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Setting up a Company in Finland


Finland has seen a surge in the number of new startups during the past decade. Having produced an impressive number of successful tech companies in recent years, such as Supercell and Rovio, investors and entrepreneurs alike are focusing on Finland in increasing numbers – but how easy is it to actually set up a company in Finland?

A Straightforward Process

The most popular business form in Finland is the private limited liability company (FIN: yksityinen osakeyhtiö, or “Oy” for short), which is very easy to set up. To incorporate an LLC, you need to submit three documents to the local trade register: (i) a memorandum of association, (ii) articles of association, and (iii) a startup notification. Currently the price for setting up a LLC is 380.00 EUR. In addition, a minimum share capital of 2,500.00 EUR is required. Shell companies are also readily available.

Planning Encouraged

Although setting up a company in Finland is easy, attention spent on the incorporation documents can save entrepreneurs a lot of headaches down the road. It is strongly encouraged to draft a shareholders’ agreement, which will establish the rights and of the company’s shareholders. Such an agreement can, for example, include non-compete and confidentiality clauses, which are especially important for startups since they often rely on unique business ideas. The shareholders can also agree in advance on issues relating to financing, potential exits and other major decisions. Although there are plenty of standard forms readily available, each agreement should be customized to fit the needs of the particular company and its founders.

Other Things to Note

A Finnish LLC should have a board of directors with at least one board member (and at least one deputy board member if the board has less than three ordinary members). If you want, you can appoint a managing director, but it is not compulsory. At least one board member should be resident in the European Economic Area (EEA), although an exemption can be applied for.

The Freedom of Trade Act (122/1919, FIN: laki elinkeinon harjoittamisen oikeudesta) grants both Finnish natural persons as well as persons resident in another EEA member state similar rights to engage in business. Registered branches of EEA entities are also entitled to carry on a business in Finland, but entrepreneurs should note that certain forms of public financing are limited to companies registered in Finland.

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