Company Registration in Finland in 2023-24
Finland is a member of the European Union, which provides access to a larger market and the ability to easily conduct business with other EU countries. Finland has a highly educated workforce and a strong tradition of innovation, making it an attractive location for high-tech industries.
Finland’s services sector is booming, with significant revenue, and its services sector accounts for more than 60% of government revenue. Finland’s main sources of income are paper export, software products, and forestry products.
In this article, we will be going to discuss more briefly the process to register a company in Finland and the various documents that are required for company registration in Finland. So, without any more delay, let’s dive deep into Finland company registration.
Why register a company in Finland?
There are several reasons why one might choose to register a company in Finland, some of these include:
- Finland has a stable and transparent legal system, which can provide a secure environment for doing business.
- The Finnish government has a pro-business attitude and offers various incentives for companies to operate in the country.
- Finland has a highly educated workforce and a strong tradition of innovation, making it an attractive location for high-tech industries.
- Being a member of the European Union gives Finland access to a sizable market and makes doing business with other EU nations simple.
The Finnish taxation system is relatively low and straightforward, which can be beneficial for companies.
Procedure for Finland Company Registration
The procedure for company registration in Finland typically involves the following steps:
Step 1:- One of the first steps that an entrepreneur must take is to choose the type of company they wish to register. Our experts at OnDemand International can help you in selecting the most suitable form of business based on your business needs and preferences.
Step 2:- Choose a company name and check its availability, however, the name must be unique and cannot be misleading or offensive.
Step 3:- Prepare the articles of association, which are legal documents outlining the company’s purpose, ownership structure, and management.
Step 4:- Obtain any necessary licenses or permits for your business.
Step 5:- Register the firm with the Trade Register protected by the Finnish Patent and Registration Office (PRH). This procedure can be accomplished online or through a paper application.
Step 6:- Provide the PRH with the necessary information, such as the company name, articles of association, and the names and addresses of the shareholders and directors.
Step 7:- Finally, Register your company with the Finnish Tax Administration, and obtain a VAT number if you are planning to do B2B transactions.
Documents Required for Company Registration in Finland
The documents required for company registration in Finland vary depending on the type of company and its ownership structure.
Generally, the following documents are required for company registration in Finland:
- The Articles of Association: This is a legal document outlining the company’s purpose, ownership structure, and management.
- Shareholder’s List: A catalog of the firm’s stakeholders, including their names and addresses.
- Board of Directors: The names and addresses of the company’s board of directors.
- Business Plan: A document outlining the company’s business plan, containing details on its commodities or services, target market, and economic forecasts.
- Proof of Address: An authorized report, such as an electric bill or rental agreement, showing the company’s business address.
- ID documents of shareholders and directors.
- Any necessary licenses or permits for your business.
- Proof of payment of the registration fee
It is important to note that the language used for all the documents has to be in Finnish or Swedish, if not then you have to provide a translated version of the documents and get them certified.
Types of Business Entities for Company Registration in Finland
There are various forms of business structure that can be registered for company registration in Finland, including:
Limited Liability Company (Osakeyhtiö, Oy)
This is the most common type of business entity in Finland, and it is suitable for tiny and medium-range companies. Stakeholders are only accountable for the firm’s debts up to the amount of their share capital.
Cooperative (Osuuskunta, Osk)
This type of entity is owned and controlled by its members, who share in the profits and losses of the business. This type of entity is suitable for businesses where the members have a common interest and work together.
Public Limited Company (Julkinen Osakeyhtiö, Oyj)
This type of entity is typically used by larger companies that are publicly traded. Stakeholders are only accountable for the firm’s debts up to the proportion of their share capital.
Partnership (Kommandiittiyhtiö, Ky)
This type of entity is owned and managed by two or additional people or entities. One partner is fully accountable for the firm’s debts while the other is only responsible for the degree of their stake capital.
Sole Proprietorship (Toiminimi)
This type of entity is owned and managed by a sole individual. The owner is fully liable for the company’s debts and is not required to register the business with the Trade Register.
Branch Office (Filial)
A foreign company can organize a branch office in Finland. The foreign firm is completely responsible for the losses of the branch office.
Each form of company structure has its own particular requirements and advantages. Though it is a must to do thorough research while thinking to register a company in Finland.
Eligibility for Finland Company Registration
In order to register a company in Finland, certain requirements must be met.
Certain conditions that must be met for a Finland company registration include:
- The firm name should be unique and cannot be misleading or offensive.
- A firm should possess at least one shareholder.
- A firm should possess a minimum of one director, who can be a shareholder or a non-shareholder.
- A firm should possess a valid business plan, outlining its commodities or services, target market, and economic predictions.
- A firm should possess a valid business address in Finland.
- If the firm is employed in certain types of business activities, such as manufacturing or retail, it may be required to obtain a business license or permit.
- The firm should comply with all applicable laws and regulations, including tax laws, labor laws, and environmental laws.
It’s important to note that the process of registration may take longer for certain types of business activities, such as those that require a special permit, and you may also have to provide more documentation.
Various Taxes on Finland Company Registration
Finland has a relatively low and straightforward tax system, which can be beneficial for companies.
Some of the taxes that may be subject to when a company registration in Finland is done are:
- Corporate Income Tax: firms are expected to pay corporate income tax on their profits at a rate of 20%.
- Value-Added Tax (VAT): The general VAT rate in Finland is 24%. However, a lower rate of 14% and 10% is also applicable to specific products and services. There are some products and services whose VAT rate is 0. Furthermore, some services are excluded from the VAT.
- Property Tax: Companies may be required to pay property tax on any real estate they own or lease.
- Capital Gains Tax: Companies are accountable to capital gains tax on the sale of assets, including shares and real estate.
- Dividend Tax: Dividends paid to shareholders are subject to a 30% withholding tax.
It’s important to note that Finland has Double Taxation Treaties with many countries which can help you avoid or reduce taxes if you are doing business with those countries
Cost to Register a Company in Finland
The cost to register a company in Finland can vary depending on several factors, including the type of company, the services used, and any additional expenses that may be incurred.
The cost of Finland company registration typically includes the following:
- Company registration fee: This fee is paid to the Finnish Patent and Registration Office (PRH) when the company is registered. The fee is based on the company’s share capital and typically ranges from a minimum of hundred euros to a few thousand euros.
- Legal fees: If you use the services of a lawyer or business consultant to assist with the registration process, their fees will be an additional cost.
- Accountancy fees: If you use the services of an accountant to assist with the registration process, their fees will be an additional cost.
- Other costs: Depending on your business activities, you may also incur other costs such as business licenses, permits, or insurance.
The cost of Finland company registration can vary widely, but it’s generally in the range of a few thousand euros. It’s important to consider all the costs involved when budgeting for company registration and to seek professional help to ensure that you are aware of all the costs involved.
Advantages of Finland Company Registration
There are several advantages to company registration in Finland, some of which include:
Stable and transparent legal system
Finland has a stable and transparent legal system, which can provide a secure environment for doing business.
Pro-business government
The Finnish government has a pro-business attitude and offers various incentives for companies to operate in the country.
Highly educated workforce
Finland has a highly educated workforce and a strong tradition of innovation, making it an attractive location for high-tech industries.
Access to the EU market
Finland is a member of the European Union, which provides access to a large market and the ability to easily conduct business with other EU countries.
Low and straightforward tax system
The Finnish taxation system is relatively low and straightforward, which can be beneficial for companies.
Strong infrastructure
Finland has a well-developed infrastructure, containing transportation, communication, and energy systems.
High standard of living
Finland consistently ranks high in measures of quality of life, such as education, healthcare, and social welfare.
Legal protection
The Finland legal system provides strong protection for property rights, contracts, and intellectual property.
It’s worth noting that each country has its own set of advantages and disadvantages, and it’s important to consider which one is best for your business based on your specific needs and goals.
Conclusion
Due to Finland’s membership in the EU, it is possible to simply do business with other EU nations and have access to a sizable market. According to the Index of Competition, Finland is one of the most competitive countries in the world, as it is easy to incorporate a Finnish company.
Eventually, registering a company in Finland could be a time taking and expensive process. It’s recommended to hire a professional from OnDemand International to guide you through the process of company registration in Finland. Our experts will streamline the registration process for your and make sure that your business is properly registered.
FAQ’s
A foreigner can open a Finnish company by registering it with the Trade Register of the Finnish Patent and Registration office. Minimum 3 partners of the Board of Directors must be present.
The average time it requires for Finland company registration typically takes 7 days.
Finland does not have any least conditions for firm formation. For company registration in Finland, you must comply with the applicable Finish Corporate Law
Fund expectancy is not needed for a private limited company. For a Finnish public limited company, however, the least fund required is EUR 80,000.
Starting a business in Finland can be easier than in many other countries. It requires approximately 2 to 3 weeks to open a bank account, register a company, and register for tax administration.
