REGISTRATION OF COMPANY IN FINLAND
- Finland is a state in Northern Europe with a population of about 5.5 million people. Finland shares borders with Russia, Sweden, Norway, and Estonia. The area of the state with water and land territories is about 340 thousand km2.
- Despite the fact that Finnish and Swedish are official languages in Finland, Finns mostly speak English.
- Finland is a member of the EU. The capital is Helsinki.
- The monetary unit is the euro
- Finland is an easy place to do business, for foreign companies and entrepreneurs alike. Plenty of assistance is available, and over 6,500 Finnish businesses have been established by people who have moved from abroad.
- You will need to arrange to fund, make a business plan, select your company form, obtain any required trade-specific permits, register your business, arrange the necessary insurance, and organize your accounting
- Establishing a company in Finland has never been easier. From July 1st, 2019 the share capital requirement for a Finnish company is 0€, which makes establishing a company really easy as there is no need to travel to Finland, apply for a start-up account in a bank nor requirement to pay in share capital.
- Company formation in our Company Formation Portal takes around 20 minutes. It requires you to create an account and fill in information about your company. The process is fully online and you can order all additional services with a few clicks – banking solutions, tax registrations, insurance, accounting, address service.
4 QUICK STEPS TO SET UP A BUSINESS IN FINLAND
- Select a name for your company. To gain exclusive rights to the name, you should submit it to the Trade Register which is maintained by the Finnish Patent and Registration Office (PRH).
- Open a bank account for your business. The company requires a bank account to pay share capital, process payment transactions, and support accounting.
- File a start of the business notification. Establishing and registering a business requires that a notification be filed with the Trade Register and various Tax Administration registers. This can be done easily using a single form ("Y form").
- Take advantage of online tools. You can establish a limited liability company online through the Business Information System online service. You can also create a workspace at My Enterprise Finland. The My Enterprise Finland service gives you access to a wealth of useful services. These online services require you to log in with your online banking credentials.
Important information:
- In order to start a business in Finland, you have to apply for tax registrations.
- Finnish limited liability company must have at least one member of the management board and one deputy member. At least one of the management board members and one of the deputy members must be residents of the European Economic Area.
- Having a legal address is mandatory for every Finnish company. The legal address will be shown in the business registry and all the official letters will be sent to this address.
- Every company registered in Finland has to submit an annual report. If a company has monthly transactions, invoices, and VAT numbers, it’s also mandatory to submit monthly declarations. If you don’t have time or resources to do this yourself, you can order our accounting service.
FORMS OF DOING BUSINESS IN FINLAND
You can use the enterprise in one of the following forms for business registration in Finland:
· either a self-employed person or sole proprietor;
· general partnership;
· limited partnership;
· joint-stock company;
· cooperative;
· corporation.
Currently, according to the laws of Finland, the person who does not permanently reside in any of the EU countries can act as the entrepreneur, the participant of a general or limited partnership, the founder of a joint-stock company exclusively upon the permission of the Ministry of Trade and Industry of Finland.
Today, the most prevalent form of doing business in Finland is a joint-stock company (oy)
Registering a joint-stock company in Finland
- The founders of the "Oy" company can be natural and/or legal persons, not excluding foreigners. There is no necessity in drawing up the Charters, it is sufficient to fill in the standard forms.
- Minimum authorized capital equals to EUR 2500. After registration of the company, the whole amount should be paid. After that, the resources from the statutory fund can be spent on the needs of the company (expenditures for hotels, business trips, etc.). You can draw out almost the entire amount, about $ 500-700 should remain on the account to maintain a favorable balance.
- The system of governing bodies is the managing board in the form of the Board of Directors. At the same time, the position of the General Director is not obligatory. And the number of participants on the board is not limited.
- It is necessary to register a company in Finland in the trade register (that is located in the main patent and registration office).
- When submitting documents, the owner of the enterprise can obtain a registration certificate (Diaaritodistus) with the registration number. Such document substitutes the certificate on registration of the company in Finland, and bank account can be opened and other actions stipulated by the legislation can be performed in virtue of it. A separate fee will be charged for the registration of the subsidiary name of the company, and it can reflect one of the directions of the company's activities.
- The entrepreneur and the company shall be registered with the tax office. To this end, it is necessary to fill in and submit to the tax office (at the place of residence or company registration) the form with notice of the commencement of activities.
- In order to establish a representative office or branch without obtaining the status of a legal entity, it is needed to receive a special permit, and submit it to the Main Department of Patents and Registrations with the application regarding registration.
- When acquiring a block of shares of the company or the entire company, it is necessary to file a request for the registration of the deal. This shall take one month from the moment of its conclusion. The Ministry can come up with a negative response (if, for example, the transaction contradicts public policy, etc.), then the matter can be referred for consideration by the state council, and the deal can subsequently be terminated.
Pay attention that there are almost no facts of a smashup of business and winding-up of industrial enterprises in Finland. The state supports employers in order to protect employees.
SETTING UP A LIMITED COMPANY
A limited company can be established by one or more natural or legal persons (founders). At least one of the founders shall be a permanent resident or, if the founder is a legal person, have their domicile in the European Economic Area – unless the National Board of Patents and Registration grants an exemption from this rule. The nationality of the founder is thus irrelevant. A legal person shall have their domicile in the European Economic Area when it has been established in accordance with the laws of a State which belongs to the European Economic Area and when its registered office, central administration, or head office is in a state belonging to the European Economic Area. A person who is legally incompetent or declared bankrupt may not act like a founder.
If a permit is required, the application is to be submitted to the National Board of Patents and Registrations either in Finnish or in Swedish. An application fee (EUR 120) is paid for each permit decision.
A public limited company shall have a minimum share capital of EUR 80,000 (Until 30th June 2019 a minimum share capital of EUR 2,500 was also required from a private limited company, now capital is not required). The share capital must be paid to the company's account in full before the company can be entered in the Trade Register which is maintained by the National Board of Patents and Registration.
New businesses submit the basic declaration to the Trade Register using the start-up notification form. This form can also be used for registration with the Tax Administration, registration of a VAT liable business, registration as an employer, and registration in the tax prepayment register.
SETTING UP A BRANCH OF A FOREIGN TRADER
A branch refers to a part of a foreign organization or foundation that conducts continuous business or professional activities in Finland from a permanent place of business in Finland in the name of and on behalf of a foreign organization or foundation.
The trade name of a branch of a foreign entrepreneur established in Finland shall contain the trade name of the foreign entrepreneur with an addition to the name which indicates that it is a branch – e.g. CDE Cargo Ltd., a branch of Finland.
Opening a Finnish Corporate Bank Account
Opening an account for your company is generally quite simple. Following are the documents typically required, but due to variances between banks, you should confirm prior to your meeting. You may need to book an appointment in advance.
1. Extract from the Trade Register (no older than three months). If the company has not yet been registered, the extract from the Trade Register can be replaced by:
- a registration certificate indicating that a declaration of establishment has been submitted
- documents of incorporation (for example for a limited company, memorandum of association, articles of association, and the minutes of the constitutive meeting of shareholders)
2. An extract from the minutes of the company's decision-making body, which indicates the names of those officials of the company authorized to use the account and their authorizations, the decision to open an account, possible lending, and submitting of collateral
3. An account of incoming and outgoing payments; their volume and the size of individual payments
4. An account of the company's operations (more detailed than the official line of business clause)
5. Other accounts (e.g. information on companies having shareholdings in the company etc.)
The required documents and information can be submitted either in Finnish, Swedish, or English.
Registration of the General Partnership
This form is suitable if several people are actively involved in business and conduct commercial activities. At the same time, it is important that the partners have confidence in each other.
In order to establish a partnership, the participation of at least two persons, either natural or legal ones, is required.
The constituent document is the agreement on the foundation of the partnership. It is drawn up in writing.
The following is recommended to be included in the agreement:
- name of the partnership;
- its location;
- sphere of activity;
- information about partners (the number of their contributions, the right to sign on behalf of the company, the allocation of responsibilities);
- reporting period and audit;
- principle of distribution of profits and losses;
- termination procedure and means of changing the constituent agreement and other issues.
Partners of the general partnership, in the absence of residence in the EU countries, are required to obtain permission from the Ministry of Trade and Industry. However, the partnership shall have an indwelling representative in Finland. The partners are responsible for the obligations of the partnership also with their personal property.