Finland, a Nordic country renowned for its stable economy, innovation, and transparent governance, offers a thriving environment for entrepreneurship. Whether you’re a local resident or an international investor, launching a business in Finland presents rewarding opportunities. From its supportive policies to its skilled workforce, Finland is an ideal destination. Here’s a comprehensive guide to navigating the process.
Why Start a Business in Finland?
With a well-established infrastructure, educated workforce and supportive business ecosystem, Finland is ranked among a list of countries which are easy to do business. Several Key advantages include:
- Stability: Politically and economically stable, Finland offers a continuity and predictability that supports a country’s business. Visit this site to learn more about starting business in Finland.
- Innovation: Finland is set up as a leader in highly innovative industries, in particular ICT, clean energy and healthcare.
- Support Systems: There are grants, startup visas, and incubators to take advantage of, among other government initiatives, which help entrepreneurs.
Types of Business Structures in Finland
Whether you are just about to start a small business or have already started one and your business structure is chosen, you must make sure that they chose the right business structure because they impact a lot on taxation, liability, and matters of operations. The common types of Business Structures in Finland are:
- Private Entrepreneur (Sole Trader): It’s a great fit for small businesses with low risk whose responsibility is one individual.
- Limited Liability Company (Osakeyhtiö, Oy): This structure is ideal for larger ventures as owners’ liabilities will be limited to their investment.
- General or Limited Partnership: It consists of two or more individuals or entities who share profits and responsibilities.
- Branch of a Foreign Company: It’s a good niche for international companies who want to enter Finland.
Steps to Start a Business in Finland
Here are the important steps on how to start a business in Finland:
- Business Idea and Plan:
- Start with a well-researched business idea.
- With your business plan, show you what you would like to achieve, the segment of market that you are targeting, what funding is required and how you will operate the business.
- Choose a Business Name:
- Name should be unique and conforming to Finnish regulations.
- The name is reserved through the Finnish Patent and Registration Office (PRH).
- Register Your Business:
- Businesses are obliged to register with PRH and the Finnish Tax Administration.
- Registration will require a personal identity code which entrepreneurs from abroad can get when applying for a residence permit or a startup visa.
- Obtain Necessary Permits:
- Special permits are necessary for some industries, such as food services and transportation. Based on the type of your business, check regulatory requirements.
- Open a Bank Account:
- Open a business ‘bank account’ in Finland to sort money and keep capital running.
- In Oy’s case, you will need to deposit the maximum minimum share capital (€2,500) into the account.
- Arrange Financing:
- Get funding through bank loans, government grants, or private investors.
- Startups can avail financial aid and advice from TE services (Employment and Economic Development Offices).
- Understand Tax Obligations:
- If your turnover is greater than €15,000, you become obliged to register for VAT.
- Learn the corporate tax rates (currently 20%) and other taxes to which any company is applicable.
- Hire Employees:
- Finland has fair working conditions because of its labor laws. Besides that, regulations about contracts, wages and social security contributions must be adhered to.
Challenges to Consider
While Finland offers numerous advantages, entrepreneurs should be prepared for potential hurdles and challenges:
- High Cost of Living: That can be quite expensive, especially in cities like Helsinki.
- Language Barrier: It’s not all Finns speak English, but learning Finnish or Swedish can be useful for network building.
- Regulatory Complexity: Foreign entrepreneurs may find themselves needing professional understanding of Finnish regulations.
Support for Entrepreneurs
The resources available to help a new business on how to start a business in Finland are extensive, with options for every culture succeeding. Business Finland and Finnvera give financial aid, networking, and mentoring. The Startup Grant is another great source of finances, covering your monthly expense for a period of 18 months.
The Finnish Startup Permit allows for residency for those international entrepreneurs who are planning to set up innovative businesses in Finland.
Conclusion
Starting a business in Finland is an exciting opportunity to tap into a dynamic and innovative market. By understanding the local business environment, complying with rules and regulations, and leveraging available resources, you can successfully establish and grow your venture. With its supportive ecosystem and global connections, Finland is a promising destination for starting and seasoned entrepreneurs.