Finland is one of the easiest countries in the world to start a business. Here is how the process works, from registration to taxes.
The most common business forms in Finland are: sole trader (toiminimi, simplest), limited liability company (osakeyhtiö or Oy, most common for growth businesses, minimum share capital 2500 euros), partnership (avoin yhtiö), and cooperative (osuuskunta). For most immigrants starting a business, a sole trader or limited company is the best choice.
Register your business at PRH (Finnish Patent and Registration Office) and the Tax Administration simultaneously using a single form at ytj.fi. You will receive a Y-tunnus (business ID) within a few days. Registration costs about 60 euros for a sole trader and 240 euros for a limited company. The entire process can be done online.
Non-EU citizens need a special entrepreneur residence permit from Migri. The application is assessed by the Centre for Economic Development (ELY Centre), which evaluates the viability of your business plan. EU citizens can start a business freely. Having a Finnish business ID does not automatically grant you a residence permit.
Finnish corporate tax rate is 20 percent. Sole traders pay income tax on their profits at progressive rates. VAT (arvonlisävero) is 25.5 percent for most goods and services and must be charged if your annual revenue exceeds 15,000 euros. You must keep proper accounting records. Hiring a bookkeeper (kirjanpitäjä) is highly recommended and costs around 100 to 300 euros per month for small businesses.
Entrepreneurs must arrange their own pension insurance (YEL insurance) and are eligible for entrepreneur unemployment insurance through a dedicated fund. YEL contributions are based on your estimated income and typically cost 18 to 25 percent of your declared earnings. You are also eligible for Kela benefits and healthcare like any resident.
Finland offers excellent support for entrepreneurs: Business Finland provides grants and advice for innovative companies, ELY Centres offer free business counselling, TE Services provides a startup grant (starttiraha) of about 37 euros per day for up to 12 months, and NewCo Helsinki and other city-level organisations offer free mentoring and workspace. Startup-säätiö and other foundations offer grants for early-stage companies.
Common mistake
Forgetting to arrange YEL pension insurance. It is legally required for entrepreneurs and failing to arrange it can result in back-payments and penalties.
Good to know
Finland consistently ranks among the top 3 countries in the world for ease of starting a business. The entire registration process can be completed online in one day.