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Company Registration in Finland

Updated on Tuesday 19th July 2022

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The process of starting a business in Finland requires only a few straightforward steps. The laws are very encouraging to the investors who want to start a company in Finland (for example, in the north, where local authorities have special interests to attract foreign or domestic investments, some facilities are granted). The company formation process in Finland is governed by the Foundations Act nr. 734 from 1930 and The Finnish Companies Act from 1978 (the last one was reformed in its entirety in 2006, and it is now modern and understandable).

Quick Facts
Types of companies	- sole trader, - partnership (limited and general), - limited company (private and public), - cooperative association
Minimum share capital for LTD Company	No - capital requirement abolished since 1 July 2019
Minimum number of shareholders for Limited Company	1
Time frame for the incorporation (approx.)	minimum 4 weeks, maximum 6
Corporate tax rate	20%
Dividend tax rate	15%-30%
VAT rate	24% standard rate (reduced rates at 15%, 10% and 0%)
Number of double taxation treaties (approx.)	85
Do you supply a registered address?	Yes
Local director required	No - the director must be a resident of EEA, not of Finland
Annual meeting required	Yes
Redomiciliation permitted	Yes
Electronic signature	Yes
Is accounting/annual return required?	Yes, for both accounting and annual return procedures
Foreign-ownership allowed	Yes
Any tax exemptions available?	- tax deduction of 50% (instead of 25%) on the newly acquired machinery, applicable until 2025, - deduction of 50% on the research and development expenses, - tax free shares issued to company's employees for non-listed entities
Tax incentives	- tax free dividends for parent companies in the EU, - various tax exemptions, such as on the wealth tax, - VAT exemption for a wide category of goods and services

You can get in touch with our company formation experts in Finland for their consultation. They can help you start a company in Finland.

The most important types of companies in Finland

Please find below the different company structures that are available for starting a business in Finland as a foreigner:

- the Limited Company (osakeyhtiö-Oy) in Finland is established by at least one member with a minimum share capital of EUR2,500 (cash or assets) divided into shares that are not transferable to the public. The management is assured by at least one manager, while the general meeting of the shareholders takes the significant decisions.
- the Public Limited Company (julkinen osakeyhtiö-Oyj) is designed for large businesses. It is established with a minimum share capital of EUR80,000 (cash or property) by one statutory person. The management is assured by a management board composed of more than three members (more than 50% of them must be EEA residents) and a managing director if the capital is above EUR80,000. The shares of this type of entity can be listed at the Helsinki Stock Exchange.

Our specialists can help you register a company in Finland no matter the type of entity you choose.

Other forms of businesses for company registration in Finland

The smallest form of business in Finland is the Private Person Carrying on Trade (yksityinen elinkeinonharjoittaja) or a private trader. The owner is not considered a separate entity from his/her business, and he/she is liable with his/her assets for the company's debts. The owner must pay the specific business taxes, and he/she is free to withhold profit. We can help you open a company in Finland, no matter the type you choose.

A General Partnership (avoin yhtiö-Ay) in Finland is composed of at least two members called general partners. Incorporating this type of business does not require a minimum share capital, and the members are equally responsible for the debts and liabilities. The profits can be equally shared between the members.

At least two partners form the Limited Partnership (kommandiittiyhtiö,-Ky) in Finland; one of them must be the general partner with rights to decide in the name of the business and claim profits and the other is the silent partner who does not absorb the losses, has no decisional powers and cannot claim profits.

A Finnish Branch of a Foreign Company (sivuliike) is part of a foreign society that operates in Finland. It is not considered a separate entity, and the parent company provides the capital. The investors can also open a representative office incorporated chiefly to perform research activities on the Finnish market. Contact our specialists in company registration in Finland for more details.

Company formation procedure in Finland

At the beginning of company incorporation in Finland, the investors must deliver the following documents to the bank to open an account and receive a certificate proving that the minimum share capital was deposited:

- the foundation deeds;
- a description of the nature of the banking transactions;
- the company's field of business.

Once deposited, the amounts of money cannot be withdrawn until the company is registered. Setting up a business in Finland is simplified by sending a single start-up notification to the National Board of Patents and Registration. The application must be accompanied by the articles of association, the memorandum of association, a declaration confirming that the company has been incorporated following the provisions of the Finnish Companies Act, a certificate of the auditors confirming the shares respect the provisions of the Companies Act and other relevant documents mentioned by the law. The registration for the pension insurance can be made at a pension provider freely chosen by the entrepreneur, and it is the last step of the company incorporation in Finland. For more details about how to register a company in Finland you can contact our specialists.

How to start a business in Finland as a foreigner?

Private Entrepreneurship, Limited Liability Company, General Partnership, Limited Partnership, Public Limited Company, Corporation, and Cooperative Association are some of the business models available in Finland. So, if you want to start a business in Finland as a foreigner, you can get in touch with our company incorporation experts. They will provide you with comprehensive assistance regarding setting up a business in Finland. It is advisable for international entrepreneurs to form a corporation using either the private or LLC model. Here are some essential parts that foreigners must take care of when starting a company in Finland:

description of the company: First and foremost, as a foreigner, you must describe what your company will sell, to whom, and how. Then you must explain why clients require your products or services and how it differs from competitors;
competences: You must demonstrate your knowledge, skills, and previous professional experience;
services or products: You must specify the type of product or service your company will provide in Finland. It would help if you described how your items differ from your competitors;
you must determine who would be your potential customers in Finland, and how they will decide whether or not to utilize your products or services, and what qualities they value in your products;m
arketing: you need to explain how you intend to market your goods to ensure that you reach your target audience and persuade them of the benefits of your product;
SWOT: Create this study to demonstrate your company's Strengths, Weaknesses, Opportunities, and Threats;
operational strategy: To ensure that your firm is profitable, you must perform calculations.

These are some significant steps that you need to follow if you are starting a business in Finland as a foreigner. On interaction with our lawyers in Finland, they will further describe the strategies of starting a business in this country.

In addition to this, if you want to buy a virtual office in Finland, our experts can provide you with assistance in this matter. They will describe to you different packages so that you can select any package according to your business needs for registering a company in Finland.

Advantages of starting a business in Finland

These are some advantages if you are starting a business in Finland as a foreigner. For instance:

- It is simple to take a business initiative: Compared to many other countries, starting a business in Finland is more accessible and safer. It takes two to three weeks to open a bank account, register a corporation, and register with the tax administration. You can become an entrepreneur in a short period if you have a decent company idea. Moreover, our company incorporation experts in Finland can describe the business structure available in this country. This way, it would be easy for you to assimilate into the business market of this country;
- Optimal environment: Finland was considered the most digitally advanced country in Europe in 2019. That implies you can receive a lot of online services and conduct business online.

Our company formation consultants in Finland can guide you about the other benefits you can get as a foreigner. In addition to this, our company incorporation experts can provide you with detailed assistance if you want to open a branch in Finland. They will also describe to you the rules and regulations of company incorporation in Finland.

Can foreigners buy a business in Finland?

Foreigners can buy Finnish companies, business operations or become partners in a company that already exists in this country. A private undertaking, shares in a general or limited partnership, the entire stock of a limited liability corporation, or a majority of the shares may be the aim of acquisition. By paying the participation share, you can become a member of an existing cooperation. Public authorities must approve all corporate purchases in the defense and dual-use goods sectors, and this permission will be based on an application. Finnish firms are deemed crucial for securing vital activities within society, and corporate acquisitions will be subject to approval in the civil sector. You can interact with our company incorporation experts for consultation if you are starting a business in Finland as a foreigner.

Business licenses in Finland

In Finland, there are business activities that require a license. Serving alcohol, debt collecting, and security guard businesses are among them. Commercial activities are also required to be registered in a government-maintained database. Package vacation agencies, real estate agents, and house rental agencies are included in this registration requirement. An entrepreneur who submits this type of registration must meet the legal requirements for registration.

Other business activities require notification from the government before they begin. Commercial operations that require notification may also be subject to limits and duties under the law. An entrepreneur can begin operations before the authorities have reviewed the notice in most circumstances. So, if you are starting a business in Finland as a foreigner, you can acquire the assistance from our consultants. They will guide you whether your business require a license or not.

Economy overview in Finland

Company formation in Finland is preferred because this country offers an industrialized economic environment, highly competitive manufacturing, engineering, telecommunications, and electronics industries. Finland also excels in high-tech exports such as mobile phones.

The country is well-known as one of the world's leading wood producers and providers of raw materials for the wood-processing industries (2/3 of the Finland surface is covered with woods)

Also, the communication network is highly developed, especially in waterway transport (90% of foreign trade is carried by sea).

Foreign direct investment in Finland

As foreigners are setting up businesses in Finland, this practice brings foreign direct investments (FDI) in the country. Please find below the FDI of Finland for the year 2020:

- in Finland, the FDI inward flow was USD2,575 million;
- the FDI stock was USD96,903 million.

Contact our company incorporation experts if you are starting a business in Finland as a foreigner. Their comprehensive assistance can help you open a company in Finland.

Companyformationfinland.com is a part of Bridgewest.eu, an international network which has affiliated partners throughout the world, including this team of Finnish lawyers which can provide local legal assistance to foreign investors.

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