Finland is a member of the EU. It is a country with a highly industrialized economy and a developed technological infrastructure. Currently, this state is one of the richest in the European Union. The registration of an international company in Finland is considered a profitable solution since such structures receive high returns on investment and enjoy the same advantages as Finnish companies.
Before you decide to open a company in Finland, you should first familiarize yourself with the key advantages of this jurisdiction:
- Favorable geographical location;
- Political stability;
- The significant economic potential of the country;
- The country offers one of the lowest corporate tax rates in Europe;
- According to the Doing Business 2019 report released by the World Bank, which measures the ease of doing business in 190 countries, the country is ranked 17th in the ranking;
- The transparency of Finnish legislation creates a solid foundation for investment;
- Access to good networking infrastructure, R&D facilities, and an active startup community;
- English speaking business environment;
- Finland is one of the least corrupt states in the world;
- Official languages are Finnish and Swedish. The population is fluent in English;
- Possibility to obtain a residence permit;
- You can register a company in Finland remotely.
The Companies Act governs the process of setting up a company in the Republic of Finland. Below are the steps you need to follow to open a company in Finland:
- Choose a title. Search for the name in the Trade Register of the National Board of Patents and Registration (NBPR);
- Decide on the оrganizational and legal forms of your future company;
- Prepare a Memorandum and Articles of Association, notarize them and send them to the Regulator;
- Provide the authorized body with certified copies of the passports of the founders of the company;
- Get EIN;
- Register with the tax authority and be sure to subscribe to the services of pension and medical institutions.
If you plan to conduct regulated activities in this state, special permits may be required. In some cases, it is necessary, for example, to obtain a license to provide banking services in Finland or obtain permission to open venture funds.
You can use one of the following forms to register a business in Finland:
- Limited Liability Company (LLC);
- Public Limited Liability Company (PLC);
- Partnership (general and limited). A partnership is created by at least two members (one of them must be a resident of the EEA). The profit is distributed among partners by their initial contribution;
- Individual entrepreneurship;
- Joint-stock company;
- Subsidiary company.
It is the most popular form of business in this jurisdiction. LLC is a corporate structure in which members are not personally liable for the debts or obligations of the company. A minimum of two founders is required to form an LLC in Finland: one director and one shareholder. Both must have domicile in the European Economic Area (EEA) unless the National Council on Patents and Registration grants an exception to this rule. The appointment of a CEO is optional. But if elected, he/she must be a resident of the EEA. Starting from 2019, no minimum share capital is required. LLC must be registered with the Commercial Register. You can also register an LLC in Finland remotely.
It is possible to create a Public Limited Company in Finland for running a large business. The minimum initial investment is 80,000 EUR. The board must consist of more than 3 members (more than 50% of them must be residents of the EEA) and a director if the capital exceeds 80,000 EUR. This type of company can be listed on the Helsinki Stock Exchange.
The creation of a General Partnership in Finland requires at least two general partners. This type of business does not require a minimum share capital, and the participants are equally liable for debts and obligations. The profits can be divided equally between the partners.
Registration of a Limited Partnership in Finland requires at least 2 partners. One of them must be general (bears full responsibility for the obligations of such a structure), and the second must be limited (does not have the authority to make decisions and cannot claim profit).
A foreign company can open a business in the Republic of Finland through a branch. This is a type of business structure in which income is taxed only if it is received in the territory of a given state. To register a Finnish branch it may not be necessary to open an account with a Finnish bank or deposit the share capital since this is not a prerequisite. However, a registered office and an EEA resident representative are required.
A resident of the European Economic Area can work in this state as a private entrepreneur. It is the easiest and cheapest way to start a business in Finland. The company form does not require a registered capital or bank account.
Before registering a business in Finland, you should familiarize yourself with the tax base of this jurisdiction:
- VAT – 24%;
- VAT on trade within the European Union – 0%;
- Profit – 20%;
- Income – 17.35%;
- Social security – 2.12%;
- For dividends – 24.5%;
- Interest – 0%;
- Royalty – 24.5%;
- For real estate transactions – 4%.