- Finland is a friendly place for global investors. It has a flourishing private sector, an advanced industrial economy, and a business climate that is quite welcoming to international investors. The country has a developed infrastructure, a trained workforce, competitive operating expenses, and business-friendly administration.
- Finland is one of the least corrupt nations in the world, according to Transparency International, and there is very little bureaucracy there. Finland abides by both national law and EU directives as an EU member. In Finland, foreign-owned enterprises can benefit from government investment incentives and abrasive research and development resulting from significant collaboration between Finnish institutions and the commercial sector. Businesses also profit from clusters and centers of high-level knowledge in diverse areas, which attempt to maximize the advantages of research and international cooperation. Finland, being one of the world’s most competitive and open economies, has a lot to offer international investors.
- Considering the above, if you too are contemplating starting a business in Finland, then Tetra Consultants’ team of business set-up consultants is here to assist you to get started in Finland. Tetra Consultants is an international consulting firm that is proficient in assisting entrepreneurs to jumpstart their business expansion journey in countries like Finland. Through this article, our team aims to guide you on the step-by-step procedure that takes place to set up a business and register company in Finland.
A step-by-step guide to starting a business in Finland
In order to establish a business in Finland, a candidate can use the Finnish LLC (Limited Liability Company), which is one of the most frequently employed business forms for forming a company. Apart from that, a shelf company can also be used when forming a company in Finland. The following steps must be considered the most prevalent when starting a business in Finland:
Step 1: Choose a company structure
- In order to start a business in Finland, you need to have a corporate legal entity to maintain the good legal standing of your business as well as to protect you from the intervention of personal assets in case of bad debts. There are different business models available in Finland, such as private entrepreneurship, limited liability company, general partnerships, limited partnerships, public limited companies or corporations, and cooperative associations.
- Limited Liability Company: This type of entity has the concept of limited liability. Such a company is also observed as a domestic tax resident.
- Private Limited Company: This sort of company is otherwise called Osakeyhtiö (Oy). Listing shares in the stock exchanges is not permitted for such entities. Such entities have limited liability to the amount of capital that is bought in. Private Limited and Public Limited Companies in Finland are directed and governed by the Finland law system i.e., the Companies Act (2006/624).
- Representative Office: It is a simple augmentation of a foreign parent company. The representative office can complete various types of exercises connected with the promotion of various exercises being performed of the parent company. This would typically incorporate statistical surveying and different kinds of exercises.
- Branch Office: A branch office is a simple expansion of the foreign parent company. In the branch office generally, tasks can be completed under the purview of the foreign parent company.
- Co-usable society (Osuuskunta): Cooperative societies are governed by the Co-operatives Act (2013/421). The members are individually liable and are not dependent on each other for commencing various activities. Co-operative society’s members are not liable for the debts taken by the company.
Tetra Consultants’ team of business setup experts will help you opt for the most suitable form of the business structure by analyzing your long-term business needs and goals. At the same time, we will help you navigate through the procedure and different points of concern for such entities including taxation, minimum regulatory requirements of directors and shareholders, etc.
Step 2: Consider minimum regulatory requirements
- Once you have decided on the company structure for your business, it is important that you also analyze the resources required to form the same.
- Minimum capital requirement: Accordingly, there is no minimum capital requirement for a limited liability company. Nonetheless, for a public limited company in Finland €80,000 is the minimum capital that must be maintained by the company.
- Minimum number of Directors: For the limited company and corporation to be formed in Finland, at least one director and one deputy director are required. In the instance where two directors are appointed, the board will have to recruit a deputy director as well to begin various business operations. A director should be an individual above the age of 18 who has not been convicted of any criminal acts. The director should not be declared bankrupt or declared insolvent. A minimum of one member or director must be a resident in the European Economic Sector (EEA). This would typically be the case unless they are granted an exemption by the Finnish Trade Register.
- Minimum number of Shareholders: For all the types of company structures in Finland, there is a requirement of having at least one shareholder irrespective of nationality.
Step 3: Register company name
- Prior to starting a business in Finland, the first step is to obtain registration for the proposed company name. You have to choose a suitable company name before proceeding to register the name. Some considerations you should take note of when choosing a company name include not being identical or similar to existing company names, does not infringe trademarks, not reserved, and not vulgar/obscene.
- The entity must comply with the requirements for the name. A private limited corporation must contain the letters Oy (“Ltd”) or osakeyhtiö (meaning “limited company”) in its name. A public limited corporation created in Finland must contain the letters Oyj or “Julkinen Osakeyhtiö” in its name. Once decided, Tetra Consultants’ team of experts will reserve the same with Finnish Trade Register which is maintained by the Finnish Patent and Registration Office (PRH).
Step 4: Filing of business notification
- Establishing and registering a Finnish LLC also requires that a notification be filed with the Trade Register and various Tax Administration registers. This can be done easily using the “Y form” through the Finnish Patent and Registration Office.
Step 5: Preparation of corporate documents
- Once the above things are in place, you can proceed with the preparation of incorporation documents including memorandum and articles of association, business plan, and other relevant policies/ documents specific to the business operation.
- The documents prepared are required to be additionally notarized by the local public notary. Tetra Consultants can take due care of the preparation and notarization of incorporation documents. We additionally assist with the translation of documents in case they are required to be drafted in the local language.
- Tetra Consultants’ legal team is proficient with the drafting and proper collation of the above-mentioned documents. Once drafted, our team will provide you with the prototypes for your confirmation and modification based on your business activity in the nation.
Step 6: Corporate bank account opening
- Prior to registering a company in Finland, corporate legislation demands the deposition of the registered capital. You will need to have a bank account opened in Finland or another nation to do so. Ensure consulting with Tetra Consultants’ team of banking specialists on corporate bank account opening and deciding on the best international bank account for your business needs in Finland.
Step 6: Deposit the registered capital:
The registered capital has to be deposited in full. The required amounts depend on the form of company ownership:
- Public limited company – €80,000.
- Limited liability company – €1.
Step 7: Company registration with the Finnish Trade Registry
- Tetra Consultants team will ensure that you fulfill the other regulatory requirements of company incorporation in Finland.
- Our team can provide assistance with the provision of a company secretary and local registered address which will be used to keep the official records and register your entity.
- With everything in place, Tetra Consultants’ team of incorporation specialists will proceed to submit the documents listed below to the Finnish Patent and Registration office for proceeding with the registration of the entity.
- Notarized and apostilled passport copies.
- A recent utility bill or a bank statement to serve as proof of the residential address.
- Police clearance from the company founder’s home country.
- Prospective company by-laws.
- A bank statement confirming the deposit of the registered capital.
- Company officers’ signature samples.
- Completed application form for company registration (Y-form).
Step 8: Tax registration
- Once the entity is duly registered and you have received the certificate of incorporation, it is time that you consider the post-registration compliance like registration with the tax authorities, hiring of employees, registration of entity under different social contribution or work scheme necessary if hiring local employees.
- Tetra Consultants team of chartered accountants usually take over the engagement once the entity is duly incorporated, in order to address the tax concern of the entity. Our team will collate the necessary documents to obtain the tax identification number from Finnish Tax Administration.
- All in all, you can expect to start the business operation under your newly incorporated Finnish entity within a period of 8 weeks.
- Navigating the country of Finland’s complex business climate might be a challenging process – a hassle to say the least. However, with the key benefits and a business-friendly environment outlined above, it is easy to see why many businesses would choose to set up in Finland. As such, Tetra Consultants hopes that this article has provided you with a much better understanding of the key steps to start a business in Finland so that you can truly decide on whether you should undertake the business registration process in Finland yourself.
- So, what are you waiting for? Contact us to find out more about the process of starting a business in Finland, and our dedicated and experienced team will respond within the next 24 hours. Tetra Consultants will not only empower you by helping to navigate the different regulations of Finland but also aid in facilitating the registration of your company there while providing invaluable, nuanced insights into any potential challenges.