How to start a business in Finland - company formation, taxes & VAT

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Finland's economic stability and high-tech industrial base has made it a key target for international investors. Anyone can set up a limited company in Finland, irrespective of nationality, so long as one of the company's founding members is resident in the European Economic Area (the EEA compromises all the EU countries plus Iceland, Liechtenstein, Norway and Switzerland). Finland is among the most welcoming countries for foreign investors in the North of Europe.

What is the most common type of company in Finland?

The two most popular forms of business entity in Finland are:

  • public limited company - osakeyhtiö Oyj
  • private limited company – osakeyhtiö Oy

Requirements for a private limited company (Oy)

  • The minimum share capital for a private limited company (Oy) is €2,500.        
  • The company needs to have its share capital deposited in a Finnish bank account or a branch of a foreign bank in Finland. It's ultimately up to the auditor who must verify that the funds are deposited in a way that fulfils the requirements of the law.
  • There needs to be at least 2 directors (one has to be an EU resident). For each non-EU director you need an EU director. If you appoint a managing director they need to be an EU resident.
  • There is a statutory requirement for audited accounts only if the company has a turnover of more than €200,000, a balance sheet total of more than €100,000 and 3 or more employees.
  • A registered office is sufficient

Requirements for a public limited company (Oyj)

  • The minimum share capital to establish a public limited company (Oyj) is €80,000.
  • A minimum of three board directors is required plus a chief executive
  • It is usual to be listed in the Helsinki Stock Exchange
  • There is a statutory requirement for audited accounts

What other types of company are there?

  • general or limited partnership
  • small private company, usually sole trader
  • branch of a foreign company

How easy is it to recruit staff?

Finland has one of the most advanced education systems in the world, and the workforce is highly skilled. It is worth noting that there are important labour regulations regarding employment contracts and so professional advice will be needed. We can also help you with general recruitment issues so give us a call or email us directly with any questions on employment, staff and recruitment.

What is the regulatory environment like?

Although the business environment in Finland is liberal and investor-friendly, the regulatory environment is strict and any breach of the legal or tax code is taken very seriously. For this reason it is particularly important to seek expert advice from the outset.

To learn more about our local team of legal and financial specialists in Finland, or to discuss any other issues regarding company incorporation in Finland, including taxes or VAT, please contact us by calling 0033 (0)1 53 57 49 10 or emailing us from our contact page and we'll be happy to help.