SETTING UP A BUSINESS IN FINLAND IS QUICK AND EASY
The company registration in Finland requires only a few straightforward steps. The laws are very encouraging to the investors who want to start a company in Finland.
International companies are warmly welcomed and enjoy high return on investment in Finland. They can access the same benefits as Finnish companies. Opening a legal entity takes only a couple of weeks.
TYPES OF BUSINESSES IN FINLAND
In Finland, foreign companies most commonly conduct business through private or public limited liability companies, or through a Finnish branch office. Business can also be conducted through general or limited partnerships or co-operatives. A foreign organization or foundation can also establish a branch in Finland.
The Limited Company (osakeyhtiö-Oy) in Finland has is established by at least one member with a minimum share capital of 2500 euros (cash or assets) divided into shares which are not transferable to the public. The management is assured by at least one manager, while the major decisions are taken by the general meeting of the shareholders.
A Public Limited Company (julkinen osakeyhtiö-Oyj) in Finland is designed for large business and it is founded with a minimum share capital of 80.000 EUR (cash or property) by at least one statutory person. The management is assured by a management board must composed by more than 3 members (more than 50% of them must be EEA residents) and a managing director if the capital is above 80.000 EUR. The shares of this type of entity can be listed at the Helsinki Stock Exchange.
Other forms of Finnish businesses. The smallest form of business in Finland is the Private Person Carrying on Trade (yksityinen elinkeinonharjoittaja) or a private trader, where the owner is not considered a separated entity from his/her business and it is liable with its own assets for the company’s debts. The owner must pay the specific business taxes and it’s free to withhold profit.
A General Partnership (avoin yhtiö-Ay) in Finland is composed by at least two members called general partners. The incorporation of this type of business doesn’t 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.
The Limited Partnership (kommandiittiyhtiö,-Ky) in Finland, is formed by least 2 partners, one of them must be the general partner with rights to decide in the name of the business and claim profits, and one the silent partner which doesn’t absorb the losses but has no decisional powers and cannot claim profits.
Forms of business for foreign investors. A Finnish Branch of a Foreign Company (sivuliike) it’s part of a foreign society which operates in Finland. It is not considered a separate entity and the capital is provided by the parent company. The investors can also open a representative office incorporated mostly in order to perform research activities on the Finnish market.
INCORPORATION PROCEDURE IN FINLAND
In the beginning of company incorporation in Finland, the entity must deliver the following documents to the bank in order to open an account and receive a certificate proving that the minimum share capital was deposit: the foundation deeds, a description of the nature of the banking transactions and the company's field of business. Once deposited, the amounts of money cannot be withdrawn until the company is registered.
The registration of a new business in Finland is simplified by the procedure of 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 Limited Liability Companies Act, a certificate of the auditors confirming the shares are respecting the provisions of the Limited Liability Companies Act and other relevant documents asked by it.
The registration for the pension insurance can be made at a pension provider freely chooses by the entrepreneur and it’s the last step of the company incorporation in Finland.
ECONOMY OVERVIEW IN FINLAND
Company formation in Finland is preferred because it offers an industrialized economic environment, extremely competitive in manufacturing, engineering, telecommunications, and electronics industries. Finland also excels in high-tech exports such as mobile phones.
Finland is well-known as one of the world's leading wood producers and provider 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 the waterway transport (90% foreign trade is carried by sea).
4 QUICK STEPS TO SET UP A BUSINESS IN FINLAND
1. Select a name for your company. To gain exclusive rights to the name, you should submit it to the Trade Register which is maintained by the Finnish Patent and Registration Office (PRH).
2. Open a bank account for your business. The company requires a bank account to pay share capital, process payment transactions and support accounting.
3. File a start of the business notification. Establishing and registering a business requires that a notification be filed with the Trade Register and various Tax Administration registers. This can be done easily using a single form ("Y form").
4. Take advantage of online tools. You can establish a limited liability company online through the Business Information System online service. You can also create a workspace at My Enterprise Finland. The My Enterprise Finland service gives you access to a wealth of useful services. These online services require you to log in with your online banking credentials.
You can establish a limited liability company online through the BIS online service (ytj.fi).You can also create a workspace at My Enterprise Finland. The My Enterprise Finland service gives you access to a wealth of useful services. These online services require you to log in with your online banking credentials. Another source of information is Suomi.fi where you can find information on how to start a business and business licenses.
SETTING UP A LIMITED COMPANY
A limited company can be established by one or more natural or legal persons (founders). At least one of the founders shall be a permanently resident or, if the founder is a legal person, have their domicile in the European Economic Area – unless the National Board of Patents and Registration grants an exemption from this rule. The nationality of the founder is thus irrelevant. A legal person shall have their domicile in the European Economic Area when it has been established in accordance with the laws of a State which belongs to the European Economic Area and when its registered office, central administration, or head office is in a State belonging to the European Economic Area. A person who is legally incompetent or declared bankrupt may not act as founder.
If a permit is required, the application is to be submitted to the National Board of Patents and Registrations either in Finnish or in Swedish. An application fee (EUR 120) is paid for each permit decision.
A public limited company shall have a minimum share capital of EUR 80,000 (Until 30th June 2019 a minimum share capital EUR 2,500 was also required from private limited company, now capital is not required). The share capital must be paid to the company's account in full before the company can be entered in the Trade Register which is maintained by the National Board of Patents and Registration.
New businesses submit the basic declaration to the Trade Register using the start-up notification form. This form can also be used for registration with the Tax Administration, registration of a VAT liable business, registration as an employer, and registration in the tax prepayment register.
SETTING UP A BRANCH OF A FOREIGN TRADER
A branch refers to a part of a foreign organization or foundation that conducts continuous business or professional activities in Finland from a permanent place of business in Finland in the name of and on behalf of a foreign organization or foundation.
The trade name of a branch of a foreign entrepreneur established in Finland shall contain the trade name of the foreign entrepreneur with an addition to the name which indicates that it is a branch – e.g. CDE Cargo Ltd., branch of Finland.
The application fee for a branch of a foreign trader is EUR 380. If the trader opening the branch is from a country outside the European Economic Area (EEA), they will also need a permit from the National Board of Patents and Registration for the establishment of a branch. This permit costs EUR 120.
ACQUISITION OF A BUSINESS
Foreigners may also acquire Finnish enterprises, their business operations, or become partners in an existing enterprise. The object of acquisition may be, for example, a private undertaking; shares in a general or limited partnership; the entire stock of a limited liability company; or a majority of the shares. You can become a member of an existing cooperative by paying the participation share.
All corporate acquisitions in the defense and dual-use goods sector are subject to approval by the public authorities – approval will be based on an application. In the civil sector, Finnish enterprises considered critical for securing vital functions within society, and corporate acquisition will also be subject to approval.