Setting up a company in Finland

Setting up a company in Finland costs €2000 + VAT.

Why start a business in Finland?

Finland’s success story shows that in a globalised economy, a highly industrialised, knowledge-based and innovative economy is based on free trade and openness to investment. As a result, the Finnish business climate is markedly international and attractive to foreign investment. Multinational companies benefit from Finland’s reliable infrastructure, highly educated workforce and ease of doing business. When setting up a business in Finland, it is important to know that the taxation of doing business here varies depending on the type of business. Direct taxes can influence the choice of starting a business, so starting a business in Finland needs to be well thought through and properly assessed.

Currently, different types of business forms can be set up in Finland:

– Sole trader (Toiminimi).

The simplest and most common way to set up a new company, with only one founder and no specific minimum share capital requirement. Another advantage is that online registration costs only €75. If the business is successful (profitable), it can become a second legal form over time. The main disadvantage of this model is that the full responsibility lies with the entrepreneur and the liability is unlimited. This means that, in the event of bankruptcy, the founder is liable for debts and/or liabilities incurred with his personal assets.

– A limited liability company (Osakeyhtiö, OY - Estonian equivalent to OÜ).

This type of company does not have a fixed initial capital (it can be set up without capital). However, if the company is incorporated with capital and it is deposited in the company’s bank account, the company can use it as needed. The share capital must be divided into shares, and each shareholder’s voting rights depend on the number of shares he or she owns and the proportion of the benefits and liabilities.

– Limited Liability Company (Limited Partnership, KY).

This legal form differs from a true partnership in that it consists of at least one limited partner, usually acting as an investor. A limited partnership requires at least one general partner and one limited partner with a financial contribution. There is no minimum capital requirement for this type of partnership, but at least one of the members is liable for the debts and obligations of the partnership.

– A joint-stock company (also known as a corporation) (Julkinen Osakeyhtiö, Oyj).

A minimum number of shareholders is required to set up a limited company and the share capital must be at least 80000€. The board of directors must consist of a managing director and at least three members. The company must also publish interim and annual reports on its results.

How is a company set up in Finland?

Registering a company in Finland is more convenient than ever – once we are selected, services are offered to clients remotely, professionals send all the documents. The registration itself usually takes 1 to 2 months.

The prospective entrepreneur will receive a questionnaire and a list of documents to fill in. We will liaise with the notary and, if necessary, ask you for further details.

The share capital of OY is 0€. However, it is advisable to deposit at least 1€. If the company is established with capital and it is deposited in the company’s bank account, the company can use it for its activities.

One shareholder is sufficient to set up a company, but there must be two board members (both must be EEA residents). The share capital must be divided into shares, and each shareholder's voting rights depend on the number of shares and the weighting of his/her interests and liabilities.

Setting up a company in Finland involves several types of taxes:


Income tax rate is 20%


VAT is 24%


If a person is not resident in Finland and receives dividends, interest and royalties, he or she must deduct the tax withheld in Finland. This rate is usually 30%. If the payment goes to the shareholder of the registered shares, the payer does not have the necessary information to identify the payee. In this case, the withholding tax rate is 35%.


Finland has the lowest corporate tax rate among the Nordic countries and one of the lowest in the EU. In addition to moderate tax rates, Finland now also offers new tax incentives for companies operating in Finland. The Finnish tax administration has a unique, business-friendly and predictable approach.

If you are not resident in Finland and receive dividends, interest or royalties:

You will have to pay an additional tax to the Finnish tax system. The rate is usually 30%. If you are not resident in Finland and your country of residence is in the European Economic Area (EEA) and the dividend tax withheld in Finland is not fully refundable in your home country, you can apply to the Finnish tax authorities. It may tax the dividends as if they had been received by a Finnish resident. The earliest you can apply is after the end of the tax assessment period in your home country.

Finland is a very modern and highly developed European country. The foundations of a well-functioning Finnish society are a transparent government, efficient state institutions, an independent judiciary and, above all, respect for the rule of law. This northern country also has strong civil liberties and advanced gender equality legislation. Business creation in Finland remains one of the most politically stable countries in the world, according to the BMI survey.

LCPC aims to provide you and your business with high quality assistance. Setting up a company is one of the first steps in building your business, and we will help you along the way!

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