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Finland’s economy is dominated by the service sector, with the manufacturing and oil industries also making up a large slice of gross domestic product (GDP). There are some 280,000 small and medium sized businesses in Finland, employing over 900,000 workers - a significant proportion of the nation’s 5.5 million people.
If you're considering joining the ranks of entrepreneurs making a living in Finland, then you need to know how to get started. Here’s a helpful guide to starting a business in Finland.
There are several different choices of corporate structure in Finland if you want to start a business there. The most common corporate entities are as follows:
- Sole proprietorship
- Partnership or Limited Partnership
- Limited Company
- Cooperative association
It's quick and easy to set up a sole proprietor business. This structure is intended for those working alone or in very small enterprises. Business tax is paid along with personal tax as though the founder and business are the same entity, and the individual founder is liable for any company debts.
Partnerships are useful when several entrepreneurs want to work together. In Finland it's possible to have a limited partnership in which at least one partner is a ‘sleeping partner’ or investor, meaning they’re not involved in the day to day affairs of the business.
A limited company is slightly more complex to set up, but means that the liabilities of the business are held separate to the person or people who start the company. In this case there's a minimum initial investment required.
A cooperative association is owned by its members who all have voting and decision making rights. Their liability is limited to the amount they invest in the business.
The different business structures are suited to different types of business. It’s worth thinking long term about how you want your business to grow before choosing, and taking local legal advice to make sure you fully understand all options.
You can compare the administration needed to start a business in Finland, with that in other countries, on the website of the World Bank's 'Doing Business' report. This helpful site summarises some of the main legal and bureaucratic steps you'll need to take when starting your new venture.
Finnish law requires you to open a corporate bank account before you register your company. This is so that the minimum share capital required can be paid directly into this account to complete the registration of your company. Accounts can be opened with any of the major banks operating in Finland.
To open a private limited company the minimum share capital is EUR 2,500, while to open a publicly limited company the minimum is EUR 80,000.
As well as any minimum investment requirements, there's a handling fee of EUR 380 to register your company name if you use mail, or EUR 330 if you apply online.
It's worth knowing that all forms must be filled out in Finnish or Swedish, although they're available in bilingual versions, including English. There's an introduction packet in English containing the guidelines to file a start-up notification in Finland. It explains how to complete the forms, including models and templates. However, you might need to find a local friend or agency to help you.
To register your business in Finland you need to complete a startup form (Form Y) and provide establishment documents, which vary according to the type of business structure you choose. These might be the Partnership Agreement or the Memorandum and Articles of Association in the case of starting a limited liability company, for example.
You'll also need to complete a personal data form for the founders of the company.
The Enterprise Finland website lists the details of the business registration process in Finland and links to template forms. Here you can see the full list of documents required by business type, as well as the details needed to prepare documents like the partnership agreement.
Once you've completed the forms and prepared the establishment documents, you'll need to submit them online or by mail. Online submission is cheaper, or alternatively you can post or hand deliver them to the Finnish Patent and Registration Office, or a local tax office.
As part of the application process, your company name is registered, giving you exclusive use of that name in Finland. If your company name is unavailable you'll need to select a new one.
Depending on the size of your company you might also need to register for VAT, or with the local employment register. This isn't normally required if your employees are family members.
As a business owner in Finland, you have certain responsibilities.
For example, most businesses must complete annual financial reports and submit them online to the trade register. Luckily, Finland operates a ‘joined up’ system by which companies usually only need to report or provide information once. This is then shared with all relevant authorities. This system also means that once you register your business, you'll automatically be added to the tax register.
Some trades are covered by permits in Finland, so you should also check if this applies to the area in which your business operates. If you need a permit, these can be obtained from the Patent and Registration Office, for a fee of around EUR 120.
If you have two or more permanent (or six or more temporary employees) during the calendar year, you'll have to register as an employer. You may also have to pay pension and unemployment insurance for your staff.
Enterprise Finland is a great place to start if you're looking for advice and financing for your startup. They host a good range of advice articles and videos for new entrepreneurs. You may also be eligible to apply for a startup grant from the Finnish government, or EU grants and funding.
Other useful support can be found in the local chambers of commerce and business associations which operate near you. Ask others in your industry which organisations are worth joining before you pay any fees.
Once you’re in Finland and ready to get going, look for local networking events on sites such as Meetup, Eventful and Eventbrite. Here you can meet like minded people and build your customer and business contact book.
Starting a new business can be tough, but with a little help from your new network and friends, your business in Finland will get off to a flying start.
When starting your business, if you find the need to send or receive money from abroad at the least possible cost, consider using Wise. Not only does their real mid-market exchange rates generally beat the banks, but since your money is received and sent locally in both the sending and recipient currency, all those nasty international fees magically disappear. Give it a try.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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