If you plan to start a business in Europe, Finland is an excellent choice for registering your company. 

The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Finland, and is ready to share its results and help you choose the right jurisdiction. 

What are the main advantages of incorporating a company (business) in Finland?

1.Promising location and strong international cooperation

Finland has a strategically advantageous location at the crossroads between Western Europe and Scandinavia, providing businesses with convenient access to markets in both regions. As a member of the European Union, Finland offers companies the free movement of goods, services, and capital within the single European market, which opens up significant export opportunities.

2. Stable economy and transparent legal system

Finland is known for having one of the most stable economies in the world, making it attractive for long-term investments. Political stability, supported by an effective management system, ensures predictability in decision-making and minimizes business risks. The low level of corruption combined with high transparency standards provides fair conditions for conducting business, particularly for foreign companies.

3. Favorable tax system

Finland offers a favorable corporate tax rate of 20% within the European Union, making it attractive for foreign investors and companies looking to reduce their tax burden. Additionally, the country’s tax legislation is transparent and predictable, allowing businesses to plan their financial operations with minimal risk. Finland also provides various tax incentives for innovative companies and startups, which promotes the development of new technologies and entrepreneurship.

4. Highly skilled workers

The country has one of the strongest educational systems in the world, ensuring the training of highly skilled professionals in various fields, including technology, engineering, IT, and scientific research. There is a strong emphasis on practical skills and innovation, enabling workers to quickly adapt to new challenges and implement modern solutions in business. Additionally, many Finnish professionals are fluent in English, facilitating collaboration with international companies and investors.

5. Innovative environment

The country fosters a favorable innovation environment through active government support, offering numerous funding programs, subsidies, and grants for startups and technology companies. This promotes the rapid development of innovative products and attracts investors to the Finnish technology ecosystem.

6. High quality of life

Finland is renowned for its high quality of life, which includes a robust healthcare system, advanced education, and a clean environment. Social guarantees, a balanced work-life ratio, and a low crime rate make the country attractive to residents and international professionals. The high quality of life also contributes to increased employee productivity, as people work in comfortable conditions and feel secure.

How to register a company in Finland and what are the main requirements for such registration?

Step 1. Initial setup

• Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process
• Preparation and filing of the package of documents

Step 2. Company registration

• Choosing and reserving a company name with the Finnish Trade Register at Finnish Patent and Registration Office
• Preparation of the company’s founding documents
• Opening a bank account for the company (it is activated when the company is registered in the Finnish Trade Register)
• Registration of the company with the Finnish Trade Register
• Obtaining the Certificate of incorporation, Memorandum and Articles of Association
• Registration for tax and social security purposes

Requirements for registering a company in Finland on the example of a Limited Liability Company (LLC) / Osakeyhtiö (Oy):

• Shareholders: the company must have minimum 1 shareholder.
• Director: the company is required to have at least 1 director. The director and the owner can be the same person and there are no restrictions on the person’s country of residence. In addition, the company must appoint at least one representative. The director and deputy director must be individuals, and must also be shareholders of the company.
• Company secretary: no requirement.
• Minimum share capital: there is no requirement to the amount of share capital.
• Legal address: the company must have a registration address in Finland.
• Liability: the liability of shareholders is restricted to the amount of their investments.
• Accounting: financial statements (profit and loss account, balance sheet and notes to the accounts) should be filed with the Trade Register annually.

What do you have to know about taxes when registering a company in Finland?

Corporate income tax (CIT):

• The standard rate is 20%.
• The deadline for filing CIT returns is typically by the end of the fourth month after the fiscal year-end.
• The Finnish Tax Administration provides an online platform for returns, ensuring a streamlined and efficient filing process.
• Tax credits and incentives – the research and development (R&D) tax credit and for investments in startup companies.

Personal income tax (PIT):

• The rates are as follows:
  • €0 – €20,500 – 12.64%
  • €20,500 – €30,500 – 19%
  • €30,500 – €50,400 – 30.25%
  • €50,400 – €88,200 – 34%
  • €88,200 – €150,000 – 42%
  • over €150,000 – 44%
• Municipal tax is charged at a flat rate on taxable income determined for municipal taxation. The rate varies from 4.4% to 10.8% depending on the municipality.

Value-added tax (VAT):

• The standard rate is 24%.
• The reduced rates are 14% (foodstuffs, restaurants) and 10% (for public transportation and cultural events).
• Companies must register for VAT if their annual sales exceed €15,000.

For readers 

Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Finland. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions. 

By choosing our company formation service in Finland, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Finland and pave the way for your business success!

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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.