- Starting one’s own company has in recent years started to become more like the norm than the exception, with new companies being born at a rate like never before. Because of this, and the increasingly global world we live in, starting a business in another country is not nearly as hard and daunting as it once was. The advantages range from cultural to financial. Learning a new language, growing a business network, and taking advantage of the home country’s possible advantages in a market that is not saturated with the same ideas are just a few reasons to change the scenery. And when it comes to doing business abroad, there are few better choices than Finland.
- One of the most compelling reasons for choosing Finland is the ease of starting a business. The only form of a company where one needs any starting capital is the Finnish equivalent of a limited company (Osakeyhtiö, or Oy for short), and even then the required amount is only € 2,500 for a private venture. In contrast, starting a limited company requires a starting capital of €25,000 in Germany. The process is also designed in a way that is quick as well as foolproof. The registration process is constantly improving and can already be done online for the most part.
- Finally, doing business with Finns should be a breeze. Honesty and reliability are held in high regard so new players are treated with respect. While some might argue that bureaucracy is an obstacle, the opposite argument can also be made. Important matters are handled properly which makes starting a business as a foreigner that much easier. Finns also usually know English extremely well, making initial communications effortless.
- In this article, our team at Tetra Consultants has outlined the important things to take note of when starting a company in Finland so that you can make a more informed decision once you advance to register company in Finland.
Starting a Company in Finland? Things To Note
When starting a company in Finland, there are several important things to keep in mind. Here are some key considerations:
- Business culture: It is important to understand the business culture in Finland, which is generally characterized by a strong emphasis on honesty, punctuality, and direct communication.
- Language: While many Finns speak English, it is a good idea to learn some basic Finnish phrases and terminology to help you communicate with local authorities, partners, and customers.
- Taxation: Finland has a complex tax system, and it is important to understand the various tax obligations that come with starting and running a business. This includes income taxes, value-added tax (VAT), and social security contributions.
- Social security: All employees in Finland are entitled to social security benefits, which are funded through employer and employee contributions. As an employer, you will need to register with the Finnish Centre for Pensions and pay these contributions on behalf of your employees.
- Intellectual property: Protecting your intellectual property is important when starting a business. Finland has a strong legal framework for intellectual property rights, and it is recommended that you register your trademarks and patents with the Finnish Patent and Registration Office (PRH).
- Regulations: Depending on the type of business you are starting, there may be specific regulations and permits that you need to obtain. It is important to research and understand these requirements to avoid any legal issues later on. For example, the regulation governing starting aN LLC in Finland is the Finnish Limited Liability Companies Act. This Act sets out the legal requirements and procedures for registering a limited liability company in Finland, which is the most common form of company structure in the country.
- The Finnish Limited Liability Companies Act sets out the following requirements for starting a limited liability company in Finland:
- Minimum share capital: The minimum share capital for a limited liability company in Finland is €2,500.
- Board of directors: The company must have a board of directors consisting of at least one member. The board is responsible for managing the company’s affairs and making decisions on behalf of the company.
- Articles of association: The company must have articles of association, which set out the rules and regulations governing the company’s operations.
- Shareholders: The company must have at least one shareholder.
- Registered address: The company must have a registered address in Finland.
- Accounting: The company must keep proper accounting records and prepare annual financial statements in accordance with Finnish accounting standards.
- In addition to the Limited Liability Companies Act, there may be other regulations and requirements that apply to specific types of businesses, such as food service establishments or healthcare providers. It is important to research and understand these regulations to ensure compliance when starting a business in Finland.
- Residency requirements of directors of a Finnish company: There is no specific residency requirement for directors starting a company in Finland. Directors of a Finnish company can be Finnish residents or non-residents, and they do not need to have Finnish citizenship.
- However, it is important to note that at least one member of the board of directors must have a legal address in the European Economic Area (EEA) or Switzerland. This means that if all the directors are non-residents of the EEA or Switzerland, the company must appoint a so-called “contact person” who has a legal address in one of these regions. The contact person will be responsible for receiving official documents and notices on behalf of the company.
- Additionally, if a non-resident director is appointed to the board, they may need to obtain a Finnish personal identity code (henkilötunnus) for tax and social security purposes. This can be obtained from the Finnish Tax Administration (Verohallinto) upon request. Tetra Consultants can fulfill your regulatory requirement of having a legal representative in Finland by providing our nominee director services in case any of the board member is not from EEA or providing company secretarial services as the case may be.
- It is recommended to seek advice from Tetra Consultants’ team of lawyers or accountants to ensure compliance with all legal and regulatory requirements when starting a company in Finland.
- Networking: Networking is an important part of doing business in Finland. Joining business associations and attending industry events can help you connect with potential partners, customers, and suppliers.
Starting a company in Finland?
- The process of Finnish company setup is hassle-free if you are familiar with the entire incorporation process.
- Tetra Consultants strives to provide our clients with a seamless experience when starting a company in Finland. Our team of experts will ensure that your Finnish company can be operationally ready as soon as possible. Contact us and we will revert within 24 hours.