2. 1. Setting up a business in Finland
These days setting up a business in Finland is very
easy. All it really requires is a great plan, get
licenses and send papers to a registry that allows
you to start billing people for your services. Two
the most simple (and easiest) ways of setting up a
business are:
● Tmi (sole trader/private enterprise)
● Ay (open company)
● Ky (limited partnership)
● Oy (limited company)
● Osuuskunta (cooperative)
3. Private enterprise
A great example of a private
enterprise would be a high school
graduate’s car washing business. What
a private enterprise is usually done for
is to only provide the creator of the
enterprise. It is often for people who
will have low
4. annual revenue. It is also easy to shut down the enterprise if it’s not going well. The
biggest risks for being the owner of a private company are the finances as they’re
personally involved with their money.
If there are more than one person wanting to work together and start up a business,
is creating an Oy (a limited company). The real capital needed to set up a business
has been lowered in the recent years from 8000 euros to 2500 euros in order to
encourage people to be innovative and set up businesses to help the economy in
Finland. One can basically create a limited company online if they wish to do so.
Commercial banks in Finland require 20% of the finances to come from the
entrepreneur themselves before getting a loan. There are also special loans and
start-up grants to make the financial state better for a business in the beginning.
5. The government also assists international companies to find different companies
in Finland to which they can invest in, thus helping the Finnish companies to
evolve and find new challenges as a lot of companies usually fail in the first few
years due to financial issues.
A popular form of entrepreneurship is to work as a franchisee. Popular choices
are restaurants of different kinds, kiosks and clothing stores. The basic idea of a
franchising business is to duplicate an idea (such as Subway).
6. Partnership (avoin yhtiö)
A partnership is formed when two or more
individuals agree to it by signing a
partnership agreement. The partners have
equal status in all the company’s
operations and are personally responsible
for company decisions, liabilities and
debts.
Limited partnership
(kommandiittiyhtiö)
A limited partnership differs from an
ordinary partnership in that in addition to
one or more accountable partners there is
at least one sleeping partner, i.e. a
participant in the company who generally
acts as an investor.
Cooperative association
(osuuskunta)
Cooperative association is a
company owned by its members.
There can be one or several
members. Each member has one
vote in cooperative association
meetings. The liability of the
members for the cooperative
association’s obligations (for
example, debts) is limited to their
investment of share capital.
Other Company Forms
7. Income taxation for companies &
organisations
● Income tax = Annual charge levied on earned income (wages) and unearned
income (interest, rents)
In Finland the corporate tax rate is 20%. They have to pay the tax unless the said
company is deemed an association or a foundation that promotes for the public
good, they’ll only be taxed for business income or income that derives from real
property.
If there’s a case of a self-employed professional individual, a self-employed business
entrepreneur or a general or limited partnership, the profits are fully taxable as
income.
8. Business culture
Finnish people generally like to use
their time effectively and that’s why
they like creating timetables. A normal
working day starts around 8 a.m. and
ends in the afternoon between 4-6
p.m. Lunch is usually enjoyed around
midday and have two coffee breaks
during the day. Coffee is often
provided in business meetings (and
everywhere, basically).
9. The Finns appreciate punctuality and
arriving early in everything, especially
when it comes to business meetings.
When arriving to a meeting, it is normal
for Finnish people to have eye contact
and greet each other with a handshake.
Also it’s good to know that Finland is not
a corrupted country so any gifts or bribes
should not to be offered to officials or
business partners. However little things
like christmas cards or small gifts, such as
flowers are allowed.
