Breakdown of Finland company registration fees and expenses

The Republic of Finland is northern European Nordic country. The country features among the most developed nations of Europe in particular and the west in general. Finland shares borders with Sweden, Norway, and Russia.  Factors such as a great territorial location, access to major European markets, trade and tax agreements with big nations, strong policies, and political stability has led Finland to become one of the most respectable and economically attractive places in the world.

Finland has an open economy that encourages new businesses and start-ups. Assistance to companies applying for registration is provided on each level by the state throughout the process to ensure success. An investor may choose from one of five business formats according to his/her needs and objectives.

The below table provides the types of legal business structures and other details.

S#	Type of business format	Local name	Minimum paid-up capital required
1.	Sole Proprietorship	Toiminimi	No minimum requirement
2.	Limited Company	O Sakeyhtio	No minimum requirement
3.	General Partnership	Avoin yhtio	No minimum requirement
4.	Limited Partnership	Kommandiittiyhtio	No minimum requirement
5.	Cooperative association	Osuuskunta
6.	Public Limited Company	Julkinen Osakeyhtio-Oyj	€80,000

Sole proprietorship – Toiminimi

A sole proprietary business is probably the oldest format of business known to man. A person can simply decide on a name, check the availability, and request registration online or in person. The owner takes all the decisions and is responsible for all the outcomes, profit or loss both. 

The online registration fee of a sole proprietary business is €60, and in case the application is submitted in-paper (in-person), the applicable fee is €115. Taxes are applied on the net income, i.e., total income minus the expenses. The higher the profits the more tax will be deducted.

Another requirement is to register for VAT if the turnover of the business is more than €10,000 annually. The prevailing VAT rate is 24%, but it may vary or change from time to time. Generally, the VAT is filed quarterly, however, if the annual income is less than €30,000, the VAT may be submitted annually.

Limited company – O Sakeyhtio

Finnish limited company is similar to a limited liability company elsewhere. The liability and responsibility in case of loss, debt, or solvency lie upon the company and not on the owners. The owners are responsible for the extent of their share in the investment.

The owners of a limited company are referred to as shareholders, and a company usually has several shareholders. The shareholders further appoint a managing board to look after the company’s operations. The cost of registering a limited company in Finland is approximately €330.

General & limited partnerships – Avoin yhtio & Kommandiittiyhtio

A partnership is formed when two or more persons come together to promote a common business interest. All parties to a partnership sign a partnership agreement whereby clearly laying out the duties, responsibilities, functions, and investment of each partner. 

In a general partnership, all partners serve the firm equally and thus enjoy the profits in the same manner. In a limited partnership, one set of partners assumes all the responsibility of operations and managing the firm while the other set is only burdened to bring in capital. The working partners are called the general partners, and the investing partners are called the limited partners.

In both types of partnership, the business is registered with the Trade Register of Finland and may cost around €250 for the process.

Cooperative association – Osuuskunta

A cooperative association is aimed to bring economic prosperity to its members and surroundings. The objective is to raise the standard of living of the society that comes into contact with the business by building platforms to create job opportunities, conducting corporate social responsibility activities, etc.

A cooperative association is owned by its members; each member exercises a single vote in the association meetings. The responsibility as to debt and loss on each member is assumed to the extent of his/her share in the association.

The Trade Register of Finland registers a cooperative association at a fee of approximately €380 which must be paid before application.

Public limited company – Julkinen Osakeyhtio-Oyj

A public limited company also referred to as a joint stock company, is the business of choice for people who require large capital investment to initiate or propel their businesses. Funds are raised through public offerings in the shape of company shares which are priced according to the capital required. The owners pledge an amount with a commercial bank against which they are allowed to issue shares of a certain value. The difference between the amount pledged and the funds garnered by the shares is kept by the company.

A public limited company is the most capital-extensive format in Finland and requires a minimum share capital of €80,000 to qualify for registration. The registration process may cost approximately €1000.

Costs involved in establishing and running a company in Finland

Every business structure incurs two types of cash outflows; costs and expenses. Usually, the cash outflows that occur once, or have a lesser probability to reoccur are termed costs, while outflows that have a periodic recurrence are called expenses.

One-time costs

One-time costs may include:

1. Company incorporation – €115 – €1,000
2. Account opening fee – €2/month (variable)
3. Notarization of prerequisite documents – €4/page
4. Legal business address
5. Translation of documents – €0.2 – €0.5/page

Recurring expenses

Recurring expenses include:

1. Office rent (if a physical office is maintained, else this cost is covered in iv. above)
2. Accounting services
3. Registration for VAT, EORI, OSS, etc.
4. Notarization of business agreements and contracts

Benefits of registering a company in Finland

A non-European foreigner can establish a company in Finland with very little effort, provided he/she fulfills the basic conditions. The conditions are:

1. The business is registered with the Finnish Trade Register
2. Has at least 3 members on the directors’ board
3. The main founder must be a Finnish or European citizen
4. Applicant must first acquire a business ID 
5. For sole proprietary business, the owner must be a resident of the EEA region
6. The profitability projection of the business must be endorsed by the Economic Development Center

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