Open Company in Finland - Finnish Company Registration
Opening a Company in FinlandUpdated on Wednesday 24th May 2023
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Finland is one of the most appealing countries in Northern Europe in terms of doing business. With a focus on the services sector that relies on high and digital technology, opening a company in Finland is accessible to everyone in the world.
What does it imply to start a business and what are the steps to start a business here? Our lawyers in Finland have prepared a simplified guide below. You can rely on our support throughout the entire company registration process. We are also at your service for immigration to Finland.
Steps to open a company in Finland
Before explaining the types of legal entities available for registration, here are the main steps to open a Finnish company, so that you know what to expect from the beginning:
- the trading name reservation is the first procedure to complete, and it can be done in a few hours;
- drafting the Articles of Association for corporate entities is the next step in setting up a business in Finland;
- from this moment, the documents must be filed with the Trade Register within maximum 3 months;
- setting up the corporate bank account is another procedure to be completed;
- tax and VAT registration are the next steps in company registration;
- obtaining the necessary licenses to operate based on the sector of activity is the company.
The total registration timeframe can take between 4 and 5 weeks depending on the type of entity selected. Our Finnish lawyers can help you choose the appropriate business form.
Types of legal forms a company can take in Finland
Even if we did not present it in the business incorporation stages, choosing a legal vehicle for your future company in Finland is of key importance from several points of view. The Finnish Company Law enables local and foreign investors to choose from:
- the sole proprietorship which is the simplest way of having a small business in Finland;
- the partnership which is a non-corporate legal form and enables 2 or more partners to create a venture;
- the private limited liability company which is by far the preferred option of local and foreign investors;
- the public company which is the most complex legal entity and can be used for large projects;
- the subsidiary, branch and liaison offices are forms that can be employed by foreign companies seeking to enter the Finnish market.
If you decide to open a company in Finland, feel free to discuss all the aspects of the registration procedure with our specialists. Our law firm in Finland is at your disposal with various services, including assistance in company formation if you are not in the country. You can issue us a power of attorney for a quick incorporation.
The main requirements to consider when starting a company in Finland are:
- for a private limited liability company, at least one shareholder and 2 directors are required (one of the directors must be an EEA resident);
- the public company must have a minimum number of one shareholder and 3 directors, where 50% of them must be EEA residents;
- additionally, the public company is subject to a minimum share capital of 80,000 EUR.
In terms of registration procedure, it takes around 4 weeks to incorporate a private company and 5 weeks for a public one. This happens because the public enterprise can list its shares on the Stock Exchange and is subject to more complex verifications.
Documents required to set up a company in Finland
Depending on the selected business form, the documents required by the Trade Register can vary. However, in most cases, information about the owner(s) or shareholder(s) must always be submitted.
From a registration point of view, the sole trader is the simplest legal entity one can set up in Finland and it implies submitting information about the owner and the object of activity, as well as tax and social security registration.
In the case of limited liability companies, here are the main aspects to consider from a documentation point of view:
- the Articles of Association which must comprise specific information, such as the names of shareholders, of the directors, as well as details about the business’ object of activity and its share capital;
- the legal address of the company (as a domestic enterprise, a Finnish address must be provided;
- proof of submitting the required share capital;
- the personal details of the participants in the company must also be filed for registration.
Foreign investors who want to establish businesses here must also apply for Finnish residence permits. Our lawyers also provide immigration services, therefore, we can also help in such matters.
Tax and VAT registration – mandatory steps in setting up Finnish companies
Starting a business in Finland has various advantages, and among them is the fact that it is quite easy to register for taxation and VAT. Even if obtaining a VAT number is not mandatory from the beginning, it is recommended to avoid complications down the line.
The procedure to register for taxation and VAT is quite fast and can be completed in a few days.
Our lawyers in Finland are at your service with complete registration services.
Opening a company bank account
Setting up a corporate bank account is one of the first steps when opening a company in Finland, as a bank reference will be requested by the Trade Register as proof of the share capital deposit. You should be prepared for this step to take the longest in the entire incorporation procedure: about 3 weeks.
If you are a foreign investor and do not want to travel to Finland to set up the account, our lawyers can help you. All you need to do is grant us a power of attorney for representation.
Business licenses and permits
One of the last stages in establishing a Finnish business is licensing. This step is not mandatory for all companies, only for those that work in sectors that require special authorization. This is also the case with branch offices of foreign companies.
If you consider you may need a specific business permit, do not hesitate to get in touch with our Finnish law firm for assistance.
Taxation of companies in Finland
Registration with the Tax Authority for taxation and VAT is mandatory for a Finnish company. From this point of view, businesses must pay the corporate tax imposed at flat rate of 20%. The VAT, the second most important levy here, has a standard rate of 24%.
How easy is it to hire personnel in Finland?
The Finnish workforce is literate and has computer skills; actually around a third of Finland’s working population has a degree or higher qualification. At the level of 2019, the Finnish workforce was divided as follows: 3.78% in agriculture, 21.64% in industry, and 74.58% in the services sector. At the level of 2021, the unemployment rate here was 7.7%.
The foreigners are advised to contact the Employment and Economic Development Office in order to find a job in Finland. The following documents must be provided to the office: the ID (usually the passport), the residence permit, a proof that the requester has a Finnish identification number, certificates or diplomas translated into Finnish, Swedish, or English. The office is keeping a database with them and as soon as an opportunity comes, the candidate is announced.
The employers can contact the office in order to find suitable candidates for the job via telephone or through mail.
If you need other types of legal services, for example assistance with immigration to Finland, you can rely on our team of attorneys. The type of residence permit you should apply for depends on why you're moving to Finland. There are several different kinds of residence permits available. For example, those for self-employed person, an expert in research, au pair, internship, a student, other occupations requiring a work permit, an asylum seeker. Contact us for details on how to immigrate to Finland.
You do not require a permit if you are a citizen of an EU nation seeking residency in Finland. You must register your right to live in Finland if you have been a resident for more than three months. The same requirements apply to citizens of Switzerland and Liechtenstein, who must complete similar registration steps as EU ones. In most cases, poor language abilities are the main cause of rejection when applying for citizenship in Finland. This is one of the usual cases where an applicant must be thoroughly informed before filing the application for a Finnish passport. For details on all requirements, you can discuss with our consultants.
What are the main points of interest for foreign investors?
The Finnish economy is based mostly on services (65%), followed by manufacturing and refining (31%). Finland is also a highly industrialized country with the main products based on paper, electronics and metal products. Finland is also known for the wood products as it has 2/3 its surface covered with woods and it’s known to be one of the world's leading wood producers.
Besides the wood industry, Finland is also known for the high tech technology products.
The infrastructure is great and the shipments are mostly carried by sea (more than 90 % of the foreign trade).
The good location is offering access in Northern Europe, home to 80 million consumers to the Finnish entrepreneurs. For this reason, if you decide to move here you can use the services of our immigration lawyers in Finland.
What are the advantages of a holding company in Finland?
The advantages of the holding companies in Finland are related to the extensive network of double tax treaties signed all over the years by it. These treaties are granting refunds or exemptions from paying corporate taxes and exemptions or minimizations of the withholding taxes on dividends and royalties.
The process of registration of a new company takes around two working weeks but it consists in only three easy steps.
What to consider as a foreign investor in Finland
Finland is one of the most competitive economies in Europe with strong business values, which is why it attracts foreign investors from all over the world. When deciding to set up a business here one of the most important decisions to make is whether you want to relocate here or not. In case of the first scenario, you will need a residence permit for Finland. You do not need to worry about that as our immigration lawyers can help you.
After living here for at least 4 years based on a permanent residence permit you can qualify for Finnish citizenship. Please note that you must also stay here for at least 5 years to get indefinite residency.
How long does it take to open a company in Finland?
Time is a sensitive issue for many businesspeople, which is why many ask how long it takes to set up an entity. So, here is what you need to consider:
- the registration process itself takes around 15 business days;
- the opening of the bank account can also take about 3 weeks;
- getting a tax ID number takes 1 to 3 days.
If you want to open a company in Finland, contact us. Our immigration lawyers in Finland are at your disposal with personalized services. The Finnish Immigration Service makes decisions regarding the acquisition, maintenance, and loss of citizenship in Finland as defined by the law as well as the assessment of citizenship status. If you consider you do not meet the requirements to apply for citizenship, but you want to obtain it, get in touch with our lawyers. They can verify your status.