Finland is one of the most innovative countries in the world, offering highly educated work force and booming property market. Finland is a relatively small European country located in the Northern side of the continent. The country, which has a population of more than 5 million people borders other Nordic countries like Norway, Sweden, Russia, and the Baltic Sea. The country joined the European Union in 1995. Helsinki, its capital city, is one of the best-known cities in the world. Finland has a GDP of more than $251 billion, making it the 17th largest economy in the European Union. Finland, like other Nordic countries, ranks high on social indices such as happiness and satisfaction. 60% of the Finnish economy is represented by the service sector. Other main industries are electronics, machinery, and vehicles.
Company Incorporation in Finland
Company incorporation in Finland is quick, simple and implies low costs. When establishing a company in Finland, the first step is to choose three company names and submit them for approval. Our team of company formation experts can assist with advice on the procedure for opening a Finish company. However, it is necessary to know that the following conditions must be met in order to facilitate the registration procedure:
– the client must deposit the required share capital in a bank;
– submit a start-up notification form to the National Board of Patents and Registration (NBPR) and to the tax authorities;
– apply for pension insurance, accident insurance and medical insurance of his/her employees;
– present identification documents, such as passport copies, identification cards or driver license of both shareholders and directors and a recent utility bill or a bank statement as proof of residential address;
– submit the articles of association of the company that must contain the names and addresses of the shareholders and directors of the company (the Finnish Company Law requires a number of one to five shareholders);
– state the company’s main business purpose and the shares’ value owned by the shareholders in the company.
In order to open a bank account, the identification documents are required together with the application forms from the bank where the share capital will be deposited, the details about the company’s activities and banking relations, the resolution for opening the bank account and the persons appointed to operate the account. The share capital must be deposited in the bank account before the company is registered with the Finnish Trade Register.
Once all documents are ready they will be submitted with the Finnish Trade Register. Any person, no matter his or her nationality or residency, can be appointed as a director or a shareholder in a company in Finland. There must be at least two members in the board of directors and at least one member and one supplementary member must be an EU resident. Finnish companies are not required to have a managing director, but if a director is chosen, he or she must be an EU resident.
The company must have a local registered office and LegalGenius offers this type of service. A Finnish limited company is required to have a start-up capital of EUR 2,500 and it is also required to have an accountant. LegalGenius can help investors in offshore company set up; the specialists working at LegalGenius can offer specialized incorporation services for various European countries. In Finland, investors can benefit from the following services:
– drawing up the articles of association that can be signed through power of attorney (Finnish laws require powers of attorney for any public notary proceedings);
– drawing up documents for company incorporation in Finland – specimen signatures, identification papers copies, application form required for company registration;
– arranging public notary proceedings (all procedures for company incorporation are done in front of a Finnish public notary);
– providing a registered office in Finland on demand – the registered office serves as headquarters for the company in Finland and it will be made public;
– setting up a bank account for the company in Finland – We will help in setting up the share capital bank account, as well as a current bank account once the company is incorporated;
– recommending a Finnish accountant, as accounting services are needed for new businesses in Finland.
The Finnish limited liability company
The limited liability company in Finland can be private (osakeyhtiö-Oy) or public (julkinen osakeyhtiö-Oyj). Private companies cannot trade their shares on the stock exchange, while public companies are allowed to do so. Private limited companies require a minimum share capital of EUR 2,500, while public companies require a minimum share capital of EUR 80,000. Shareholders of both private and public limited companies will not be held liable for the companies’ obligations, but they must make specific contributions.
Basic formalities for opening a Finnish limited liability company
The limited liability company in Finland represents one of the most common way to start a business in Finland. This is a popular business form that can be found in most of the jurisdictions across the world, including in the countries that are generally suitable for offshore incorporation. Earlier in this article, we have presented some of the basic steps for opening a Finnish business; however, when opening a Finish limited liability company, the following will apply as well:
– drafting and signing the articles of association and the memorandum of association;
– the memorandum of association must contain information such as the name and number of shareholders setting up the company, the shareholding structure, the price of a share issued in the company and the structure of the Board of Directors;
– the articles of association is a statutory company document, which must clearly present the company’s registered name;
– the document must also provide information on the company’s office and the object of activity;
– the company’s share capital has to be paid prior to the registration;
– the company can also be registered using the online platforms of the Finnish institutions.
The registration of the Finnish limited liability company can take up to four weeks and the same period of time may be needed for the registration of a corporate bank account. Investors must also consider that they can register this entity with 100% foreign ownership, an characteristic that can be found in other European countries as well.
Besides this, the investors benefit from limited liability, limited to their participation at the company’s capital. From an accounting point of view, the company is legally required to file annual tax returns following the accounting regulations that are available here and thus, this company type must also apply for a tax identification number.
The company can be set up by natural persons and legal entities and its founders can delegate authorized persons to handle the registration procedure in Finland. The Finnish limited liability company can be used for entering import-export activities and our team of company formation consultants can assist with advice on the regulations applicable in this case.
The limited partnership in Finland
Finnish limited partnerships can be registered by two or more individuals or legal entities. The general partner will be fully held liable for the partnership’s obligations, while the limited partner will be held liable to the extent of his/her contributions. The general partner will have managerial rights and will be allowed to claim profits, while the limited or silent partner will have no right in making managerial decisions. The limited partnership is required to register with the Finnish Trade Register.
Finnish branch, subsidiary or representative office
Foreign companies are allowed to set up separate enterprises from the parent company, where the foreign company will be a shareholder in a Finnish company. Foreign companies can also open extensions of the parent company in Finland. Our company formation specialists can assist with further advice on the characteristics of branch offices, subsidiaries or representative offices.
The main reasons for investing in Finland
Numerous countries around the world offer a wide range of advantages for those interested in opening a company in a foreign jurisdiction. Some countries are ideal for offshore incorporation, while others have the perfect legal environment for registering businesses with the local authorities and running them on the local markets. In the case of those who want to open a company in Finland, the following reasons can influence the registration of a legal entity here:
– its manufacturing sector accounts for 38% of the total economic activities developed in this country;
– those who are seeking a suitable market for construction activities can invest here, as this sector accounts for 11% of the total operations, being the second most important economic sector of the secondary production in Finland;
– the services sector in Finland is represented by trade (12%) and transportation and storage (8%);
– in 2016, the Finnish exports were comprised by the exports of goods (69% of all the exports) and services (31%);
– the exports of goods had a total value of EUR 52 billion in 2016, while the export of services accounted for EUR 23 billion.
Taxation in Finland
The corporate tax in Finland is 20%. The standard VAT rate in Finland is 24%, but reduced rates of 14% and 10% apply to certain products. There is no dividend tax paid to a Finnish company, but there is a 20% tax on dividends distributed to foreign companies that do not have a registered office in Finland.
How we can help you
If you are considering forming a business or you need expert help with company registration in Finland, LegalGenius™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.
Please use our Company Formation Wizard if you would like to set up your registered company in Finland or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at email@example.com