Finland has a relatively small population compared to its neighbors, but it is home to some of the biggest companies worldwide. The country has amicable policies and provides equal opportunities to start-ups and established businesses.
Several organizations in the country, both private and public, offer start-up grants, networking opportunities, and business advice to help businesses get off the ground faster and contribute to the national economy. Here are some of the things you need to know if you plan to do business in the country.
Doing Business in Finland
According to the World Bank, Finland ranks number 17 in the world when it comes to the ease of paying taxes for businesses. Even within the perspective of the European Union (EU), it is one of the safest and most convenient countries for establishing a company in the region.
Here are the advantages of doing business in Finland:
- Technologically advanced with fast and stable internet connection and a reliable telecommunications industry.
- Very low corruption and crime rates, making it safe to establish and run a business in the country.
- A high-quality education system that produces skilled graduates.
- A hardworking workforce who takes responsibility for their tasks.
- A low corporate tax that is particularly attractive for start-ups and foreign investors.
Numerous challenges come with doing business abroad, but Finland remains attractive by helping entrepreneurs go through the roadblocks and providing support through government-sponsored collaborations. The Finnish government offers free advice to anyone interested in setting up a business in the country.
Legal System in Finland
Finland runs a parliamentary system with civil laws originating from Swedish Law. Finland treats nationals and foreigners equally.
The EU law is directly applicable and often has precedence over national legislation. Trading restrictions and regulations imposed at the national or the EU level apply to the importation and exportation of goods.
Business Entities in Finland
Entrepreneurs who want to start a business in Finland should learn about the different business entities they can establish in the country. Some of them are only open to natural citizens, but most are open to foreign investors as well.
- Private entrepreneur (Toiminimi)
- Limited Liability Company (Osakeyhtiö, OY)
- General Partnership (Avoin Yhtiö, AY)
- Limited Partnership (Kommandiittiyhtiö, KY)
- Public Limited Company or Corporation (Julkinen Osakeyhtiö, Oyj)
- Cooperative Association (Osuuskunta)
The type of entity to register will largely depend on the nature of the business. It will take around 17 working days on average to set up a company.
Taxation in Finland
Tax treatment in the country will depend on the type of business entity. The national income tax is progressive and ranges from 25% to 40%. Meanwhile, the corporate income tax rate is fixed at 20%. Assets transfer tax and withholding tax may also be required. Businesses in Finland must make social security contributions.
Profits of self-employed professionals and business owners are taxed differently, as they are divided into capital-income and earned-income. Capital income is taxed at 30% if the value is under €30,000 and 34% for earnings over €30,000 per annum.
Working Hours in Finland
The typical office hours in Finland are from Monday to Friday, 8 AM to 5 PM. Lunchtime falls between 11 AM and 2 PM, lasting for about one to two hours.
Weekly working hours in the country fall within the EU average. Overtime work is more common in Finland compared to other EU countries. On the other hand, part-time work is less common compared to its EU neighbors.
Around 10% of workers work less than 34 hours a week. The majority of the workforce works 35 to 40 hours per week. One-third of the working population, though, spends 41 to 49 hours per week in the office, while one-sixth works for more than 50 hours a week.
Each month of working full-time, employees earn at least two days of leave, for a minimum total of 24 days. Employees have the right to carry over a portion of the holidays exceeding the 24 weekdays they earned on to the following working year.
Working days or hours that employees are unable to attend to for the following reasons are still counted as if they worked for that period:
- Maternity or paternity leave or temporary child-care for a maximum of 156 days
- Illness or accident for up to 75 days
- Medical rehabilitation for up to 75 days
- Order from authorities to prevent the spread of disease
There are also special cases wherein employees can ask for time-offs and still have the days spent counted as days at work:
- Study leave
- Training participation as part of the job
- Reservist military training
- Shortened working weeks
Public Holidays in Finland
- New Year’s Day
- Good Friday
- Easter Monday
- May Day
- Ascension Day
- Whit Sunday
- Midsummer Day
- All Saint’s Day
- Independence Day
- Christmas Day
- Boxing Day
Healthcare in Finland
Everyone residing in Finland is entitled to the country’s public healthcare system. Municipalities are responsible for organizing, financing, and providing medical access to the people through municipal health centers. For specialized medical care, patients are taken to hospitals for treatment.
Private health services can be subsidized with public funds as Kela (the Social Insurance Institution of Finland) reimburses portions of medical expenses. This system helps Finland provide quality healthcare services to the people.
Employers are required to provide occupational health care programs to their employees. This service does not extend to the employee’s family and doesn’t cover the services of specialists. It is solely designed to prevent work-related illnesses and promote a healthy work environment.
INS Global in Finland
With nearly 2 decades of experience helping companies across the world, INS Global provides the same quality reach and assurance in Finland. We are able to help your company get setup and operate within the region, in a matter of days. Whether you are looking for an employer of record in Finland to hire your staff, a payroll provider to streamline your payment activities, or a recruiter to help you find top talent, we can provide the assistance you need.