How to start a business in Finland

Finland’s economy is largely driven by the service sector, with the manufacturing and oil industries also making up a large slice of the gross domestic product (GDP).

There are many small and medium sized businesses in Finland, of which around 69% are single-person businesses and 93.1% have fewer than 10 employees.

If you're considering joining the ranks of entrepreneurs making a living in Finland, then you need to know how to get started.

In this blog post you’ll learn about the different business structures in Finland, what you should know before setting up a new business in the country, and how to take those important first steps.

What types of corporate entities are there in Finland?

There are several different options for corporate structure in Finland if you want to start a business in the country.

The most common business structures are:

• Sole proprietorship
• Partnership or Limited Partnership
• Limited Company
• Cooperative association

Sole proprietor (toiminimi)

It's relatively straightforward to set up a sole proprietor business in Finland.

This business structure is best for those working alone or in businesses with very few employees.

As a sole proprietor in Finland, you would be personally liable for your business debts and pay personal income taxes.

Partnership (Avoin Yhtiö) or limited partnership (Kommandiittiyhtiö)

Partnerships are an ideal business structure option for working alongside one or more entrepreneurs.

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.

There’s also a general partnership, in which all partners are jointly liable for the partnership’s debts.

Limited Company (osakeyhtiö)

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.

If you choose to set up a limited company, there's no longer a minimum capital requirement for private limited companies, but ¹you’ll need €80,000 to set up a public limited company.

Cooperative association (osuuskunta)

A cooperative association is owned by its members, all of whom have voting and decision-making rights. Each individual’s liability is limited to the amount they invest in the business.

Before deciding which business structure is best for your needs, take a moment to think about how you want your business to look in the long term.

Seek local legal advice if necessary to make sure you fully understand all options and can make the most informed decision.

Visa requirements

As a US citizen, you’ll need to obtain a visa to live and work in Finland.

There are various types of visas available if you’re looking to set up in the country long-term (more than 90 days).

Residence Permit

If you’re interested in setting up a company, partnership, or sole proprietorship in Finland, a residence permit is the visa you’ll most likely need.

There are various types of residence permits based on the type of work you’re looking to do in the country.

To apply for one of these visas, you’ll need:

• A business plan
• Proof of living expense funds
• Company registration documents
• Details about the nature and sector of your business

At the same time you apply for your resident permit, you should also apply for a D visa which allows you to travel to Finland as soon as your residence permit has been approved.

Start-up Permit

A start-up permit is available to innovative entrepreneurs who are looking to start business primarily in the technology sector or a growth-oriented industry.

To apply for a start-up permit, you’ll need:

• A business plan
• Statement of innovation potential
• Financial plan and funding strategy

Things to know before getting started

Finnish law stipulates that you must open a corporate bank account before you register your company with the Finnish Patent and Registration Office (PRH). This is so that the minimum share capital required can be paid directly into this account to complete the registration of your company.

You can open a bank account with any of the major banks operating in Finland.

As well as any minimum investment requirements, there's a ²startup fee of EUR 370for a limited liability company by mail or online.

It's worth knowing that all forms must be filled out in either Finnish or Swedish, although many are available in bilingual versions, including English.

The Finnish Patent and Registration Office (PRH) provides an introduction packet in English containing the guidelines to file a start-up notification in Finland. In it, you’ll find information on how to complete the forms, including models and templates.

However, you might need support from a local or an agency to help you.

Find out how to name your new business with our useful generator of business names ideas.

What is the company registration process in Finland?

To register your business in Finland you need to complete a startup notification form (Form Y) and provide establishment documents, which vary according to the type of business structure you choose.

Fill out business documents

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.

Submit the documents

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.

Register your company name

As part of the application process, you’ll register your company name, which will give you exclusive use of that name in Finland. If the company name you choose 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. The threshold for VAT is currently ³EUR 15,000 in annual revenue.

This isn't normally required if your employees are family members.

Legal obligations and responsibilities

As a business owner in Finland, you have several legal obligations you’ll need to comply with.

Annual financial reporting - Most businesses in Finland must submit annual financial reports which include profit and loss statements and balance sheets to the Trade Register through the Patent and Registration Office (PRH).

Finland operates an integrated system by which companies usually only need to report or provide information once. This data is then shared with all relevant authorities, streamlining the process for business owners.

Tax registration - Once you register your business, you’ll automatically be added to the tax register, for VAT too if applicable.

Permits - Some trades are covered by permits in Finland, so you should 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.

Employer registration and insurance - 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 with the Finnish Tax Administration.

You will also need to contribute to employee pension insurance (TyEL), unemployment insurance, and other statutory employee benefits as an employer in Finland.

Where can I find help to start my business in Finland?

Enterprise Finland is a great place to start if you're looking for advice and financing for your startup. You may also be eligible to apply for a startup grant from the Finnish government.

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 organizations 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 should get off to a flying start.

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Read the guide on how to open a Wise Business account

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Sources used :

¹ Ten law
² PRH
³ Suomi

Sources last checked on 15-November- 2024.