simply declare your earnings to the local tax authority in your country of tax residency.
Pros of an invoicing service:
- Zero Setup Time & Hassle: You can start invoicing in minutes without dealing with local bureaucracy, establishing a legal entity, or struggling to open a business bank account.
- No Monthly Overhead: There are absolutely no upfront costs or monthly subscriptions; you only pay a flat 5% revenue share when an invoice is successfully paid.
- Cross-Border Friendly: GloPay supports invoicing and holding balances in multiple currencies (EUR, USD, GBP, SGD) without forcing costly currency exchanges, and enables low-fee payouts to external accounts like Revolut.
Cons of an invoicing service:
- B2B Only: You are strictly limited to Business-to-Business invoicing; you cannot invoice individual consumers (B2C) or sell physical products.
- You Must Self-Report Taxes: You still have to do the legwork to report your personal income tax in your home country.
The Verdict
If you are building an agency or selling physical goods, setting up a formal local or offshore company is necessary. However, if you are an independent professional providing remote digital services—especially if you are traveling the world as a digital nomad—a platform like GloPay gives you all the B2B invoicing power of a company with none of the bureaucratic or banking headaches.