Finland Entity Set Up

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Finland Subsidiary Set Up

Global expansion into Finland generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our Finnish entity. By using our PEO-service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of just frustrating and time-consuming. Therefore, we have been supporting companies in over a hundred countries with their expansion plans.

In this guide, we will share which documents you need to establish an entity in Finland, but also where you will need to register your business address and company’s name. We will also break down the advantages and disadvantages of setting up an entity in Finland.

Set up an entity in Finland

Launching a subsidiary overseas takes time and eats up funds – and the venture has no guarantee of success. Foreign companies moving into the Finnish economy typically choose a limited liability subsidiary known as an osakeyhtiӧ, although another option is to set up a branch office (sivuliike). A subsidiary in Finland is a legal entity and it is entirely independent of the foreign parent company. It is incorporated as a local company and regulated by the Companies Act.

Once the subsidiary is legally established, other crucial factors must be dealt with. Tax processing, filing accounts, legal compliance, workforce management, payroll and recruitment add up to a hefty workload.

You can lighten the burden by teaming up with Bradford Jacobs. Our Professional Employer Organization (PEO) and Employer of Record (EOR) networks locate the finest local talent and administer your payroll in Finland – speedily and risk free. Your company will be up-and-running in days rather than weeks or even months.

Instead of the costs, delays, and complications of going solo, use our services and be up-and-running with a presence in your new territory within days, rather than months.

How to set up a Finland Subsidiary

  • Decide on the company type that suits the nature of your business and your goals. The most common choice for a foreign business to establish a subsidiary is the Private Limited Liability Company (osakeyhtiӧ). Other choices are a Public Limited Liability Company (julkinen osakeyhtiö-Oyj), General Partnership (avoinn yhtiӧ), Limited Partnership (kommandiittiyhtiӧ) or a Branch Office (sivuliike).
  • Choose a company name, unique to Finland, which must include the suffix ‘oy’ for a private limited liability company.
  • There is no requirement for minimum share capital. If there is share capital, it must be paid before registration.
  • Prepare incorporation documents, which include a Memorandum of Association, Articles of Association and Trade Register Notification. Fees for basic statutory documentation range between €2,500 and €4,500 (US$2,950 and US$5,300). The Trade Register registration fee is €380 (US$450) or €275 (US$325).
  • File documents to the Trade Register and Central Tax Administration, which must be in Finnish or Swedish.
  • In addition to the Trade Register, companies must also enroll on various registers with the Tax Administration, including the VAT Register, Pre-Payment Register, Employer Register, and the Social Insurance Institution (Kela).
  • Obtain a 12-digit tax number for employees and tax card.

Application and Fees

A company is legally established when it is enrolled on the Trade Register and the process usually takes around 14 days. As most services are digitized, companies need to apply for a e-Authorization or give authorization to an accounting firm.

It is not mandatory to have an in-country bank account. Salaries can be paid from outside Finland, provided the client has a Finnish bank account. A bank account is required for companies issuing share capital.

What you need to set up a Finland Subsidiary

Foreign companies setting up a subsidiary in Finland must meet certain requirements under the Companies Act. These include:

  • Agreement on association from the parent company, with board members details and shareholders’ initial contributions
  • Minutes of the parent company’s meeting confirming the decision to open a subsidiary
  • Open a bank account; only mandatory if there is share capital
  • Articles of Association, which must include company name and area of business
  • Trade Register notification and receipt of payment

The above documents can be filed electronically

Additional requirements for registration include:

  • One board member needs a Finnish internet bank account to facilitate Know Your Customer checks.
  • Company name for a private limited liability company must include suffix ‘oy’ or (osakeyhtiӧ), meaning limited company.
  • All companies in Finland must register with the Trade Register before incorporation.
  • Companies must also enroll on various registers with the Tax Administration including the VAT Register, Pre-Payment Register, Employer Register and with the Social Insurance Institution (Kela).
  • Board members do not need to be Finnish citizens and if at least one is a European Economic Area (EEA) resident no extra permit is needed. The managing director must be an EEA resident, if not a separate permit is required.

Benefits of setting up a Finland Subsidiary

Finland offers many attractions for companies looking to set up a subsidiary, including a robust private sector backed by a well-educated and skilled workforce. The business-friendly administration has created one of the world’s most accessible and welcoming economies for foreign investment.

By establishing a subsidiary, the parent company can explore the potential of the Scandinavian and wider European markets, while boosting the credibility of its own international profile. Finland enjoys a high international profile as a member of the European Union, European Economic Area, the Organization for Economic Cooperation and Development, the World Trade Organization, and the Nordic Council.

Benefits include:

  • The subsidiary is a separate legal entity to the parent company, able to operate under its own business name and pursue independent business activities.
  • As of January 2021, the parent company can deduct the losses of a subsidiary from its own tax liabilities, if it owns at least 90% of the subsidiary.
  • Foreign companies operating in certain locations may be eligible for EU-financed incentives focused on small and medium business enterprises (SMEs) and information and communication tech companies.
  • Generally, the parent company has no responsibility for the debts or liabilities of its subsidiary beyond the investment of their shareholding.
  • The parent company’s financial statements and account are not required to be filed with the Finnish tax authorities.

Finland Subsidiary Laws

Companies expanding into Finland will typically set up a private limited liability company, although a public limited liability company is another option but far less common choice. Finland’s Companies Act requires certain procedures are followed, such as:

Registration and Documentation:

  • A Limited Liability Company requires between one and five directors and one shareholder for incorporation. If fewer than three, there must be one named deputy.
  • A Private Limited Liability Company (osakeyhtiӧ) requires no share capital. A Public Limited Liability Company (julkinen osakeyhtiö-Oyj) needs €80,000 (US$94,400).
  • The managing director of a subsidiary must be a European Economic Area resident. If not, they require a specific permit to take on the role.
  • All entities must be enrolled on the Trade Register.
  • Entities must be registered with the following bodies before they can begin their commercial activities: the Central Tax Administration, VAT Register, Pre-Payment Register, Employer Register, and the Social Insurance Institution (Kela).
  • The entity’s Articles of Association must include the company name and area of business, names and details of shareholders, and their contributions.

Accounts and Taxation:

  • Entities are subject to 20% Corporation Tax on their worldwide income; shareholders pay tax on distributed profits.
  • Registration with the Central Tax Administration to receive seven-digit Business Identity Code (YTJ).
  • Corporate Tax returns must be filed by May 31, with monthly VAT filing and payments made by the 12th of the following month.
  • Finland corporations apply withholding tax of 20% and 15% on to certain types of payments to foreign companies. They also apply a withholding tax of 30% to non-residents on income relating to Finnish-sourced dividends, interest, and royalties.


  • Management board meetings are not legally required in Finland.
  • No separate permit will be required from the Trade Register if the management are residents in the European Economic Area (EEA).
  • The managing director must be an EEA resident, or an extra permit is required.

Take a faster route into Finland’s economy

The cost-effective and time-saving alternative to the expensive and lengthy process of establishing your subsidiary in Finland is to work alongside a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs.

We have over 20 years of global experience and our in-country specialists and Human Resources experts will steer you through the complexities of setting up operations by onboarding new employees, then ensuring compliance with all employment and tax regulations.

There is no reason for international borders to stand in the way of your international expansion. Contact us today to make your expansion goals a reality, with ease and confidence.