Company Registration in Finland
Finland sits centrally in Northern Europe, offering immense business potential for entrepreneurs globally. Being a full-time EU member, Finland ranks among the top nations for conducting business affairs. With robust connections with Russia and Baltic nations, the country has fostered a formidable trading environment, contributing significantly towards its GDP. Starting a business quest in Finland requires following various legalities, including meeting minimal criteria, preparing incorporation documents, registering the entity, etc. This article explores the process concerning company registration in Finland, documents, eligibility criteria, structures, etc.
Business Structures for Company Registration in Finland
The applicant can choose one of the following business structures for Company Registration in Finland:
Proprietorship (Toiminimi)
Establishing a proprietorship firm in Finland is a big deal since it attracts minimal compliance. There is no need to procure minimal capital or appoint officials, making it easy to register and operate. The only severe downside of this structure is that it attracts unlimited liability for the owner. This can pose an unprecedented threat to the owner’s assets in harsh events.
Limited liability company (Osakeyhtiö, OY)
In Finland, the limited company is among the most preferred structures. Such a company can be formed either by individuals or shareholders. A shareholder holds shares, which decides on their voting power and obligations. As such, no minimal capital requirement is required to form this company.
General Partnership (Avoin Yhtiö)
It takes two persons to form such a company in Finland. Founders must arrange the minimum capital and a registration form enclosing the partners’ rights and details. The partners in such a company have access to equal rights and profit. The same rules apply when it comes to addressing debts.
Limited partnership
This structure requires at least one limited and general partner. Depending on the mutually agreed terms, partners can decide how much profit they would take and what obligations they will meet. Since this structure fosters one limited partner, it is more stable than the aforesaid structure.
Public limited company
Big businesses mostly favor this structure since it has amplified expansion potential. This structure allows for public share trading, reinforcing the potential for growth and fundraising. Formation legalities for this structure include at least one partner, €80,000 share capital, and a board having one CEO and three members.
Cooperative Association (Osuuskunta)
Members from different walks of life come together to form such a structure, which does not attract any capital for formation. The structure seeks at least three founders, each contributing an equal share of capital. The liability of members is equivalent to their share contribution.
Branch Office
A branch office is an extended arm of the controlling entity. Thus, the debts and liabilities it incurs are addressed by its holding company. It lacks a unique legal status since it helms by its controlling enterprise.
Procedure for Company Registration in Finland
Follow the given steps to secure Company Registration in Finland:
- Select an apt business structure based on your management capabilities and risk appetite to handle compliance and taxes.
- Reserve the company name. Ensure that the selected name is trademark-free.
- Prepare charter documents like MoA enclosing the object, roles of members, structure of ownership, etc.
- Apply for industry-specific approvals if required.
- Visit the Finnish Patent Registration Office (PRH) for entity registration. Fill out the prescribed form and attach key documents including AoA, partners’ details, passports, business place proof, shareholders’ information, etc.
- Head to the Finnish tax administration for tax registration and obtain a VAT number.
Documents required for company incorporation in Finland
- The required documents for company registration in Finland depend on the ownership structure.
- Typically, the articles of association outline the company’s purpose.
- A shareholder list must include the names and addresses of all shareholders.
- The names and addresses of the company’s board of directors must be provided.
- A business plan document should be included.
- Proof of the official company address, such as an electricity bill or rental agreement, is required.
- ID documents of the shareholders and directors must be submitted.
- Proof of payment for registration fees should be attached.
Notable Pointers Concerning Company Registration in Finland
Minimum Capital Requirements
- A private limited company does not require any capital.
- However, in the case of Finnish public limited companies, one must arrange a minimum capital of EUR 80,000.
Minimum Directors
- At least one director and deputy director are required to manage the company’s affairs.
- If two directors serve the company, a deputy director must be appointed by the board.
- A director should not be a minor and he/she should be a natural person with a zero criminal record.
- A director must have a clean credit record with no pending cases concerning insolvency or bankruptcy.
- At least one director must be an EEA member.
Minimum Shareholders
Appointing one shareholder is a must for company formation in Finland.
Tax structure
- Corporate income tax has been capped at 20%.
- The VAT is poised at 25.5%, however, a rate ranging from 10-14% can be applied to certain products and services.
- The property tax applies to companies that own or lease a business place.
- Capital gains tax is capped at 34%. The withholding tax ranges from 20-35% depending on whether the company is local or overseas.
Conclusion
Securing a Company Registration in Finland is a delicate process for overseas individuals as it attracts various intricate legalities such as adhering to minimum criteria, arranging minimum capital, preparing complex documentation, registering an entity with a competent authority, etc.
If complying with such requirements seems tedious to you, connect with Adviso without any second thought. We are India’s leading agency that provides top-notch consultancy regarding cross-border incorporation, compliances, registration, regulations, etc.
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