Company Formation in Finland

Finland is ranked among the European countries that offer the best conditions to do business due to the developed transparent legislative base and stable economic situation in the country.
Foreign companies are restricted in certain ways when performing in the field of broadcasting, passenger transport (public transport), gambling, national postal delivery, and the energy industry.

In 2015, the country found itself among the top ten world countries in the category “Ease of Doing Business.

Company Formation in Finland in 2023

This country is…complicated, to put it lightly.
Let’s start with the positives.

  • No share capital requirements. At all. So there’s no need to get a temporary bank account opened.
  • Finland allows 100% foreign ownership.
  • Highly educated workforce.
  • Great logistics hub.

And that’s basically it.

Now let’s have a look at the taxes

Corporate income tax – 20%, subject to worldwide income.
Personal income tax – progressive, goes up to 56%
Dividends – complicated, depends on sources.
VAT – 24%

Now let’s go for the fun part.

Company Formation in Finland in 2023

The process of company
formation in Finland

Minimum 1 shareholder (can be 100% foreign)
Minimum 2 EEA-resident board members, or minimum 3 board members, of which 1 is an EEA resident.
Legal address in Finland.

There is an option to register a company in Finland digitally and remotely, but you need to have digital identification codes, which are only given out to Finnish residents. Also, the digital registration forms only come in Finnish and Swedish.

So, for anyone looking to expand operations into Finland without having a resident Finn already in the team, literally, every government application or procedure is done by paper on physical mail.

The current processing time for a paper notification is 1 month. And then add in another 2 months for the tax office’s registrations because those are also only done via paper mail.

So, at the bare minimum, you’re looking at three months to get a company working in Finland.

In case you were thinking of being clever and just buying a ready-made company over there to avoid this hassle instead of company formation in Finland from scratch, then I’m afraid I must disappoint you – the company ownership change is also done via paper mail, and you’d have to pay the state fee twice.

Because of this complexity, a lot of clients choose instead to register a branch in Finland.

Same as with Sweden, a branch is just a foreign company that has been entered into the Finnish business register (again, by paper) and makes limited operations in Finland. Suitable for companies that are doing limited business over there.

Company Formation in Finland in 2023

Are You Still Interested in Company Formation in Finland?

With all this said, who on earth is interested in a company formation in Finland?
Well, from my own experience, the most frequent buyers of Finnish companies are Estonians looking to relocate their business over there.

The main reason anyone moves their business into Finland is for their fantastic social services and high salaries.
Another type of clients is medium to big-sized companies looking to expand operations and take advantage of Finland’s highly educated workforce or fundraise. The main industries are construction, IT, and engineering firms.

Company Formation in Finland in 2023

Types of Legal Forms in Finland

Joint-Stock Company

Оsakeyhtio (Oy)

The resident status is not the binding provision for the founder. A legal entity or a natural person may act as the founder. The amount of the authorized capital shall not be less than two and a half thousand Euros. Each shareholder bears the equal responsibility in proportion to the amount of contribution to the capital. The board created shall manage the company. The income tax rate for joint stock companies shall be 20% (twenty per cent). Such legal form of business is recommended for registration of most spheres of activity.

Private Entity

Toiminimi (T-mi)

Only a natural person can register this form of activity. The major condition is the permanent residence within the territory of the European Economic Area. Two business areas have been developed:
— an individual entrepreneur who performs solely without any employees;
— commercial owners (employ other persons to work for the company).
Such structure is frequently chosen by small businesses with relatively small annual intra-entity turnover. One portion of the earned profit is taxed on earned income, the second portion is capital yields taxed.

Cooperative Society

Оsuuskunta (Ok)

The main requirement to create the cooperative society is at least three members. They can be both legal entities and natural persons. The liability of founders shall be shared in proportion to their contributions. A 20 percent tax shall be payable on the profit earned. The structure of the cooperative is mostly suitable to social sector agencies.

Unlimited Partnership

Avoin yhtio (Ay)

Two or more members shall be required to create the partnership. At least one of founders should reside within the European Economic Area. A partnership is chosen for doing family business. The amount of profit shall be distributed among all members and then is taxed similarly to the revenue of the private enterprise.

Limited partnership

Kommandiittiyhtio (Ky)

To register a company, at least one responsible member shall be required who necessarily resides or has registered the business within the territory of the European Economic Area, as well as one contributor (without the right of voice). Tax base − rates are identical to those for PE; they are determined as the profit is distributed among all partners.


Filiali Finland

To register a branch of a foreign organisation in Finland, the name must contain the status of the branch.

Company Formation in Finland – Summary

Overall, Finland is rarely a good fit for most clients due to their very complicated company registration procedure, and only fits clients who genuinely need to have production or services made in Finland due to a specific niche or for clients that just want to relocate to Finland to make use of their social benefits.

Also, as noted previously, Finland’s an option only for EEA residents. For everyone outside the EEA, if they don’t have an EEA partner in the team, then Finland’s a no-go for setting up a business over there.

If you would like to consider other options besides company formation in Finland, then we recommend taking a look at Estonia.

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