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Form an Oy (Limited Liability Company) in Finland

Form an Oy (Limited Liability Company) in Finland

limited liability company in Finland, also known as osakeyhtiö (Oy), is the most usual form a small or medium-sized company can take. If you are interested in opening a limited liability company in Finland, you are welcome to get in touch with our company formation agents. They can help you with incorporating a limited liability company in Finland

Registration of an LLC in Finland

With the help of our incorporation agents, you can also set up a subsidiary in Finland in 2024 with only 1 shareholder and 2 directors. The name chosen by the LLC must not be already in use by another Finnish legal organization. To assist applicants in choosing a distinctive company name, the government maintains a website listing all registered company and corporation names. Our company incorporation agents in Finland can help you choose an appropriate name as per required by the rules. Any LLC must finish its firm name with either the letters “Oy” or “LLC.”

In Finland, setting up a limited liability company is covered by the Companies Act, fully reformed in 2006. The minimum share capital of EUR 2,500 has been eliminated since 2019. An LLC should be audited if it fulfills at least two out of these three requirements:  has three employees, annual turnover is EUR 200,000 and assets are over EUR 100,000. To establish an Oy in Finland, a Memorandum of Association (MOA) must be developed and signed. This Memorandum includes: 

  • the date of the Memorandum;
  • information regarding the Management Board;
  • the auditors;
  • the shareholders;
  • the shares;
  • the price of the shares;
  • the payment term of the shares.

Also next to the Memorandum of Association, the entrepreneur must enclose: 

  • the name of the company;
  • the domicile and the type of business. 

These are all included in the Articles of Association (AOA). Within three months after signing the Memorandum, the company must be enrolled in the Trade Register; otherwise, the setting up of the company expires. For more information about time limitations, you can get guidance from our agents. Or you can directly get incorporation services from our agents if you want to start a company in Finland. With the help of our agents, you will be able to file the correct documents before the expiry of the filing date. Consult with our company formation consultants for their available services. 

OY or limited liability company is a great business structure for foreigners in Finland. Once this entity is registered with the Trade Register in Finland, the business owner, through his/her local representative must inform the above-mentioned authority about any changes that might occur, in matters of business registration and/or operations.

Documents required to open an LLC in Finland 

Please find below the list of documents that you are required to submit for opening an LLC in Finland:

  • a copy of the Articles of Association (AOA);
  • original Memorandum of Association for the LLC, executed by the shareholders;
  • a declaration by the managing director and the board of directors confirming that the Limited Liability Companies Act was followed during the setting up of the company;
  • confirmation of payment of the registration fee receipt.

An auditor’s certificate stating that the conditions of the Limited Liability Companies Act requiring the payment for shares before registration has been adhered to if an auditor is needed by law or by the articles of association. To get information about the requirement of an auditor, you are welcome to get in touch with our company formation experts. They can explain to you what to do if an auditor is a requirement by law. However, you must include another document proving the payment of the shares must be filed if an auditor is not necessary, such as:

  • an auditor’s certificate, if the firm has designated an auditor; 
  • an auditor’s certificate from any licensed auditor, attesting to the transfer of assets; 
  • an account statement, or a comparable document, issued by a financial institution, attesting to the payment.

If you are going to set up a limited liability company in Finland and you have concerns about filing the right paperwork, you can get help from our Finnish agents. They can compile all the required documents for you. This assistance prevents you from wasting any time and you will be able to incorporate a company much faster. Here is a video presentation we have prepared on this subject:

Members of a Finnish limited liability company

Limited Liability Company in Finland can be formed by one or more legal persons. All the shareholders have equal rights in the company except in the case when the difference it’s stipulated in the Memorandum of Association. An Oy in Finland must have a Board of Directors (according to the Companies Act), elected by the General Meeting of Shareholders. The Board of Directors must include one or two common members and at least one adjunct. He/she is responsible for the administration and the suitable disposal of the operations as well as for the proper monitoring of the accountancy and the check of the financial issues of the company.

Also, a managing director, named by the Board of Directors must be invested. In matters which belong to his/her tasks, he/she has the right to represent the company. Furthermore, the managing director has to see if the accountancy and financial issues are being handled reliably. Extended or unusual acts (considering the scope and the kind of the company’s transactions) may be taken by the managing director only when he is authorized by the Board of Directors. Also, an external audit can be requested by a shareholder, at an Ordinary General Meeting or at a General Meeting where the matter is according to the notice to be approached. The special auditor can be an individual or an audit firm.

Benefits of incorporating an LLC in Finland in 2024

If you want to set up a limited liability company in Finland, you are recommended to get assistance from our company incorporation consultants. They can provide you with a detailed list of possible advantages you can get by opening a limited liability company in this country. However, these potential advantages can be attained by starting a Finnish Limited Liability Company (LLC):

  • 100% Foreign Ownership: in an LLC, foreigners are permitted to hold all shares;
  • Limited liability: the owner’s liability is limited to the value of the shares he/she owns;
  • one member/manager: to incorporate an LLC, just one member (who may be a foreign national) is needed, and he/she may also serve as the only manager;
  • no minimum share capital since 2019;
  • no language barrier: although it is not the official language of Finland, still many Finnish individuals speak English. This factor can help reduce the language barrier to a large extent. 

If you need additional information about the other advantages you can get by opening a limited liability company in Finland, you are advised to consult with our agents. They can provide you with lots of reasons why you should set up a limited liability company in Finland. In addition to this, our company incorporation agents can also assist you if you want to open a branch office in this country.

There is no need for a special business permit for board members of limited liability companies in Finland, if they are EU/EEA residents. In case there is no Finnish identification card, a copy of the passport of the founding member is solicited. In some cases, translation into Finnish or Swedish is needed for such a document.

Corporate taxes in Finland

The Tax Administration has released its official decision on the valuation of employer-provided benefits. Whenever you plan to open a company abroad, it is crucial to understand its tax structure. It is always recommended to get assistance with taxes from local agents. They can guide you better due to their in-depth understanding of taxation. You can get in touch with our local agents in Finland, they can help you comply well with the tax obligations. However, you can also find below a general guide about taxes on a limited liability company in Finland:

  • Finnish LLCs are required to pay tax in Finland on their domestic and foreign income;
  • The VAT (value-added tax) is payable when products and services are sold through commercial activities in Finland.
  • Excise duties are indirect taxes imposed on the use or consumption of specific goods, such as alcoholic beverages and drinkware, desserts, ice cream, soft drinks, electricity, fuels, tobacco, and, waste, etc.
  • Limited liability firms have a flat tax rate of 20% applied to their earnings;

In Finland, OY cannot be informally shut, as there are different procedures to implement. For instance, the company ceases its activities after a liquidation procedure, which might take a few months. All the procedures, in the case you want to open an OY or set up a new business structure can be explained by one of our local representatives in Finland. For legal understanding, you are welcome to contact our agents in Finland. You can open a limited liability company in Finland in 2024 without facing unnecessary delays.

Furthermore, you can also rely on the services of our experts if you need a virtual office in Finland.