Registering a Company in Finland

Finland is one of the most hospitable countries in the world, and it has pleasant economic and climatic conditions. These and other factors may motivate you to register a company in Finland. The only challenge lies in preparing for this process.

The process of setting up a business in this region is not significantly different from that in other countries. However, local laws regulate the launch of startups or businesses.

Lawrange experts have prepared a detailed guide for you to understand the nuances of working in this segment. Study it to thoroughly and timely prepare to establish a company in Finland.

Advantages of Doing Business in Finland

Even the simple prospect of living in such a picturesque corner of the Earth and having access to all the benefits of civilization is already an incentive to open a company in Finland. Add to this the political and economic stability of the region, rich natural resources, and access to promising logistical hubs. Sounds promising, doesn’t it?

The country has a favorable tax policy, a range of incentive programs, and a robust legislative framework, eliminating issues with authorities and various regulators.

Additional advantages include factors such as:

• Government support for small and medium-sized businesses.
• Elimination of the requirement for a minimum share capital when registering a company.
• Business conditions for non-residents.

More details on this and other aspects are provided below.

Government Support for Small and Medium-Sized Businesses

Special training courses are offered for those planning to establish a company in Finland but lack sufficient experience. Such training, courses, and lectures are available to all entrepreneurs who want to gain new knowledge in the segment.

Thus, the government invests in potential pillars of the country’s economy, which new companies and enterprises can become. Special offers are also available for foreigners, such as learning multiple languages and the opportunity to obtain a residence permit in less than 2 months.

Elimination of the Requirement for a Minimum Share Capital When Registering a Company

Since 2019, there has been no provision in the country’s law regulating an organization’s initial capital amount. Thus, registering a company in Finland no longer requires an initial contribution of 2500 euros, and the founders now determine the size of the investment.

Accordingly, such a change in policy significantly expands the potential opportunities for entrepreneurs. For example, launching a startup or small business is no longer a problem.

However, you will not be able to start operations without contributing the share capital. Its amount, though conditional, will depend more on the type of company, its services, and the nature of its activities.

Business Conditions for Non-Residents

It is possible to conduct business in the region without citizenship or a residence permit. The country offers very favorable and equal conditions for all entrepreneurs, encouraging them to invest in the state. Even if you want to stay in the country and buy a house, you can do so without any major issues.

Registering a company in Finland also allows you to obtain a residence permit through an accelerated process. There is a procedure for a legal entity that automatically grants resident status after submitting the appropriate application and meeting a number of requirements. However, having a residence permit is not mandatory.

Attractive Tax Policy

Last but not least, the most pleasant aspect. The tax system in the country is very favorable to entrepreneurial activities, even by EU standards and those of other countries in the region. Minimal rates, the ability to reduce contributions, obtain quotas, and subsidies.

Even without resident status, your business will be subject to simple tariffs, allowing you to accumulate budget and increase revenues while remaining within the legal framework of the country.

Isn’t that an incentive to start a company in Finland? Especially since you can reduce contributions if the company falls into one of the categories for simplified taxation, but more on that later.

Acquisition of an Existing Business in Finland

If starting a company from scratch in Finland isn’t your preference, you can simply buy an established firm and operate through it. Fortunately, there are plenty of options to choose from.

Every year, ready-made businesses, often profitable ones, are put up for sale in the country. Reasons for sale can vary from the owner’s simple retirement to the entrepreneur’s desire to switch to a related or fundamentally different industry.

By the way, buying a business still doesn’t require residency status, and the purchase allows you to naturalize in the country—initially through a residence permit—and later, if you wish, obtain citizenship. Therefore, buying a ready-made business is far from a bad option for starting work in the country.

Organizational and Legal Forms of Doing Business in Finland

To set up a company in Finland, you first need to determine its type. The country has several forms of business. Here are some of them:

• Yksityinen elinkeinoharjoittaja/yksityinen toiminimi (T-mi) – sole proprietorship.
• Kommandiittiyhtio (Ky) – Limited partnership.
• Avoin yhtio (Ay) – General partnership.
• Osakeyhtio (Oy) – Limited Liability Company.
• Osuuskunta (Ok) – Cooperative.

Depending on the type and format of the enterprise, specific requirements may be imposed on the owner. Therefore, let’s take a closer look at each form.

Sole Proprietorship

The simplest format suitable for those who want to register a company in Finland and work as a sole proprietor. This type of business does not require a company charter, additional managing personnel, or capital.

To start, all you need is to submit an application to the regulator, choose a name, and fill out standard documents. Then, the person who has obtained permission and registered the sole proprietorship can start working, for example, providing services or selling self-made goods.

There are no restrictions imposed by the government, including for foreigners.

Limited Liability Company

Registering a company in Finland in this format separates the responsibility of the management personnel and the owners for their share in the business. Thus, virtually any activity can be carried out in the country, real estate can be acquired, and production can be launched.

By the way, this is one of the most popular company formats belonging to the small and medium-sized business segments. Each of the key stakeholders is responsible for fulfilling the organization’s duties only within their share. A very decent form of enterprise from which you can derive a good profit.

General Partnership

Establishing a company in Finland is especially profitable when there is someone you can rely on in difficult situations. For example, if your business is launched in a partnership format, you can share all the difficulties and troubles with a reliable partner, and later, also share the profit.

This form of business implies that each of the partners takes responsibility for both (sometimes more) shares of the company, covers the debts of the partner, and receives similar assistance in return. Not a particularly popular format of business, but very effective if there is teamwork and mutual support, trust.

Limited Partnership

Registering a company in Finland can be done in the form of a limited partnership. This type of company means that its management structure includes both general managers with obligations to cover personal and common debts of the brand and shareholders with limited liability equivalent to their share of investment.

A relatively complex type of business to manage, relying on a large number of stakeholders. However, it is very promising, as it can accumulate funds and generate income even through relatively standard company activities.

Cooperative

It is possible to register a company in Finland as a cooperative. This type of enterprise means that all its key investors and shareholders have an undefined (often equal) share. There is no specified capital and personal contribution of each of the stakeholders in the team.

At the same time, all managers are interested in the company’s economic stability and development, so they make maximum efforts to scale the enterprise. Responsibility here is also collective, which improves the management quality of such an enterprise and influences the decisions made.

Company Registration Process in Finland

From this moment, you can relax a bit because you won’t have to put much effort into opening a company in Finland. You just need to follow eight basic steps:

• Choose a company name.
• Choose a form of business.
• Prepare the necessary documents.
• Obtain a residence permit.
• Obtain an identification number.
• Open a bank account in Finland.
• Register with the tax authority.
• Obtain a license in Finland for regulated activities.

Theoretically, you may encounter various problems. In this case, we recommend seeking advice or assistance from experts at Lawrange, depending on the situation. Meanwhile, study the information that will help you navigate the registration process more easily.

Choosing a Company Name

Registering a company in Finland means establishing the brand name in the country’s official registries. Note: come up with at least 2-3 names that you are potentially ready to use in official documentation, on the company’s website, in trademarks, and so on.

These names will be needed for submission to various institutions and competent government bodies. Without them, your registration application may be rejected or not even considered.

There are no specific rules or requirements for names per se. However, we strongly recommend consulting with Lawrange lawyers on this matter to avoid potentially unpleasant situations.

Choosing a Form of Business

Creating a company in Finland means being informed about the risks and benefits of each organizational format. Therefore, you need to weigh all the pros and cons before choosing one of the following business forms:

• Yksityinen elinkeinoharjoittaja/yksityinen toiminimi (T-mi) – sole proprietorship.
• Kommandiittiyhtio (Ky) – Limited partnership.
• Avoin yhtio (Ay) – General partnership.
• Osakeyhtio (Oy) – Limited Liability Company.
• Osuuskunta (Ok) – Cooperative.

If you are still unsure which type of company will help you achieve your goals, experts from the Lawrange Attorneys Association will help you make the right choice.

Preparing the Necessary Documents

Like any other civilized country, Finland’s bureaucracy is relatively good. Therefore, registering a company in Finland requires only a few documents from the entrepreneur:

• Identification (passport) of all founders.
• Residence permit allowing business activities in the country.
• Finnish identification code for each partner.
• Articles of association.
• Company statute.
• Completed form for organization launch on the Business Information System portal.

Note that the above list is quite relative, as during registration, the entrepreneur may encounter additional questions or suggestions. Therefore, we strongly recommend seeking the assistance of Lawrange experts in preparing for the company launch process.

Obtaining a Residence Permit

If you are a citizen of a country with which Finland has a visa-free regime, you just need to apply for a residence permit at the migration department. Entrepreneurs also need to provide a package of documents confirming their readiness to start a business.

For all other categories, you will need to pre-obtain a type D visa before proceeding with the process described in the first section of this block.

In any case, Finland is very loyal to foreign investors, so there should be no problems. Of course, if you pass all the procedures and checks of competent authorities.

Obtaining an Identification Number

Without a personal identification number (PIN), you cannot use banking services or engage in entrepreneurial activities. For this reason, it is advisable to visit the Digital and Population Data Agency as soon as possible, fill out the standard application form, wait for processing, and obtain your PIN.

As with the previous point, this process should not cause any problems. If any arise, seek advice and assistance from the local Lawrange branch operating in Finland.

Opening a Bank Account in Finland

Let’s start with the fact that to open an account, you must be a resident (even with a residence permit), have a personal identification number (PIN), a physical (real) address of residence in Finland (or in another country, but there are nuances), and have taxpayer status.

If all the specified conditions are met, you can approach a bank that offers the best conditions for conducting business and apply to open an account.

Please note that you can register either in person at a branch or through online banking. In some cases, you may need to undergo financial monitoring and compliance checks for AML/KYC policies.

Registration with the Tax Authority

It is not mandatory to have taxpayer status if you are willing to pay the relevant authority about 60% of your income. If not, then you should contact the tax office with your PIN, fill out a form, and provide several documents indicating the potential profit for the next year.

After meeting all the requirements and completing the registration, you will receive an individual tax card, which will determine your rate. If you plan to establish a company in Finland, you will need to additionally clarify this point and obtain a corporate rate.

Obtaining a License in Finland for Regulated Activities

The final step in opening a company in Finland is obtaining a license. In fact, this is the simplest stage, where you need to submit an application in the established format, attach the above-mentioned document package, and wait for the regulator’s decision.

Most likely, you will receive the license without any problems. If not, you can contact representatives of Lawrange in the region to receive qualified assistance or even support if necessary.

Tax System in Finland

Creating a company in Finland implies that you know the favorable and advantageous tax system. Here are some of its key points:

• Corporate tax – 20%.
• Value Added Tax (VAT) – 24%, reduced rates 0%-14%.
• Dividend tax – 0%, 20% for foreign companies without a local office and non-residents.
• Royalties – 20% if there is no double taxation avoidance agreement.

Additionally, various fees apply to real estate transactions, transportation, and a progressive income tax.

Financial Reporting and Audit

Registering a company in Finland means that you are ready to conduct an annual audit and provide financial reporting to various regulators. Both local residents and foreigners are subject to the same rules and formats for submitting reports, and administrative penalties are imposed for evasion of audit and tax payments.

Want to learn more? Ask a Lawrange manager.

Types of Activities in Finland

Reduced tax rates apply to categories such as:

• 14%:
  • Groceries.
  • Animal feed.
  • Food service.
• 10%:
  • Books;
  • Newspapers and periodicals.
  • Pharmaceutical products.
  • Tickets for cultural and entertainment events.
  • Passenger transport.
  • Royalties for television and public radio broadcasting.
  • and more.
• 0%:
  • Sale, leasing, and chartering of VAT-exempt vessels + work performed on such vessels.
  • Tax-free sales of magazines and advertising to non-profit corporations.
  • Export outside the EU.
  • Other tax-free sales of goods and services related to international trade.

Tax rates are periodically revised, so stay updated on the official website of the Finnish Tax Administration.

How to Obtain Residence Permit through Start-Up

If you are ready to register a company in Finland as a startup, you can also apply for a residence permit. However, before that, you will need to undergo the Business Finland verification process.

The conclusion and the code are valid for two months. As a startup owner, you can use the code to apply for a residence permit.

Registration Timelines for Companies in Finland

This is a highly subjective indicator that depends on the type and size of the company being established and the number of documents submitted in paper form. The entire process can take 1-2 months to six months.

If you want to expedite the procedure and minimize business downtime, you should seek assistance from legal professionals in the jurisdiction.

Why Choose Lawrange

With over 10 years of experience in the market, hundreds of successful projects, and just as many satisfied clients, the Lawrange team has representations in all civilized countries worldwide, including Finland.

We will not only advise you on any questions but also provide comprehensive support in all processes related to opening a company and more.

Ready to start collaborating? Contact a Lawrange manager to discuss your project!

Conclusions

At first glance, establishing a company in Finland may seem straightforward. However, this process has its pitfalls, related both to bureaucracy and sometimes complex candidate screenings.

You could spend your time and resources figuring out the nuances and independently navigating the entire path of registering a business. But are you willing to lose potential income due to delays?

Simply entrust the process to Lawrange experts and focus on relevant business processes while we handle the routine!

FAQ

What are the main requirements for company founders when registering in Finland?

Having a PIN, TIN, residence permit, a certain amount of management personnel (depending on the business format), articles of association, a business plan, a bank account, and a registered address.

What innovations or entrepreneurship support programs exist in Finland and may be available to new companies?

The main loyalty program focuses on training and development for owners of small and medium-sized businesses. Additionally, there are platforms for subsidizing startups, socially beneficial projects, and IT.

What restrictions or peculiarities may exist for the registration of a company in Finland for foreign citizens or non-residents?

In fact, none. All you need to do is apply for a Residence Permit. The status exempts from negative nuances when conducting business in Finland.

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