Both citizens and immigrants with a residence permit that allows them to engage in business activities can start a company in Finland. You can move to Finland through Business Finland, a startup organization, or independently by obtaining a residence permit and registering a legal entity in the commercial register.
Founding a company in Finland allows you to legally reside in the country, sell goods and services in EEA countries without paying customs duties, and conclude international agreements that allow you to expand your business and find new partners in the EU. Now, let’s take a closer look at the procedure for registering a legal entity and the main requirements for entrepreneurs.
Doing business in Finland: regulations for foreigners
If your residence permit allows you to work and do business in the state, the company registration procedure and requirements for the founder are the same as those for the Finnish citizens. The country’s policy aims to attract investment, support innovative startup projects, and create jobs for residents.
When registering a company in Finland, immigrants have the following rights and obligations:
- To carry out business activities in accordance with local legislation;
- To pay taxes at the established annual rate;
- To expand the business through agreements with international partners;
- To register a residence permit for employees.
If you immigrate to Finland by launching a startup, you must obtain approval from Business Finland, a government organization that reviews and approves requests from foreign entrepreneurs. The application requires:
- A team of two or more experienced founders who plan to relocate to Finland;
- Funding or cash savings to start the project and cover personal expenses for the first year;
- An innovative and promising business plan;
- Employment of all owners of the organization and their direct professional involvement in the startup.
Should one buy a ready-made business or start a company?
It is easier for a foreigner planning to engage in entrepreneurial activities to buy a business or purchase a franchise in Finland. In both cases, a ready-made plan for starting a company is provided. Selling a business usually includes renting premises, a supplier base, and staff. However, acquisition requires a large financial outlay. A franchise provides a ready-made plan with step-by-step support and assistance at all stages of launching your own business. However, it obliges you to pay monthly royalties for the use of copyrights.
Starting a company requires a promising idea and a plan for implementing it in the Finnish entrepreneurial market. Creating a new legal entity requires relevant experience and financing but costs less than buying an existing business. Foreigners should base their choice on their professional capabilities and the capital available to them.
How to open a company in Finland: a step-by-step guide
- Collect and prepare documents. The entrepreneur must develop a long-term plan for successfully growing the business in Finland. Additionally, documents must be collected for submitting a residence permit request to the relevant consulate or embassy.
- Apply for a residence permit. A long-term type D visa and a residence permit for business activities must be applied for at the embassy. Citizens of countries that have a visa-free agreement with Finland can apply for a residence permit directly at the Finnish Migration Department. The application for residence status must include information about the future organization and the documents required to register a Finnish company.
- Obtain an identification number. Foreigners must apply in person to the Digital and Demographic Data Agency and complete an application for a personal identification number. This number is required to open a bank account and carry out business activities in the country.
- Register the company name in Finland. The applicant should verify with the Patent and Registration Office that there is no organization with an identical name. When registering the legal entity, several alternative names may be provided to avoid duplication.
- Apply for the company launch. The founder must choose one of the available business structures (private enterprise, general partnership, limited liability organization, etc.) and register with the Business Information System. After submitting the application and paying the fee, the applicant receives an identifier — a personal number for the legal entity — that will be used for tax services, accounting reports, and opening a bank account.
Registering a legal entity and hiring employees in Finland requires strict adherence to local legislation. Professional legal support can simplify the complex process of relocating a business or launching a startup in Finland.
Seeking assistance from ensures compliance with Finnish company registration laws and successful residence permit registration for founders.
Different aspects of company registration
A foreigner with a residence permit and the right to carry out business activities can register a branch office or start a new company in Finland. For tax reporting purposes, the services of a local accountant familiar with current income tax rates should be used.
Legal forms of business activities
The following types of companies can be established in Finland:
- Sole proprietorship (SP). This is a form of a legal entity that can be established by one or more persons. There are no minimum capital requirements for sole proprietorships. A sole proprietor pays income tax as an individual. Sole proprietorships are most often suitable for small businesses and commercial activities involving only one person.
- Limited Liability Company (LLC). An LLC can be registered by one foreigner, but it requires at least one deputy member of the board of directors to conduct business activities. Requirements for the minimum authorized capital of an LLC are imposed when creating a public company whose shares will be available for trading. In this case, when opening a business in Finland, it is necessary to invest at least EUR 80,000. The LLC pays income taxes on behalf of the company.
- General Partnership (GP). Registering such an organization requires at least two individuals to participate. The two founders can make decisions about the company’s activities, but they usually choose a managing partner to handle most of the management responsibilities. There is no minimum authorized capital requirement. GPs pay taxes together with the personal income tax rate.
- Limited Partnership (LP). This form of an enterprise requires one managing director and, upon formation, an additional silent partner. Only the silent partner is required to contribute to the share capital. Finnish law does not stipulate a minimum amount; however, the amount of the contribution must be written into the memorandum of association. Each partner pays taxes individually on income derived from business activities. This type of partnership is best suited for small organizations where one founder does most of the work while the other is registered as an investor.
- Cooperative. This type of a business can be registered independently. However, at least one deputy member of the board of directors will be required for successful activity. There are no requirements for minimum authorized capital. Taxes are paid on behalf of the legal entity. Each partner must report profits from commercial activities and pay personal income tax.
With a Finnish residence permit, you will be able to:
- Be legally employed in Finland;
- Grow your business in a developed European country;
- Study at Finnish universities on favorable conditions;
- Receive social benefits from the state.
Leave an application and get a consultation with an immigration specialist
Required documents
In order to register a legal entity, the following documents must be submitted:
- Identity cards (foreign passports) of all founders;
- A residence permit that allows the holder to conduct business in the territory of the state;
- Finnish identification codes for each partner;
- A memorandum of association;
- Articles of Association;
- A completed form about launching the organization on the Business Information System portal.
All documents must be translated into Swedish, Finnish, or English. Certificates issued by state authorities must be apostilled.
Processing times and costs of opening a Finnish company
Depending on the founder’s competence and the expertise of the lawyers on the team, preparing the documents and business plan can take several months. The processing time for the first residence permit for an innovative startup is 14 days for electronic applications and 1-2 months for paper requests. In general, the startup process can take up to six months, depending on the business’s size and the time needed to prepare all the documents.
Company registration costs:
| Cost item | Amount, € |
|---|---|
| Fee for registration in the Finnish Commercial Register | 240–380 |
| Authorized capital | 1000–2000 |
| Expenses for legal assistance in preparing articles of association and business plan | 1000–2000 |
| Residence permit application | For start-up projects:
350 — for an online application 480 — for a paper request |
| For other foreign entrepreneurs:
490 — for an online application 690 — for a paper request |
|
| Document translations and apostille | 400 |
Business taxation in Finland
According to the tax legislation, rates must be paid on income received according to the legal entity number, as well as the country’s resident identification code. Registering the company in the Finnish Commercial Register automatically notifies the relevant authorities of the new taxpayer. If the organization’s annual turnover exceeds EUR 15,000 or if it plans to hire employees, it must register with the VAT register.
Commercial organizations must submit monthly reports on the My Tax (Finnish: OmaVero) state portal indicating income received to ensure the timely payment of income tax, value-added tax, and excise duties, as well as salary payment information. VAT is not paid on the sale of real estate or medical and social services. Organizations with an annual turnover of less than EUR 15,000 are also exempt from this tax. There are no exemptions for foreign entrepreneurs.
The main tax rates under Finnish law:
| The tax | Rate, % |
|---|---|
| On income | 20 |
| On capital gains | At income:
Up to EUR 30,000 per year — 30 More than EUR 30,000 per year— 34 |
| Value Added Tax (VAT) | 14 for restaurant services and foods
10 for books and accommodation services 24 for other categories of goods and services |
What kinds of businesses to open in Finland: a list of ideas
Considering market demand and local entrepreneurial specifics, the following options are ideal for starting your own business:
- Construction firm. This type of business is suitable for foreigners with relevant work experience. Construction organizations typically employ entire teams, so you should register an LLC in advance. Depending on the services offered, the purchase of tools requires investments from EUR 2,000.
- Courier service and road transportation. To transport goods, one can register as a sole proprietorship or an LLC if there are several cars in the fleet. The cost of opening a courier service ranges from EUR 25,000, depending on the cost of the vehicle.
- The stable demand for bakery and confectionery products provides an opportunity to start a small business, either by baking to order or by opening a small store to sell ready-made products. If you need to hire employees, you must establish an LLC. Starting a confectionery shop requires an investment of at least EUR 1,000.
- Car and bicycle repair. If you have the relevant experience and education, car repair is one of the most promising business niches in Finland. Depending on the number of partners or employees, you can form a general partnership, LLC, or a cooperative. To open a workshop, you will need investments of at least EUR 3,000 for renting premises with an elevator and purchasing tools.
- Cleaning services. Opening a cleaning business involves registering as a sole proprietorship or LLC, depending on the number of people on the team. The start-up requires investments of at least EUR 400 for cleaning products, equipment, and other necessary tools.
Business immigration: how to obtain a Finnish residence permit through company registration
You can obtain residency in Finland by submitting an approved startup application to Business Finland. Startup entrepreneurs must apply online or send a package of documents by mail. Once your application is approved, you can apply for a residence permit at the Finnish diplomatic mission in your place of residence.
In order to apply for a residence permit, the following data must be provided:
- A business plan;
- A passport-size photo;
- Diploma or other certificate of professional education;
- A financial forecast for the next two years;
- Proof of sufficient funds to cover living expenses at a rate of at least EUR 1,000 per month for one year.
The first residence permit is valid for two years and can be obtained immediately. The processing time for the initial application is between 14 days and 2 months, depending on the way it was submitted. The state fee is between EUR 350 and 480.
Assistance with obtaining legal residency in Finland
In order to open a branch or start a startup in Finland, a foreigner must be a legal resident on the basis of a residence or permanent residence permit. Those planning to register a management company in Finland for their holding company or establish a new business should obtain resident status with the right to employment and business activities in advance.
Foreigners can immigrate to Finland with their families by launching a startup, provided their application meets the necessary requirements. With the help of P4 lawyers, who study the latest amendments to the country’s legislation and keep track of successful residence permit applications, foreigners can obtain legal residency in Finland.
Having lets you get a permit to live in the country and start a business with minimal time and effort.
