Want to set up a firm in Finland? We can assist you in starting a business or in buying a shelf company in Finland with a full package of necessary documents, legal advice and follow-up support. Incorporation of a firm in Finland includes provision of a registered office (for at least 1 year in any of our service plans), an apostilled set of constitutional documents, secretarial services and assistance with compliance fee and pre-approval for opening an account in banks of Finland. The total price of company formation in Finland includes all necessary fees and charges for the first year of operation, as well as full one-year nominee service (package Optimum).Expand description »
Finland allows various forms of business types, regulated by the Companies Act. In many ways, setting up a company in Finland does not differ from setting it up anywhere else in Europe. Forms of business entities are not very different. An entrepreneur, national or foreigner, can choose between being a private entrepreneur, a general, or a limited partnership, limited liability company and cooperatives, all of which must be entered for registration with the Trade Register. The Finnish Trade Register is a public register that contains information on traders and businesses. The majority of businesses are limited liability companies and private traders. The register contains official details of businesses all over Finland.
Private entrepreneur. A European Economic Area resident may act as a private entrepreneur. Non-EEA residents need a permit from the National Board of Patents and Registration. With regard to the establishment of a business, citizenship is not of importance. The decisive factor is the individual's permanent place of residence.
There are no statutory provisions concerning the minimum capital of a private entrepreneur, and the audit of a private entrepreneur's accounts.
A private entrepreneur need not draw up a separate Charter of Foundation when setting up a business.
As a rule, all taxable income from a private entrepreneur's is taxable. Expenses incurred in acquiring or maintaining business income are deductible.
General Partnership. There must be at least two partners (founders) in a general partnership. At least one of the partners in a general partnership must have a permanent place of residence, or, if the founder is a legal entity, be domiciled in the European Economic Area (EEA). If none of the partners in a general partnership has a place of residence/domicile in the EEA, all partners from outside the EEA need a permit from the National Board of Patents and Registration. No monetary investment is required of the partners in a general partnership. Work contribution is sufficient. A general partnership must have a representative who is domiciled in Finland. The representative is entered in the trade register.
Under some circumstances the partnership has to appoint an auditor.
No legally incompetent person, bankrupt person or anyone banned from engaging in business may act as a founder.
The profits of a partnership are divided between the partners as agreed in the partnership agreement and taxed as their personal income.
Limited Partnership. There must be at least two partners (founders) in a limited partnership, at least one of whom must be a general partner.
At least one of the general partners in a limited partnership must have a permanent place of residence, or, if the founder is a legal entity, be domiciled in the European Economic Area (EEA). Otherwise, a permit is required from the NBPR for all general partners that are not from the EEA. This requirement does not apply to the silent partners. Silent, or limited, means he is liable to the extent of his or her contribution, but may not apply his own decisions in the management of the company. Silent partners do not contribute to the coverage of losses. A silent partner must make a capital investment in the partnership, while work contribution is sufficient for general partners. A limited partnership must have a representative who is domiciled in Finland. The representative is entered in the trade register.
The profits of a partnership are divided between the partners as agreed in the partnership agreement and taxed as their personal income. A silent partner's share of the income corresponds to the interest paid on his investment.
In a limited partnership a silent partner is first paid a share of the profits on his investment and does not contribute to the coverage of losses.
Limited Liability Company (Osakeyhtiö / Oy). According to the new Finnish Limited Liability Companies Act (entered into force on 1 September 2006) there are not founders but shareholders in a limited liability company. There must be one or more shareholders in a limited liability company.
The new Finnish Limited Liability Companies Act does not establish any restrictions for the place of residence or domicile for share subscribers (even if the question is about a single-member company). The shareholders may also have their place of residence or domicile outside the EEA.
If a limited liability company is a single-member company, that is, the company has only one shareholder and he/she is the only member of the Board, the Board must then have at least one deputy member.
A limited liability company must have a representative who is domiciled in Finland. The representative is entered in the trade register.
A limited liability can be private or public. The share capital of a private limited liability company must be at least EUR 2,500, and the share capital of a public limited liability company must be at least EUR 80,000. The share capital must be paid to the company's account in full before the company can be entered in the Trade register maintained by the National Board of Patents and Registration.
The shares of public limited liability companies only may be subject to trade as referred to in the Securities Market Act.
The proportional tax rate for limited liability companies is 24.5%.
Cooperative. A cooperative may be established by no fewer than three founders. The founders may be private individuals or corporations, or foundations of other legal entities. A founder must become a member of the cooperative. No legally incompetent or bankrupt person may act as a founder.
Instead of obtaining a profit for its members, the purpose of a cooperative is to offer services for its members. Only a limited consideration on capital invested in the cooperative is paid from the profits.
The founders' place of residence or domicile is not a decisive factor for the establishment of a cooperative. The founders may also have their place of residence or domicile outside the EEA.
A cooperative must have a representative who is domiciled in Finland. The representative is entered in the trade register.
The amount of the participation share is decided by the founders and included in the rules. Participation shares must be of equal value. The accumulated participation shares form the cooperative capital.
The proportional tax rate is 20%, as with limited liability companies.
Branch (or office) of a Foreign Enterprise. A foreign corporation or foundation may conduct business activities in Finland without having an independent local subsidiary if it establishes a branch in Finland.
The branch of a foreign enterprise refers to the part of a foreign corporation or foundation that engages in continuous business or trade activities in Finland from a permanent establishment in Finland in the name of the foreign corporation or foundation.
A foreign corporation or foundation whose domicile is outside the EEA and that wishes to establish a branch in Finland must apply for a permit from the National Board of Patents and Registration.
To receive a permit the branch must file a basic declaration with the National Board of Patents and Registration.
The branch of a foreign enterprise must have a representative domiciled in Finland. No legally incompetent or bankrupt person may act as a representative. Information on the representative must be submitted for registration in the trade register.
The existence of a permanent establishment will have to be resolved separately for taxation purposes. As a rule, a foreign company is regarded to have a permanent establishment when it conducts business activities subject to the Business Income Tax Act from a fixed place of business. As long as they are regular, the activities need not be continuous or uninterrupted (this means that the company must have personnel who conduct the business operations).
The profits from a permanent establishment are taxed in Finland according to Finnish tax legislation (the permanent establishment may be a place of business comprising a branch, office, industrial plant, workshop, retail outlet or other permanent buying and selling point.)
The permanent establishment is also under a legal obligation to keep books. Expenses incurred by the permanent establishment are deductible from its income. Expenses due to the management and administration of the company, irrespective of the place where they were incurred, are also deductible.
In general, a permanent establishment of a foreign company is treated as a Finnish limited company for taxation purposes. Income from the permanent establishment is taxed at the corporation tax rate of 20%. The country of residence of the main branch will levy taxes on the total income of the entire company. Double taxation is eliminated in the country of residence of the main branch by crediting the company in full for the tax paid in Finland.
A branch is not a separate legal entity. Auditors are elected in accordance with the type of office of the foreign enterprise and the appropriate regulations. The obligation to audit the accounts is based on the Auditing Act. In practice the auditors of a branch are probably elected by the enterprise’s representatives in Finland.
There are two ways of forming a Finnish limited liability company:
In case establishment of a limited liability company directly to foreign shareholders, the formation includes the following stages (detailed information on each stage will be given in further subsections):
The company must be reported for registration within three months from the date when the Memorandum of Association was signed otherwise the Memorandum is to be considered void.
If to expedite preparation of the registration documents through agent’s services, it will take from 1 working day up to three weeks to have all the documents prepared.
The very registration term for a limited liability company with the National Board of Patents and Registration is 6 working days (from the moment of the document submission up to the moment of filing the company name on the Trade register). Delivery of papers confirming the company registration may take up to 4 days. Handling fee is EUR 350 and EUR 75 each auxiliary name (if any).
The formation of a limited company is notified to the National Board of Patents and Registration by using documents and forms in Finnish or in Swedish. It is recommended to make documents and forms in Finnish, for Swedish is spoken only in some areas of the country including Helsinki.
The company name must identify the business and be distinct from the business names already in the register.
The company name examination takes place after the notification has been filed with the Trade Register. Under the Company Names Act, a company name must be individual and distinctive, and it must not be likely to be confused with a company name or a trademark that has been registered or filed earlier. When assessing whether a name can be registered or not, its spelling, pronunciation and the line of business it is used in will be taken into consideration by Trade Register. Thus when assessing the name, it is not spelling but meaning is taken into consideration.
Anything that may be interpreted as another person's last name or professional name, or the name of a protected literary or artistic work, may not be used as part of the business name without the appropriate consent. Protected national or international appellations or abbreviations of names may not be used as part of the business name without consent; and the business name may not be contrary to good practice or public order, or misleading to the public.
A limited liability company name must contain an indication of corporate form: the Finnish abbreviation ‘oy’ or the Swedish abbreviation ‘ab’ or the Finnish word ‘osakeyhtiö’ or the Swedish word ‘aktiebolag’.
Before the registration, there is no way to be totally sure if a company name can be registered. However, it is possible to study registered or pending company names in the NBPR's Virre Information Service or by using the Business Information System. One working day is more than enough to check whether the wished company name is already included to the databases or not yet.
On Start-up Notification Form Y1, two alternative company names may be given in addition to the company name reported for registration. If there is an obstacle to the registration of the proposed company name, the alternative company names will be examined in order of preference.
A limited liability company may use its business name in two or more languages. In this case each indication of the business name must be mentioned in the Articles of Association. Handling (registration) fee for each auxiliary name is EUR 75.
The Memorandum is similar to the Founders’ Agreement in the RF law and must always mention:
Memorandum of Association must be signed by all shareholders. Share subscription will take place through the signing of the Memorandum of Association. Memorandum must be submitted to the National Board of Patents and Registration in original.
The term of office and the responsibilities of management members and auditors start from the signing of the Memorandum.
The Articles of Association must be included or attached to the Memorandum.
The accounting period must be determined in the Memorandum of Association or in the Articles of Association.
The new Companies Act makes it possible to use a very short Articles of Association.
The Articles of Association must always include the following:
The line of business must be carefully drafted to clearly indicate the field in which the company operates and what kind of business the company runs, for example, repair and service of vehicles and vehicle trade. The line of business must be truthful, i.e. it must include all the fields in which the company is or will be active. However, the line of business should not be too extensive as it may make the company name registration procedure more difficult. The protection of the company name is ultimately determined by the company’s actual line of business.
If the limited liability company uses its business name in two or more languages, each indication of the business name must be mentioned in the Articles of Association.
As soon as the founder (the agent) is provided with all mentioned required information, the Memorandum and Articles of Association may be completed within one working day.
A bank account of a limited liability company must be opened, and the share capital of the company must be paid in cash or by bank transfer to the company's account in a Finnish bank or a foreign credit institution's branch office or to the corresponding account abroad before the company registration is completed. It is only possible to make payments from the account as soon as the company is fully registered, namely: after notifying the local tax authorities and representative of the Board at the Magistrate of the share capital and property tax payments.
When opening an account for a limited liability company, a person authorized for signing on behalf of the company must visit the bank in person and present minutes of the meeting or an extract of the minutes by the Board of Directors on the opening of the account and the persons authorized to use the account, as well as the required services (electronic funds transfer, Internet service, debit card, etc.). The right of the person in question to open the account on behalf of the corporation or the authorization granted him/her, must also be shown in the statement. The person’s foreign passport will be required to confirm his or her identity.
The bank may, at its discretion, require a letter of recommendation concerning the holder of the account from a correspondent bank or another bank it considers reliable. Banks are obligated by law to request a statement on the type of the customer's operations, the purpose of the account and the type and extent of the intended payment transfers, etc. If necessary, the bank may request a statement on the origin of the money deposited in the account from the customer.
The company’s bank account may be open within one working day.
The share capital need not be divided into several shares. One share is sufficient. When signing the Memorandum, a shareholder subscribes for the number of shares mentioned in the Memorandum. The subscription cannot be cancelled after all shares have been subscribed for, unless otherwise agreed.
The amount payable for the shares must be in the possession and under control of the limited liability company before completion of its registration.
The amounts paid in cash must be paid to the company's account in a Finnish deposit bank or a branch of a foreign credit institution in Finland entitled to accept deposits, or to a corresponding account located abroad. A document concerning the payment for shares, for example, a bank statement or an equivalent voucher given by a financial institution must be then submitted to the Tax Authority or representative of the Notional Board of Patents and Registration (Magistrate department) to have the company registration completed.
If, under the law or the articles of association, the company is obliged to elect an auditor, or subscription price of the shares is paid in full with other assets than cash (contribution in kind), a KHT or HTM auditor’s account of the value of the assets is sufficient.
For registration a limited liability company must file start-up notification form Y1 within three months after the signing of the Memorandum of Association otherwise it becomes void.
They must also complete the attachment form 1 for the trade register. The start-up notification form and the attachment form are delivered in original.
The following documents are to be attached the start-up notification form Y1:
Foreigners must submit as well:
The members of the Board of Directors are responsible for filing the start-up notification. The notification must be signed by a person responsible for the notification or someone authorized by such person, e.g. by the agent / representative. In the latter case, the notification must be attached with the original power of attorney.
The same Start-up notifications Y1 is used for notifying the tax administration registers which include the prepayment register, employer register and VAT register.
As soon as all the above documents are filed with the Notional Board of Patents and Registration, they will be considered within 6 working days, and the company will be included to the Register; what however does not mean that the company registration is completed.
The company will receive ID and a copy of the Articles of Association certified by the Notional Board necessary for opening a company’s account.
A limited company must have a representative who is entitled to receive notifications on behalf of the company. The representative must be domiciled in Finland and is entered in the Trade Register. If, however, the company has a member or a deputy member of the Board of Directors, a Managing Director, a person authorized to sign for the company, or a holder of procuration who has been notified to the Trade Register and is resident in the EEA, it is not necessary to elect a separate representative.
There are some trades in Finland which require licensing including the following:
Licenses are usually granted by the State Provincial Office of the area in which the business is established.
A copy of the license granted is attached to the trade register notification. If a license has not yet been granted, the applicant may file the basic declaration with the trade register and deliver a copy of the license to the trade register once the license has been granted.
Under the law both ways redomiciliation is allowed, but within the European Union.
No restriction or requirement in respect of a seal is specified under Finnish law.
A common way to close a limited liability company is by going into liquidation. The company must submit a notification to the Trade Register to close a limited liability company.
A limited liability company can be closed, i.e. dissolved, by going through any of the following procedures:
Going into liquidation by decision of the General Meeting. Liquidation often begins once the General Meeting has made a decision to that effect.
Liquidation of limited liability companies is regulated by Chapter 20 of the Limited Liability Companies Act. This guide does not describe the whole liquidation procedure but gives information about the most important Trade Register procedures relating to liquidation.
Deregistration, or liquidation by order of the authority. The registration authority, i.e. the National Board of Patents and Registration (NBPR), may order a limited liability company into liquidation or to be deregistered (Chapter 20, Section 4 of the Limited Liability Companies Act). The process may be initiated by filing an application or by the NBPR on its own initiative (Chapter 20, Section 6 of the Limited Liability Companies Act).
A limited liability company may be ordered into liquidation or to be deregistered on the following grounds:
The order must be issued, unless it is proved before the issue of the order that the grounds for it no longer exist.
An application concerning the liquidation or deregistration of the company may be filed by the Board of Directors, a member of the Board of Directors, the Managing Director, an auditor, a shareholder, a creditor or anyone whose rights may depend on appropriate registration or the placing of the company into liquidation.
Limited liability companies are principally dissolved by going into liquidation. They are not dissolved through deregistration – the assets of a deregistered company cannot, in most cases, be distributed without liquidation.
If business is interrupted for an unspecified or specified period, the interruption will not be entered in the Trade Register. Interruption of business however must be reported to the Tax Administration by using the amendment notification forms, as the interruption will be recorded in the Business Information System.
If it is decided to continue business later on, the Tax Administration must be reported thereof without delay to by using the amendment notification forms.
A limited liability company must have a Managing Director, if so decreed in the Articles of Association. Under the Finnish Companies Act, it is obligatory to appoint a Managing Director only for limited liability companies with a minimum share capital of EUR 80,000.
The Managing Director is (generally) appointed by the Board of Directors. The written consent of the Managing Director and Deputy Managing Director for the task shall be obtained prior to the appointment. The consent may be given as a separate document to be attached to the start-up notification. The consent must be dated and signed.
A director must be a physical person who can be a resident of the EEA or not.
A chairperson has to be elected if there is more than one ordinary member in the Board of Directors. A deputy member has to be elected if less than three ordinary members are elected to the Board of Directors.
If the share capital is less than EUR 80,000, the board may nevertheless consist of fewer than three members. At least one deputy must then be appointed.
In a company with a minimum share capital of EUR 80,000 the Managing Director may serve as the Board of Directors only when the company has a Supervisory Board.
One Ordinary (annual) General Meeting must be held in each accounting period, unless otherwise stipulated in the Articles of Association.
The company can have one or more shareholders. A shareholder may be a physical or legal person who can be a resident or a non-resident of the EEA.
When a legal person subscribes for shares, its name and Business ID must be stated in the Memorandum of Association. For foreign legal persons, a copy of a register extract and its Finnish translation certified by a notary public must be submitted with the notification.
If a foreign shareholder (physical person) does not have a Finnish personal identity code, his or her date of birth instead of the personal identity code must be stated, and a photocopy of his or her foreign passport or some other proof of identity must be enclosed if he or she has not been notified to the Trade Register before.
In regular businesses there are no restrictions based on the place of residence or domicile, or nationality, regarding the right to own shares. There are, however, some rare special situations which are governed by the Act on the Monitoring of Foreigners’ Corporate Acquisitions in Finland.
Under the Act foreign corporation may unrestrictedly acquire up to 100% of Finnish company shares. Such acquisitions need not any permission or consent by appropriate Finnish authority, unless it is not related to the most important companies. The most important company means a company with the annual turnover exceeding EUR 166,000,000, and more than one thousand persons on the payroll. Foreign business activity is generally regulated by the Bank of Finland and the Finnish Ministry of Trade and Industry. In particular, the Bank of Finland regulates notification of direct investments by foreign investors in Finnish projects, and by Finnish investors in foreign projects.
Information on beneficial owners is not subject to disclosure to anybody; the company may be requested to disclose information on beneficial owners only in case of criminal investigation.
No restriction or requirement in respect of a seal is specified under Finnish law. A company secretary may be a corporate body.
The share capital of a private limited company must be at least EUR 2,500 and that of a public limited company at least EUR 80,000. The subscription price in full is entered in the share capital.
No-par-value shares and bearer’s share are allowed.
The number of shares subscribed for by each shareholder must be stated in the Memorandum of Association. The period within which the shares must be paid must be so short that a basic notification can be submitted to the Trade Register within three months from the signing of the Memorandum of Association. The shares must be fully paid before completion of the registration.
A limited company that meets more than one of the following conditions in both the closing accounting period and in the accounting period preceding, must appointment an auditor:
1) the balance sheet total exceeds EUR 100,000;
2) net sales or corresponding earning exceed EUR 200,000; or
3) there are more than three employees on average.
If the Articles of Association do not contain any regulations on auditors, and no more than one of the conditions mentioned above are met, the company does not have an obligation to appoint an auditor.
The auditor or deputy auditor can be a person or a firm.
The auditor has to be an auditor authorized by the Central Chamber of Commerce of Finland, i.e. a KHT auditor; or an auditor authorized by a regional Chamber of Commerce in Finland, i.e. an HTM auditor; or an equivalent firm of auditors.
The Trade Register is a register for public use. Anyone is entitled to acquire some information recorded in the register.
Such information includes the company’s ID, location address or its post address, lines of business, information on financial statements submitted to the tax authority, and filed debt obligations of the company. When doing this, information on directors, shareholders and beneficiaries does not make part of the public file.
Through Virre Information Service, access can be received to companies’ registered details, e.g. Trade Register extracts. Basic details of businesses, such as the company name, Business ID, and contact details are free of charge; additional details and information products can be bought.
The Business Information System (BIS) offers information from the registers of the Trade Register and the Tax Administration free of charge. In BIS, the basic details of companies, such as company type, place of registered office, main line of business and whether a business has been registered at the Trade Register or in any of the registers run by the Tax Administration can be viewed.
The full price for a company establishment services includes its registration and first year service (to be paid in advance starting the registration date), set of documents and its delivery by courier
Price5 500 EUR
Data to be provided by a client include lines of activity, a name, number of shares, and address; this service includes two hours of consultation on the company management , including Compliance fee
Once-only incorporation fee
Price3 500 EUR
Including company representation when dealing with authorities, holding meetings of the Board of Directors and General meetings, and preparation of papers required, NOT including Compliance fee
DHL or TNT, at cost of a Courier Service
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Price1 500 EUR per month
Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)
simple company structure with only 1 physical person
additional compliance fee for legal entity in structure under GSL administration (per 1 entity)
additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)