How To Start a Business in Finland: Complete Guide 2024

Starting a business in Finland can be daunting, especially when language barriers come into play. However, Finland’s commitment to internationalization and its welcoming approach to foreign entrepreneurs make it an ideal place to bring your business ideas to life.

Whether you are looking to tap into the vibrant tech scene, explore the renewable energy sector, or bring something entirely new to the market, this guide is designed to provide you with clear, informative steps to help you navigate the process of starting your business in Finland.

Understanding the Finnish Business Environment

Embarking on your entrepreneurial journey in Finland begins with a deep dive into the country’s unique business environment. Known for its innovation, Finland provides a robust platform for startups and established businesses alike. Here’s what you need to know to thrive in this dynamic setting.

Key Industries and Emerging Sectors

Finland’s economy is diverse, with several key industries driving growth and innovation. Technology, especially information and communication technology (ICT), plays a pivotal role, thanks to the country’s strong digital infrastructure. Other significant sectors include clean technology, biotechnology, and the renewable energy sector, reflecting Finland’s commitment to sustainability and innovation. Additionally, the gaming industry, along with health and wellness technologies, are emerging as exciting areas for entrepreneurs looking to make a mark.

Business Culture in Finland

Understanding and adapting to the business culture in Finland is crucial for your success. Finnish business practices are characterized by transparency, reliability, and equality. Punctuality is highly valued in meetings and negotiations, reflecting the overall emphasis on efficiency and respect for others’ time. Decision-making tends to be consensual, with a focus on long-term relationships rather than short-term gains. Additionally, the Finnish market values sustainability and ethical business practices, aligning with the country’s overall commitment to environmental responsibility.

Innovation and Support Systems

Finland’s innovative ecosystem is supported by a comprehensive network of organizations designed to support startups and entrepreneurs. Tekes (the Finnish Funding Agency for Innovation) and Business Finland are two key institutions that provide funding, advice, and networking opportunities to help new businesses grow. The country’s focus on research and development (R&D) is evident in its investment in these areas, making it an ideal environment for innovation-driven enterprises.

Ease of Doing Business

Finland ranks highly in global indexes for ease of doing business, thanks to its transparent and efficient regulatory environment. Starting a business here involves straightforward procedures, and the government offers various digital services to simplify the process. The Finnish legal system is reliable and protects the rights of entrepreneurs and investors, ensuring a stable foundation for your business endeavors.

Legal Requirements and Business Registration

Taking the first official steps towards establishing your business in Finland involves navigating through legal requirements and registration processes. While this might sound complex, Finland’s system is designed to be straightforward and supportive for entrepreneurs, including those from abroad. Here’s what you need to know to get your business off the ground legally and efficiently.

Business Type	Description	Suitable For
Sole Proprietorship (toiminimi)	Individual entrepreneurs operating a business.	Individuals starting a small business alone.
Partnerships (AY/KY)	General and limited partnerships for shared business operations.	Businesses operated by more than one individual, sharing profits and responsibilities.
Limited Liability Company (OY)	A company with shareholders, offering limited liability.	Entrepreneurs looking to scale, require funding, or limit personal liability.
Cooperative (osuuskunta)	A business owned and operated by a group with a common interest.	Groups collaborating on business ventures with shared benefits.

Choosing a Business Type

First, determine the type of business entity that best suits your venture. Finland offers several forms, including:

• Sole Proprietorship (toiminimi): Ideal for individual entrepreneurs.
• Partnerships: Comprising general partnerships (avoin yhtiö, AY) and limited partnerships (kommandiittiyhtiö, KY).
• Limited Liability Company (osakeyhtiö, OY): Suitable for businesses that require external funding or aim to scale.
• Cooperative (osuuskunta): Best for businesses operated and owned by a group with a common interest.

Each business type has its regulations, tax implications, and requirements, so choose the one that aligns with your business goals and structure.

Registration Process

Once you’ve chosen your business type, the next step is registration. The process typically involves:

• Preparation of Necessary Documents: Depending on your business type, this may include a business plan, articles of association, and a memorandum of association for limited liability companies.
• Application to the Finnish Trade Register: Essential for legal operations, the Trade Register provides credibility and allows your business to engage in commercial activities.
• Obtaining a Business ID: Upon registration, you’ll receive a Business ID, which is used in all transactions and communications with authorities and partners.

Legal Documents and Where to Obtain Them

• Finnish Patent and Registration Office (PRH): The primary source for registering your business and obtaining necessary legal documents.
• Tax Administration: For tax-related registrations, including VAT and employer registrations.

Banking and Financial Registrations

Opening a business bank account is an integral step in setting up your business finances. Choose a bank that offers services tailored to businesses, and be prepared to provide your Business ID and other required documents.

Understanding the Finnish Trade Register

The Finnish Trade Register is a public database that contains information about businesses operating in Finland. Registration is mandatory for most businesses and is crucial for transparency, trust, and legal compliance.

Financial Considerations When Starting a Business in Finland

As you embark on your entrepreneurial journey in Finland, understanding the financial landscape is crucial for the sustainability and growth of your business. From taxation to funding, managing your finances effectively is key to navigating the Finnish business environment with confidence.

Finnish Taxation System for Businesses

The Finnish taxation system is known for its transparency and fairness. Depending on your business structure, you will be subject to different tax obligations:

• Corporate Income Tax: Limited liability companies and other corporate entities are taxed on their profits. Finland’s corporate income tax rate is competitive, designed to support business growth.
• Value Added Tax (VAT): Most goods and services sold in Finland, as well as goods imported into Finland, are subject to VAT. Registering for VAT is mandatory for businesses exceeding a certain annual turnover, but voluntary registration can also be beneficial.
• Personal Income Tax: If you’re operating as a sole proprietor, your business income will be taxed as personal income, with rates varying based on the amount.

Understanding these taxes and planning for them is essential. Utilize accounting software or consult with a tax professional to ensure compliance and optimize your tax situation.

Managing Business Finances

Effective financial management is the backbone of any successful business. Here are some key considerations:

Open a Business Bank Account: Separating personal and business finances is crucial. Choose a bank that offers services beneficial to your business, such as online banking, loans, and financial advice.

Bookkeeping and Accounting: Accurate record-keeping is not only a legal requirement but also essential for monitoring your business’s financial health. Consider hiring an accountant or using accounting software tailored to small businesses.

Grants and Funding Options

Finland offers a supportive ecosystem for startups and businesses, with various funding options available:

• Government Grants and Loans: Business Finland, for instance, provides financing for innovative startups, research and development projects, and internationalization efforts.
• Venture Capital and Angel Investors: The Finnish startup scene is vibrant, with numerous investors looking to support promising ventures.
• Crowdfunding: Platforms like Invesdor allow businesses to raise funds by engaging the community and potential customers.

Additional Financial Resources

Startup Incubators and Accelerators: These programs often provide seed funding, mentoring, and networking opportunities to help your business grow.

EU Funding: As a member of the European Union, businesses in Finland can access various EU funding programs aimed at innovation, research, and development.

Finding a Location and Setting Up Your Business

Selecting the right location and setting up your business premises are pivotal steps that can significantly impact your venture’s success in Finland. Whether you are opening a physical store, an office, or operating online, making informed decisions during this phase will pave the way for your business’s growth and customer reach.

Considerations for Choosing a Business Location

Market Accessibility: Identify where your target customers are located and ensure your chosen location is accessible to them. Proximity to customers can influence your business’s visibility and foot traffic.

Competitor Analysis: Evaluate the presence of potential competitors in the area. A location with fewer competitors may offer a strategic advantage, but a certain level of competition can also signify a healthy market demand.

Infrastructure and Logistics: Access to essential infrastructure, including transportation, internet connectivity, and logistics services, is crucial, especially for businesses that rely on shipping and receiving goods.

Costs: Consider the cost of renting or buying property in your chosen location. Balancing affordability with strategic placement is key to managing your finances effectively.

Setting Up a Physical or Online Store

Physical Store Setup: For entrepreneurs opening a physical store or office, compliance with local regulations regarding signage, accessibility, and safety is essential. Create a welcoming environment that reflects your brand and meets the needs of your customers.

Online Business Presence: If you are operating an online business or looking to complement your physical store with an online presence, setting up a professional website and utilizing social media platforms are critical steps. Ensure your online store is user-friendly, secure, and optimized for search engines to attract and retain customers.

Legal and Regulatory Compliance

Permits and Licenses: Depending on your business type and location, you may need specific permits and licenses to operate legally in Finland. Check with local authorities and the Finnish Patent and Registration Office to ensure compliance.

Health and Safety Regulations: Businesses, especially those in the food service, childcare, and healthcare sectors, must adhere to strict health and safety regulations. Familiarize yourself with these requirements to protect your customers and employees.

Utilizing Technology and Innovation

Embracing technology can significantly enhance your business operations, whether through advanced point-of-sale systems, inventory management software, or digital marketing tools. Finland’s strong ICT sector offers a wealth of resources and services to help businesses innovate and stay competitive.

Employing Staff in Finland

As your business in Finland begins to grow, you may find the need to hire staff to expand your operations and enhance your offerings. Employing staff in Finland comes with its own set of guidelines and regulations designed to protect both employers and employees. Understanding these rules will ensure a smooth hiring process and a productive working environment.

Guidelines for Hiring Employees

Work Permits and Visas: For non-EU citizens, ensure that potential employees have the necessary work permits or visas to work legally in Finland. The Finnish Immigration Service (Migri) is the authority responsible for issuing these documents.

Contracts of Employment: In Finland, it’s mandatory to provide a written contract of employment for each employee. These contracts should detail the terms of employment, including job description, salary, working hours, and notice periods. Tailoring contracts to meet both legal requirements and your business needs is crucial for clarity and fairness.

Understanding Labor Laws and Workers’ Rights

Working Hours and Overtime: Familiarize yourself with the regulations governing working hours, overtime compensation, and mandatory breaks to ensure compliance and promote a healthy work-life balance for your employees.

Leave Entitlements: Employees in Finland are entitled to annual leave, parental leave, and sick leave, among other forms of leave. Understanding these entitlements is essential for planning and operational efficiency.

Equality and Non-Discrimination: The Finnish workplace is governed by strong principles of equality and non-discrimination. Employers must ensure a safe and inclusive environment for all employees, regardless of their background, gender, age, or other personal characteristics.

Employee Benefits and Welfare

Social Security: In Finland, employers are required to contribute to the social security of their employees. This includes pension contributions, unemployment insurance, and health insurance. These contributions are an essential part of the social welfare system, providing security for employees and their families.

Additional Benefits: To attract and retain talent, consider offering additional benefits beyond the statutory requirements. These can include health care benefits, performance bonuses, or flexible working arrangements. Tailoring benefits to meet the needs and preferences of your workforce can significantly enhance job satisfaction and loyalty.

Creating a Positive Workplace Culture

Integration and Onboarding: A well-structured onboarding process is crucial for integrating new employees into your team. Provide clear information about job roles, company culture, and expectations to help new hires adjust smoothly.

Professional Development: Investing in the professional development of your employees not only benefits them individually but also contributes to the growth and innovation of your business. Offering training opportunities and career advancement paths can foster a motivated and skilled workforce.

Marketing Your Business

In today’s competitive landscape, effectively marketing your business is crucial to attracting and retaining customers in Finland. With the right strategies, you can increase your visibility, engage with your target audience, and build a strong brand reputation. Here are actionable steps to help you achieve these goals.

Understanding Your Target Audience

• Research and Insights: Begin by gaining a deep understanding of your target audience. What are their needs, preferences, and behaviors? Utilizing market research and customer insights can inform your marketing strategies and ensure they resonate with your audience.
• Segmentation: Consider segmenting your market to tailor your marketing efforts more precisely. This approach allows for more personalized communication and can significantly improve the effectiveness of your campaigns.

Digital Marketing Strategies

• Website and SEO: In the digital age, a professional website is a must-have for any business. Ensure your site is user-friendly, mobile-optimized, and updated with relevant content. Implementing search engine optimization (SEO) techniques will improve your visibility on search engines, making it easier for potential customers to find you.
• Social Media Presence: Establishing a strong presence on social media platforms can greatly enhance your brand’s reach. Choose platforms where your target audience is most active and engage with them through regular posts, stories, and interactive content.
• Content Marketing: Creating valuable content that addresses the needs and interests of your audience can help establish your business as a thought leader in your industry. Blogs, videos, infographics, and podcasts are effective ways to attract and engage your audience.

Traditional Marketing Techniques

• Networking and Events: Participating in local business events, trade shows, and networking meetups can increase your visibility and create opportunities for partnerships and customer acquisition.
• Print and Media Advertising: Depending on your target market, traditional advertising methods such as newspapers, magazines, and radio can be effective in reaching certain demographics.

Measuring Success and Adjusting Strategies

• Analytics and Feedback: Utilize analytics tools to track the success of your marketing campaigns. Metrics such as website traffic, conversion rates, and social media engagement can provide insights into what’s working and what’s not.
• Customer Feedback: Encourage feedback from your customers to understand their experience with your brand. This valuable information can help you refine your marketing strategies and improve customer satisfaction.

Building Relationships and Trust

• Consistency: Ensure your branding and messaging are consistent across all marketing channels. Consistency builds recognition and trust with your audience.
• Community Engagement: Engage with your local community through sponsorships, events, or charity initiatives. This not only increases your brand’s visibility but also demonstrates your commitment to social responsibility.

Networking and Support Systems

Building a successful business in Finland involves more than just hard work and a solid business plan; it also requires connecting with the right people and utilizing available support systems. Networking and leveraging support services can provide valuable insights, resources, and opportunities to help your business thrive. Here’s how to make the most of these resources.

Leveraging Local Entrepreneur Networks

Finland is home to numerous business associations and chambers of commerce that offer networking opportunities, industry insights, and resources for entrepreneurs. Membership in these organizations can open doors to partnerships, mentorship, and potential clients.

Regularly attend industry seminars, workshops, and networking events. These gatherings are invaluable for meeting fellow entrepreneurs, sharing experiences, and learning from others’ successes and challenges.

Utilizing Support and Advisory Services

Business Finland: This government organization offers a wealth of resources for businesses, including advisory services, innovation funding, and internationalization support. Their programs are designed to help businesses of all sizes grow and succeed.

Enterprise Agencies: Local enterprise agencies provide support for startups and small businesses, offering services like business counseling, training programs, and assistance with financial planning.

Engaging in Mentorship Programs

Finding a Mentor: Experienced business mentors can offer guidance, advice, and support as you navigate the complexities of starting and growing your business. Look for mentorship programs through business associations, incubators, or dedicated platforms connecting entrepreneurs with mentors.

Peer-to-Peer Networks: Engaging with peer-to-peer networking groups can be highly beneficial. These networks allow entrepreneurs to share experiences, challenges, and solutions in a supportive environment.

Accessing Incubators and Accelerators

Startup Incubators: Incubators support early-stage startups by providing resources such as office space, administrative services, and access to financing. Being part of an incubator can significantly jumpstart your business’s growth.

Accelerator Programs: For businesses ready to scale, accelerator programs offer intensive support, including mentorship, education, and access to investors. Participating in an accelerator can be a game-changer for growing businesses.

Nurturing Online Communities

Digital Networking: In today’s digital age, online forums, social media groups, and professional networking sites offer additional avenues to connect with like-minded entrepreneurs and industry experts. Engaging in these online communities can provide support, advice, and visibility for your business.

Continuous Learning and Development

Educational Resources: Take advantage of workshops, online courses, and seminars to continuously enhance your business acumen and stay updated on industry trends. Lifelong learning is key to adapting and innovating in a dynamic business environment.

Adapting to Finnish Business Culture

Thriving in Finland’s business environment requires an understanding of the local culture and practices. Finnish business culture is characterized by transparency, efficiency, and a high regard for work-life balance. Adapting to these aspects can significantly enhance your interactions and success in the Finnish market. Here are key considerations to help you navigate and embrace Finnish business culture.

Emphasizing Transparency and Trust

• Clear Communication: Finnish business communication is direct and straightforward. Clarity in your dealings will build trust and respect among your Finnish counterparts.
• Honesty and Integrity: Honesty is highly valued in Finland. Ensure that your business practices reflect integrity and transparency at all times.

Valuing Punctuality and Efficiency

• Time Management: Punctuality is a cornerstone of Finnish business etiquette. Arriving on time for meetings and respecting deadlines demonstrates professionalism and respect for others’ time.
• Efficiency in Meetings: Business meetings in Finland are well-organized and to the point. Agendas are usually followed closely, with an emphasis on making efficient use of time.

Fostering Equality and Inclusivity

• Flat Hierarchies: Finnish companies often operate with flat organizational structures, where everyone’s input is valued, and decision-making is collaborative.
• Promoting Work-Life Balance: Finland is renowned for its focus on work-life balance. Respect for personal time and flexibility in work arrangements can contribute to a positive and productive workplace.

Understanding the Importance of Consensus

• Collaborative Decision-Making: Decisions in Finnish businesses are often made through consensus. Being open to discussion and considering various viewpoints can facilitate smoother decision-making processes.
• Patience and Persistence: Reaching consensus may take time, but it ensures that decisions are well-thought-out and have broad support.

Adapting to Language and Communication Styles

• Language Skills: While English is widely spoken in the Finnish business community, learning some Finnish can be beneficial for personal interactions and shows respect for the local culture.
• Non-Verbal Cues: Pay attention to non-verbal communication. Finns may be more reserved, so observing subtle cues in body language and tone can enhance understanding and rapport.

Networking and Building Relationships

• Long-Term Relationships: Finnish business culture values long-term relationships. Invest time in getting to know your business partners and colleagues, as trust and familiarity are key to successful collaborations.
• Networking with a Purpose: Leverage networking opportunities to build genuine connections. Finnish professionals value meaningful interactions over superficial exchanges.

Regulatory Compliance and Continued Growth

Ensuring regulatory compliance and focusing on continued growth is critical for the longevity and success of your business in Finland. The Finnish business environment is supportive and structured, designed to foster innovation and growth while maintaining high standards of compliance and ethics. Here’s how to navigate regulatory compliance and set your business on a path of sustained growth.

Staying Compliant with Finnish Laws and Regulations

Regular Updates on Legislation: Stay informed about changes in legislation that affect your business. Finnish authorities frequently update regulations to reflect economic conditions, technological advancements, and social priorities. Utilizing resources like the Finnish Patent and Registration Office (PRH) and Business Finland can help you stay updated.

Environmental Compliance: Finland places a strong emphasis on environmental protection and sustainability. Ensure your business operations comply with environmental laws and consider adopting green practices that go beyond compliance to enhance your brand and contribute to sustainability.

Data Protection and Privacy: Adhering to the General Data Protection Regulation (GDPR) is essential for businesses operating in Finland and the EU. Implement robust data protection measures to safeguard customer information and maintain trust.

Fostering Innovation for Growth

Leveraging Technology: Stay ahead of the curve by embracing new technologies and digital solutions. Finland’s tech-savvy environment offers a fertile ground for integrating innovative technologies into your business operations.

Research and Development (R&D): Invest in R&D to continually improve your products or services. Utilize available R&D incentives and support programs offered by Finnish government agencies to drive innovation.

Scaling Your Business

Market Expansion: Look for opportunities to expand your market, both domestically and internationally. Business Finland and other organizations provide resources and support for Finnish businesses aiming to enter new markets.

Strategic Partnerships: Forming strategic partnerships with other businesses can open up new opportunities for growth. Collaborative ventures can provide access to new markets, technologies, and expertise.

Continuous Learning and Adaptation: The business landscape is constantly evolving. Foster a culture of continuous learning and adaptation within your organization to navigate changes and seize new opportunities.

Networking and Community Engagement

Industry Associations and Chambers: Active participation in industry associations and chambers of commerce can provide insights into market trends, regulatory changes, and growth opportunities.

Feedback Loops: Establish feedback loops with customers, employees, and partners to gather insights and identify areas for improvement and innovation.

Accessing Growth Financing

Exploring Financing Options: As your business grows, you may need additional financing. Explore various funding options, including government grants, bank loans, venture capital, and crowdfunding, to fuel your expansion.