How to Set Up an Entity in Finland

Establishing a legal entity in Finland presents a compelling opportunity for businesses looking to access the Nordic region, the wider EU single market, and a stable regulatory environment. With a strong reputation for transparency, rule of law, and a skilled workforce, Finland can serve as an excellent base for regional operations, research and development hubs, and export-oriented businesses.

The process is relatively straightforward compared to many jurisdictions, thanks to digital registration tools and efficient agencies, though attention to local corporate, tax, and employment obligations remains critical. Key challenges include navigating Finnish languages (though most services support English), meeting board/residency requirements, and staying on top of payroll/social security compliance. On the upside, benefits include 100% foreign ownership, no minimum share capital (for private limited companies), a competitive corporate tax rate, and limited liability.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Finland?

In Finland “opening an entity” means registering a locally-incorporated company (usually a private limited liability company) or establishing a branch or subsidiary of a foreign company, which gives the business a legal presence—its own “Business ID” (Y-tunnus), the ability to open bank accounts, sign contracts, hire employees, and be subject to Finnish corporate and tax law.

Entity overview in Finland

Below is a snapshot of the key parameters when setting up an entity in Finland, with emphasis on the structure most commonly used by foreign investors: the private limited liability company (osakeyhtiö, or Oy).

Step-by-step guide: How to open an entity in Finland

Step 1: Choose the right structure

For Finnish citizens and residents, the most common structure is a private limited company (Oy), which provides limited liability and straightforward management. Foreign investors typically choose the same option for full ownership and control over local operations. A branch of a foreign company is another possibility, but it can expose the parent company to liability. A public limited company (Oyj) is generally suited to larger enterprises planning to list shares or raise significant capital. The Oy structure remains ideal for startups, SMEs, and service businesses thanks to its flexibility, easy setup, and no minimum capital requirement.

Step 2: Verify business name availability

Before registration, you need to check that your proposed company name is available in the PRH. Naming restrictions include ensuring the name is not misleading, reserved by another entity, and ends with “Oy” (for a private limited company) or “Oyj” (for a public limited company).

Step 3: Prepare incorporation documents

You will need to assemble these key documents before submitting your startup notification:

• Memorandum of Association (for Oy)
• Articles of Association establishing the company rules
• Notification of new enterprise (start-up notification) via the YTJ portal
• Identification documents of shareholders/directors and proof of registered office in Finland
• If registering a branch of a foreign company, a power of attorney and a certificate of incorporation from the parent company's jurisdiction are required.

Step 4: Register with PRH

Submit the startup notification via the YTJ-Business Information System (electronic registration is preferred). The PRH will process the application, and once approved, you will receive a business ID (“Y-tunnus”), registration certificate, and access rights to file in the Trade Register. After registration, your entity is legally formed and may start operations.

Step 5: Register for tax and social security

Once your company is registered, you must register with the Finnish Tax Administration (Vero) for corporate income tax, VAT (if applicable), and employer prepayment register, and social security contributions. Registration may be done via YTJ at the same time as company formation. Foreign companies establishing a Finnish entity or branch should consider whether they will have a permanent establishment in Finland and what their tax residency status may be.

Step 6: Open a corporate bank account

Opening a Finnish bank account is advisable for local operations. Most banks will require the business ID, articles, board resolution, identification of signatories, and may request a Finnish resident director or proof of substantial activity. Practical timelines vary from a few days to a couple of weeks, depending on the bank and the complexity of the structure. While you technically can operate somewhat using foreign banking relationships, having a local account simplifies payroll, VAT refunds, and payments.

Step 7: Set up payroll and employment compliance

If you plan to hire employees in Finland, you must register as an employer with Vero and the Finnish Centre for Pensions (ETK) or local pension insurance institutions. Employers are also responsible for paying unemployment-insurance contributions to the Employment Fund (Työllisyysrahasto) and health-insurance contributions, which the employee and employer jointly fund through Kela, Finland’s national social-security institution.

Employers must also ensure employment contracts conform to Finnish law (including working hours, paid leave, and collective bargaining where applicable), set up payroll withholding for income tax, employer contributions, and pension/social security contributions. Finnish labor law is well-developed, with strong employee protections and formal requirements, so setting up HR/payslip processes and maintaining records is critical.

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Post-registration obligations

After incorporation, companies in Finland must stay compliant with local governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File corporate income tax returns annually with the Finnish Tax Administration and file VAT returns (typically monthly or quarterly, depending on turnover). Financial statements (balance sheet, profit & loss) must be submitted to the Trade Register.
• Corporate registers: Maintain up-to-date records of directors, shareholders, and beneficial owners and notify PRH/Trade Register of any changes in accordance with Finnish change-notification rules.
• Compliance tracking: Monitor deadlines for filings (annual accounts, tax returns, social security) and use a compliance calendar or service provider to avoid late filing penalties.
• Licenses and renewals: Depending on your industry, you may need trade permits or licenses (for example, manufacturing, healthcare, import/export). These must be renewed as required by the relevant ministry or municipality.
• Recordkeeping: Retain accounting, payroll, HR, and transaction records for the minimum period required under Finnish law (typically 6 years for accounting records).
• Employment law compliance: Adhere to labor, benefits, social security, and data-protection regulations — maintain compliant employment contracts, payroll reporting, benefits contributions, and insurance coverage on the intervals required by Finnish employment/social authorities.

Taxes and financial considerations

Here are the key tax and financial obligations to be aware of when operating a company in Finland:

• Corporate income tax: The rate is 20% on net profits for limited liability companies.
• VAT: The standard VAT rate is 25.5%. Reduced rates of 14% and 10% apply to certain goods and services. Registration for VAT is mandatory once turnover exceeds EUR 20,000 in a calendar year.
• Payroll/social contributions: Employers must withhold employee income tax, plus pay employer contributions for pensions, unemployment insurance, etc. (These vary depending on salary level and industry).
• Accounting standards: Finnish companies typically file under Finnish GAAP or EU-accepted frameworks; financial statements must be submitted to the Trade Register.

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Finland—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Finland?
The typical timeframe is around 1–3 weeks if using the electronic registration via YTJ and all documents are in order. Paper filings or foreign-director issues may extend this. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?

For a private limited company (Oy) in Finland, there is no mandatory minimum share capital. For a public limited company (Oyj), the minimum is EUR 80,000.

Can foreign companies own 100% of an entity in Finland?
Yes—foreign persons or companies may be 100% shareholders in a Finnish limited liability company.

Do I need a local director or representative?
At least one board member is required; if only one person is appointed, a deputy board member is required. The board members and managing director must be EEA residents, or the company must obtain permission from PRH if non-residents are appointed.

How much does it cost to register an entity?
Registration fees vary depending on whether you file electronically, use legal advisors, and the complexity of your setup (foreign directors, branch vs subsidiary). Expect registration service fees of several hundred euros plus any professional fees. Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no employment should begin once the entity is legally registered and employer registration is in place. However, if you wish to hire immediately, you can engage talent through an Employer of Record (EOR) such as Deel while your entity setup completes.

Can Deel help me open an entity in Finland?
Yes. Deel Entity Setup manages the end-to-end process—from registration to payroll compliance—in over 100 countries, including Finland.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.