The first thing one should do in establishing a company is to select the type of companies in Finland he/she wants to develop. It is advisable to do your research and get professional guidance to help you choose the best from various company types in Finland. Partnerships, private entrepreneurs, co-operatives, and limited companies are among the various types of companies in Finland. If you want to start a business in Finland, you can get in touch with our expert team members.
| Quick Facts | |
|---|---|
| Types of companies/entities available in Finland |
– limited liability company, – general and limited partnership, – proprietorship, – public limited company, – cooperative, – branch |
|
The most common type of structure in Finland |
Limited liability company (osakeyhtiö or Oy) |
|
Legislation |
Company Law in Finland |
| Minimum share capital for LLC | Not required |
| Minimum share capital for public limited company in Finland |
EUR 20,000 |
| Legal representative required |
Not an obligation, but recommended |
| The most important document for company formation in Finland |
Articles of Association |
| Can you open a liaison office in Finland ? (YES/NO) |
YES |
| Shelf companies available in Finland (YES/NO) |
YES |
| Institution in charge of company registration in Finland | Finnish Trade Register |
| Branch incorporation in Finland |
Requires a fixed location and a declaration for opening such structure in Finland, issued by the parent company |
| Tax registration required (YES/NO) |
YES |
| Business license needed in Finland |
According to the business activities. Our Finnish agents can help with the procedures. |
| Accounting services for companies in Finland |
We provide complete accounting services as soon as the company is registered. |
| How can our local Finnish agents help you? |
We offer assistance for: – documents preparation, – tax registration, – opening a bank account, – appoiting a representative, etc. |
| Formalities for the incorporation of LLCs in Finland |
– minimum 1 shareholder, – business address, – business name verification and reservation, – established local bank account, – tax registration, etc. |
|
Features of joint stock companies |
– can be registered with EUR 2,500 as minimum share capital, – founders can be natural and/or legal persons, – must have a board of directors, – can be incorporated with the Finnish Trade Register |
|
Can limited or general partneships be registered in Finland? |
Yes, under a partnership agreement |
| Board of directors for a company in Finland | Formed by at least 3 directors |
| Best use for branches |
For activities in sectors like banking, insurances, financial services, etc. |
| Best use for subsidiaries |
Great choices for foreigners wanting to operate in domains like: IT, insurance, banking, retail, manufacturing, etc. |
| Requirements for directors of public companies in Finland |
At least 50% of the directors must have residence in EEA countries |
| Annual turnover for LLC audits |
More than EUR 200,000 |
| Registration formalities for sole traders in Finland |
A simplified form of business that allows anyone to operate under his/her name, requires a license, must be registered for taxation |
| Time frame for opening an LLC in Finland | A few days or weeks, depending on the paperwork and procedures |
| Minimum number of shareholders required for an LLC in Finland |
1 is sufficient |
| Company secretary required for businesses in Finland (YES/NO) |
NO |
| Resident director required for LLCs in Finland (YES/NO) |
YES |
| VAT in Finland |
24%. Lower rates apply on different categories of products and services |
| Corporate tax rate in Finland | 20% |
Table of Contents
Main types of companies in Finland
If you want to set up a company in Finland it is recommended to discover the available structures in this country. The following types of companies can be selected by both local and foreign entrepreneurs who want to do business in Finland.
Private Person Carrying on Trade (yksityinen elinkeinonharjoittaja): A private trader is an entrepreneur member of EEA (European Economic Area) who establishes a company in Finland. It is responsible for paying the taxes, and it is free to withhold profit;
Partnership in Finland (avoin yhtiö-Ay): It comprises at least two members (one of them must be an EEA resident). The profits are divided among the partners according to their shares (except when the partnership agreement mentions something else). There is no initial share capital required;
Limited Partnership in Finland (kommandiittiyhtiö-Ky): It must have at least two partners; one must be the general partner, and the other is a silent partner. The general one has the right to contribute to the management’s decisions and ask for profit, unlike the limited one. The silent one has no decisional power and also does not absorb the losses;
Limited Company in Finland (osakeyhtiö-Oy): This structure has the following attributes:
- The minimum share capital requirement has been abolished
- A person is sufficient to start a company in Finland;
- The management board provides the management;
- It must be recorded at the Trade Register before beginning an activity.
Public Limited Company in Finland (julkinen osakeyhtiö-Oyj): It is founded after registration in the Trade Register. It must have a share capital of 80.000 euros (cash or property). The company must have at least one shareholder. If the company has a share capital above 80.000 euros, the management board must have more than three members (more than 50% of them must be EEA residents) and a managing director. An Oyj company structure must also provide semi-annual reports and be listed on the Helsinki Stock Exchange. The essential difference between a Limited and a Public company is that only the Public Limited Company can trade or transfer the shares. They are governed by the Companies Act (Osakeyhtiölaki, 21.7.2006/624);
Branch of a Foreign Company in Finland (sivuliike): It is a society that operates in Finland even though it has its headquarters in another country. The branch’s representative must have a Finnish domicile, and if it is not an EEA member, special permission must be granted by National Board of Patents and Registration (NBPR);
Private entrepreneurs (toiminimi): A private entrepreneur-style business is the most straightforward method to establish your business in Finland. It permits you to obtain an ID for your company and bill customers without a lot of expense or effort. They are simple to operate and require minimal documentation compared with other businesses. Among various types of companies in Finland, it is ideal for small-sized companies that do not need a lot of traveling, investment, or even multiple employees. One possible drawback is that any loans you take for financing company types in Finland have to be done in your name and not under the business. If you borrow money and cannot repay the loan, you will have to declare bankruptcy on your own;
General Partnership (Avoin Yhtio, AY): The General Partnership must be formed by two persons who start a business by signing a partnership contract. This company structure benefits those entrepreneurs who do not have a minimum required capital, and the partners are all equal throughout the business’s activities. The major drawback is that every partner is responsible individually and indefinitely for all obligations to the company, decisions, and liabilities;
Co-operative (osuuskunta): The term “co-operative” can be described as a type of business owned by its members. It is a good choice for a collaborative company, a group of individuals who wish to work for themselves but do not want to set up the business as an individual, such as the artists or massage therapists. The Board of Directors, selected by co-operative members, establishes the rules and guidelines. A General Meeting/Board of Representatives manages the administrative tasks. The co-operative form of company can also hire an accountant to take charge of member’s finances. Among various types of companies in Finland, this business structure has more than five thousand diverse industries;
Ltd company (o sakeyhtio): The limited-company structure is a great option to organize your business if you intend to invest large amounts of money, are planning to employ staff, or expect to make a high profit. It is also a great option to limit the risk and cut down on the tax burden. Having a limited company can pay dividends to shareholders and yourself with a lower tax rate than the income tax. You can easily establish a limited type of company in Finland by letting our local agents help you with the formalities.
If you decide to do it yourself, you must name an additional member. It is also necessary to put aside enough funds to cover the initial expenses. The Finnish government provides many starting grants to aid you in your endeavor. Establishing a limited company type in Finland is a lengthy process that requires lots of paperwork. Therefore, it is advisable to seek advice from a professional and reliable entity. So, for company formation in Finland, you are welcome to interact with our experts. Our company incorporation experts in Finland can help you with assistance in the whole process. You can also read the following infographic with details about the available types of companies in Finland:
Setting up a subsidiary in Finland
To set up a subsidiary in Finland, please follow these steps:
- Select which company type in Finland you can establish appropriate to what you want to achieve with your company and your objectives. The most popular choice for foreign companies to set up subsidiary companies is a private limited liability company. Other options include the public limited liability company, general partnership, limited partnership, or the chance of a branch office;
- Select a name for your company exclusive to Finland and contain the suffix ‘oy’ to indicate the private liability corporation;
- It does not need a share capital. If the share capital is present, pay the money before the registration;
- Make the incorporation documentation, including Memorandum of Association, Articles of Association, and Trade Register Notification. The fees for essential statutory documents vary between 2,500 and 4,500 euros. Trade Register registration fee is around 380 euros;
- Must submit documents for the Trade Register and Central Tax Administration. The papers should be in Finnish as well as Swedish;
- Alongside the Trade Register, companies must be enrolled in various Registers in the Tax Administration, including the VAT Register, Pre-Payment Register, Employer Register, and the Social Insurance Institution.
Besides a subsidiary, if you want to open a branch in Finland, you can get in touch with our company formation experts in this country. hey can help you set up a company in Finland, and with their assistance, you can have your business up and running in no time. You do not need to worry about the incorporation procedure. Just get in touch with our company formation agents, and they can help you get all relevant permits and licenses. With these permissions, your business will not face any sanctions or legal inconsistencies in Finland.
Here is a video presentation about the types of companies available in Finland:
Some of the procedures for company incorporation in Finland
If you want to open a company in Finland, you must consider the procedures for registering a company in this country:
- A foreign or local entrepreneur must first choose the business structure in Finland. The size of the business and the activities to be carried out are taken into account. Our Finnish company formation agents can guide you in choosing the best options for the company you are about to establish.
- Choose the name of the company and check its validity with the local authorities. Unique names are accepted, and once valid they can be registered.
- Articles of Association, the most important set of documents for opening a company in Finland, are drawn up. These must include information about activities, management, purposes, structure, shareholders, etc.
- Next comes the opening of a bank account for depositing minimum share capital and the following financial operations of the company in Finland.
- Depending on the activities, apply for the required business licenses and permits in Finland.
- The company must be registered with the Finnish Patent and Registration Office. This can also be done online, and one of our specialists in company formation in Finland can help you.
- Another important step in the incorporation of a company in Finland is its registration for the payment of taxes. A tax ID linked to the company in question is issued.
These are some of the steps for setting up a company in Finland. We specify that one of our representatives can guide and help you with a view to an uncomplicated registration. We are here to offer you specialized support so that business can start as soon as possible.
Necessary documents for company formation in Finland
In addition to the Articles of Association, other documents are required in order to establish a business in Finland. For example, a document is drawn up with the names and addresses of shareholders of the respective firm, as well as another with information about the board of managers.
It is not mandatory, but it is recommended to present a business plan with information about the company to be registered, economic forecast, objectives, etc. ID documents of shareholders and managers as well as proof of business address are other documents required by the Finnish Trade Register when a company is established. It is important to specify in this case that the documents must be translated into Finnish or Swedish before being presented to the authorities. We advise you to do legal translation and certification before starting the process of registering a company in Finland.
Why invest in Finland?
Stability in the business climate and security are two of the most important aspects to be taken into account when choosing Finland as a business destination. With a stable political environment and strong economy, Finland is even one of the least corrupt countries in the world, which gives confidence to foreign investors. On the other hand, there are a multitude of business options and a huge potential for those who want to generate large profits in Finland. Connections with major financial centers in the world are other important benefits when choosing Finland for business development. Recently, Finland was declared the happiest country in the world for the 7th consecutive year.
Setting up a company in Finland vs. in Denmark
Businessmen interested in extending their businesses in another Nordic country, for example in Denmark , may find useful this short comparison on starting a company in Finland vs. Denmark.
Main incorporation aspects in Finland
- Time frame for the incorporation: 4-6 weeks;
- Minimum share capital for LLC: no minimum share capital;
- Standard corporate tax rate: 20%.
Main incorporation aspects in Denmark
- Time frame for the incorporation: approx. 4 working days;
- Minimum share capital for LLC: DKK 40,000;
- Standard corporate tax rate: 22%.
If you want to know more about the aspects of setting up a company in Denmark, our partners from CompanyFormationDenmark.com can help you.
Company statistics in Finland
Please find below the company statistics by type in Finland:
- The services sector has the most firms registered in Finland, with around 176,693 companies.
- Finance, insurance, and real estate have about 153,021 companies.
- Agriculture, forestry, and fishing have more than 93,211 companies registered in Finland.
Contact our expert team members if you want to register a company in Finland. Our expert team members can provide you with comprehensive assistance in this regard.