A Finnish subsidiary is a company where the majority of the shares is own by a foreign company.
The decision of opening this type of business is especially due the special fiscal policy applied to it. For example, the subsidiary pays taxes on profits in the country of origin. The withholding taxes on dividends, interests or royalties applied on payment to a foreign company may be exempt or lowered by the provisions of a treaty of avoidance of the double taxation.
The procedure of registration of a subsidiary in Finland is very simple and doesn’t take longer than one week.
The subsidiary must have the name checked for its availability and then deposit the minimum share capital in a bank.
Next, the articles of association, the receipt from the bank confirming the capital, the list with the shareholders, the nature of the contribution and a statement regarding the value of the contribution in kind, details regarding their contribution must be deposited along with the decision of opening a subsidiary company in Finland at the National Board of Patents and Registration.
The last step for estalishing a subsidiary in Finland must be taken if there are any employees. The company must enroll for the accident insurance, pension insurance and medical insurance.
The subsidiaries may take the form of limited liability companies which’s actions and registration is governed by the Companies Act (Osakeyhtiölaki, 21.7.2006/624).
The Private Limited Company (osakeyhtiö-Oy) has a minimum share capital of 2,500 Euros (in cash or kind). It must have at least one founder and the daily decisions are provided by the management board.
A Public Limited Company (julkinen osakeyhtiö-Oyj) must have a share capital of minimum 80,000 Euros (in cash or kind). At least one founder is necessary to establish the company. If the share capital is above 80,000 Euro, the management board must have more than 3 members and at least a half of them must be EEA residents. A managing director must be elected to take the daily decisions in the company and conclude new contracts.
The shares of a private limited liability company cannot be freely transferable, unlike the stocks of the public limited liability company which can be listed on the Helsinki Stock Exchange.
In both types of Finnish companies, the shareholders have the liability limited by their contribution to the capital. Being a subsidiary, the majority of capital must be owned by the foreign company.