Published on and written by Cyril Jarnias
The idea of starting a business in Finland is appealing to more and more mobile entrepreneurs. An ultra-digitalized country, very politically stable, with one of Europe’s most dynamic start-up ecosystems, Finland boasts numerous advantages for anyone looking to build an international project while enjoying a safe and predictable living environment. However, establishing yourself in a Nordic market that is small and highly structured is not something to be improvised. Between choosing a legal structure, taxation, cost of living, public funding, and residency questions, there are many parameters to master.
This guide is for expatriates considering starting their business in Finland, whether to test a concept, build a deeptech start-up, or develop a European subsidiary. The goal is to provide a concrete overview of the steps, constraints, and especially the levers to activate to maximize chances of success.
Why Choose Finland for Entrepreneurship
Finland first stands out for its highly stable politico-economic environment, near non-existent corruption, and a very transparent administration. The economy is strongly oriented towards innovation, with massive public investment in R&D and a deep tech culture. Very early adoption of digital technology has shaped a country where almost all public services are accessible online and where electronic signatures have full legal value.
For a foreign entrepreneur, the setup is facilitated by procedures that are mostly online, official documentation often available in English, and a mature culture of compliance (including GDPR). Furthermore, they benefit from direct access to the single European market and its 450 million consumers.
Key growth sectors are clearly identified: ICT, gaming, cleantech, green energy, biotech, digital health, cybersecurity, e-commerce, cloud, but also processing industries and advanced industrial technologies. The start-up ecosystem, particularly around Helsinki, Espoo, and Tampere, is extremely active, with international successes like Supercell or Wolt and a strong presence of venture capital investors.
However, Finland remains a small market, very competitive, with demanding consumers and high labor costs. For a mainstream B2C business, localization in Finnish or Swedish quickly becomes essential, and logistics to more remote areas can drive up costs. The country rewards serious, well-prepared projects capable of lasting.
Understanding the Market and Cost of Living
Establishing yourself requires anticipating not only demand and competition but also the level of expenditure needed to live and operate on a daily basis. Finland is often perceived as expensive, but the data paints a more nuanced picture.
The cost of living is higher than in just over half of the world’s countries, while remaining lower than in the United States or the United Kingdom for several items, notably housing. Rents, for example, are significantly below American levels: more than 50% cheaper according to some comparative indices.
For an expatriate entrepreneur, the central question remains: what monthly income is needed to live comfortably while dedicating resources to business development?
Orders of Magnitude for Living Budgets
Estimates vary by city and lifestyle, but we can outline indicative ranges (excluding purely professional expenses).
| Profile | Approximate Monthly Budget (excluding rent, in €) | Comment |
|---|---|---|
| Single person | 900 – 1,700 | “Modest” to “comfortable” level depending on the city |
| Couple | 1,200 – 1,800 | Excluding housing and childcare |
| Family of 4 | 1,500 – 2,800 | Excluding rent, depending on childcare and leisure |
| Single student | ≈ 900 – 950 | Average student standard of living |
Adding rent, a single person living in a major city can aim for a total budget between €1,700 and €2,500 per month for a reasonable standard of living. The resource requirements set for certain residence permits (around €1,000 per month or more) reflect this order of magnitude.
Housing and Geographical Location
Housing represents the main expense item and varies greatly from city to city. For an entrepreneur, the choice of location impacts both the personal cost of living, the available talent pool, and proximity to the ecosystem.
| City / area | 1 bedroom city center (€/month) | 1 bedroom outside center (€/month) | Comment |
|---|---|---|---|
| Helsinki | 900 – 1,400 (mentioned range) | ≈ 700 – 1,000 | Capital, main start-up ecosystem |
| Espoo | Highest cost-of-living indices in the country | Same as Helsinki or slightly lower | Strong tech concentration |
| Tampere / Oulu | 700 – 850 | Below Helsinki prices | Dynamic cities, more affordable |
| Finland Average | ~780 – 790 | ~620 – 640 | Overall estimate across several cities |
Apartments are most often unfurnished and you should plan for a security deposit usually equivalent to one to three months’ rent, which impacts setup cash flow. Competition for housing is strong in major cities, especially Helsinki, Tampere, and Turku.
For families, childcare costs remain relatively contained thanks to the municipal sector, with public daycare at income-indexed rates, but international school or private childcare can quickly increase the bill.
Daily Expenses and Basic Services
Food prices are typically Nordic-European: higher than in Southern Europe, but not exorbitant. A reasonable monthly grocery budget can be around €250 to €350 for a single person, and €800 to €1,200 for a family of four, by avoiding highly processed products and taking advantage of promotions.
The average monthly cost of essential services (utilities, internet, and mobile) for a medium-sized apartment in France
Public transportation is efficient and well-organized, with monthly passes in the range of €50 to €70 depending on the zones. In major cities, it is entirely possible to live and run a business without a car, freeing up budget for other items.
Residence and Immigration: The Framework for Foreign Founders
Even before discussing legal structures, an expatriate must ensure they have the right to live and work in Finland within the framework of their entrepreneurial project. The rules differ depending on whether one comes from the EU/EEA or a third country.
Citizens of the EU/EEA can come to start their business without a specific residence permit. They simply need to register their right of residence after three months, but can start their activity without a complex procedure.
For non-EU nationals, two main residence permits exist to start a business: the standard residence permit for entrepreneurs and the Finland Startup Permit, specifically designed for innovative start-up projects.
The Finland Startup Permit for Innovative Start-ups
This permit, launched in 2018, aims to attract non-EU founders with technological or innovative projects with strong international growth potential. It targets teams of several co-founders (solo applications are in principle excluded), who commit to residing and working full-time in Finland on their start-up.
To be eligible, the founding team must hold at least 60% of the capital and present a project that is original, differentiated from existing solutions, with a credible international growth trajectory. This is not a program for opening a small neighborhood shop or local consulting activity: the scheme explicitly targets future scale-ups.
The crucial step for obtaining a residence permit in Finland via the Startup program is to obtain an ‘Eligibility Statement’ issued by Business Finland. This public agency rigorously assesses several criteria: the robustness of the business model, the complementarity and skills of the founding team, the start-up’s development stage, evidence of traction (like a prototype or acquiring the first customers), and the future ability to raise funds. It is imperative to note that a negative opinion from Business Finland leads to the automatic rejection of the residence permit application.
The initial permit is generally granted for two years, renewable for up to four years. It allows bringing a spouse and children. It does not require a minimum investment amount in the company, but each founder must prove they have sufficient resources to cover their personal expenses (often around €1,000 to €1,200 net per month, for the intended duration).
Choosing the Legal Form of Your Company
Once the residency question is clarified, the crucial step is to choose the legal structure best suited to the project and the founder’s profile. Finland offers a range of company forms, some very lightweight, others more structured and credible in the eyes of partners.
Overview of Company Forms
The main forms are as follows.
| Legal Form | Key Characteristics | For Which Profile? |
|---|---|---|
| Toiminimi (sole proprietorship) | No minimum capital, simplified formalities, unlimited liability of the entrepreneur | Freelancers, micro-activity, market test |
| Avoin yhtiö (Ay, general partnership) | At least 2 partners, all jointly and severally liable for debts | Small activities in a duo, often family-based |
| Kommandiittiyhtiö (Ky, limited partnership) | 1 managing partner with unlimited liability + 1 limited partner liable only up to their contribution | Silent investors, simple structuring of a partnership |
| Osakeyhtiö (Oy, private limited liability company) | No legal minimum capital, limited liability, structured governance, very credible | SMEs, start-ups, growth projects |
| Julkinen osakeyhtiö (Oyj, public limited company) | Minimum capital €80,000, at least 3 board members, possible listing | Large companies, major fundraising projects |
| Cooperative, foundation | Specific structures for collective or non-profit projects | Cooperatives, impact structures |
| Branch of a foreign company | No separate legal personality, liability borne by the parent company | Foreign groups testing the Finnish market |
For an expatriate entrepreneur with growth ambitions, the Osakeyhtiö (Oy) form is, by far, the most common and suitable. It combines flexibility, professional image, and protection of personal assets. For a freelancer or to test a service activity very simply, the toiminimi status remains an option, with the trade-off of unlimited risk in case of debts.
How to Decide Between Options
The choice of structure depends on several criteria: risk level, development ambitions, need for investors, requirements of your partners (banks, large corporations), and desired management simplicity.
The sole proprietorship is an ideal structure for quickly starting a low-cost activity, as it does not require any share capital to be paid up. However, it carries major risks, such as the commitment of the founder’s entire personal assets in case of debts. Furthermore, this legal form can limit growth prospects, making it harder to secure large contracts from certain companies or raise funds from investors.
The limited liability company (Oy) requires a bit more formalities and incorporation fees, but no longer requires a legal minimum capital: you can declare a modest, or even symbolic, capital, provided it is fully paid up before registration. It is the most credible form in the eyes of clients, investors, and authorities.
For large companies aiming for capital market financing, the Oyj form is necessary as it allows public issuance of shares. In practice, most expatriates start with a private company (Oy), with the possibility to evolve into an Oyj if the company scales up.
Creating Your Company in Finland: Steps, Timelines, and Costs
Finland’s reputation for simplicity in business creation is well-deserved. The procedure is highly digitalized, governed by relatively short timelines and clear rules.
A company only exists legally at the moment of its registration in the Trade Register managed by the Finnish Patent and Registration Office (PRH). Before this registration, it cannot validly conclude contracts in its own name nor hold rights. Acts signed “on behalf” of the company in formation personally bind the individuals who sign them, until the automatic transfer of obligations to the company upon registration.
Key Steps in Incorporating an Oy
The process is based on a set of founding documents, some of which must be written in Finnish or Swedish (notably the articles of association). The typical structure is as follows.
| Step | Essential Content | Points of Caution |
|---|---|---|
| Drafting the Memorandum of Association | Founding contract, list of shareholders, number of shares subscribed, subscription price, payment terms, board composition | Must be signed by all founders, respecting mandatory deadlines and mentions |
| Drafting the Articles of Association | Company name, registered municipality, business purpose, possible share transfer restriction clauses, languages of the trade name | Document in Finnish or Swedish, possibility to have a multilingual trade name |
| Establishing the governing bodies | Appointment of the board (at least 1 member + 1 deputy for a private Oy), possible CEO, auditors if required | Guide the choice of directors based on EEA residency rules |
| Payment of share capital (if declared) | Cash payment into a specific bank account in a Finnish bank or non-cash contribution valued by an auditor | Non-cash contributions cannot be work or services |
| Filing the registration application | Notification to the Trade Register with all supporting documents, including proof of contribution payment and declaration of compliance | Deadline of 3 months after signing the Memorandum, otherwise the procedure lapses |
The administrative fees for registering a limited liability company are around €370 for a paper or electronic filing, with a possible slight discount depending on the online option chosen. Each secondary trade name incurs an additional cost. For a branch of a foreign company, the requested amount is similar.
Common budget for the entire set of basic documents, including drafting of deeds, certified translation, and legal assistance.
The announced timelines for registering an Oy are around three to four weeks, but well-prepared electronic applications can sometimes be processed faster. The register is required to decide within a maximum period of 21 days for a standard filing, and within five business days for some fully online procedures.
After company registration, a unique identifier (Business ID or Y‑tunnus) is assigned to it. This number is essential and must be used for all administrative procedures, notably with tax authorities, social security, and various registers.
Governance, Administration, and Presence Obligations
The law sets precise rules regarding the composition of management bodies and the residency of directors. A private Oy must have a board of directors comprising at least one regular member and one deputy member. For an Oyj, the minimum number of directors increases to three.
At least one board member must reside in the European Economic Area. If this is not the case, a specific authorization from the PRH is required. However, there is no requirement for Finnish nationality for directors. Similarly, the managing director must, in principle, be an EEA resident; otherwise, a special permit is required.
Board or shareholder meetings are not required to take place physically in Finland: digital tools and videoconferencing are perfectly acceptable, which facilitates management for multi-located founders.
Opening a Business Bank Account: The Real Challenge
Paradoxically, the trickiest step for an expatriate starting a business in Finland is not registration with the Trade Register, but opening the company’s bank account. Finnish financial institutions apply particularly strict KYC and anti-money laundering policies, with thorough checks on the origin of funds, activity, ownership structure, and the identity of beneficial owners.
Main banking players and documents required to open a business account for a company in Finland.
Nordea, OP Financial Group (Osuuspankki), Danske Bank, and Aktia are the main institutions for business accounts.
More digital alternatives exist, such as Narvi or Satchel.eu, for professional banking management.
Trade Register extract, articles of association, minutes of appointment, ID and proof of address for directors and beneficial owners.
A detailed business plan and sometimes bank references are also requested by institutions.
Documents not in Finnish, Swedish, or English must be translated by a certified translator, and papers from abroad may require an apostille or legalization. You should also plan for a minimum deposit (often between 100 and 200 €) and opening fees (for example around 100 € at some banks) as well as monthly account maintenance fees which can exceed €15 to €30.
For a non-resident founder, the bank often requests a physical interview for account opening, although online preparation is possible. The process timeline generally ranges from 2 to 6 weeks. For an Oy-type company, opening a dedicated account for share capital can be a prerequisite for final registration.
It is important to note that having an account in Finland does not automatically create a tax residence in the country, either for the company or its directors. Tax qualification is based on other criteria (place of effective management, permanent establishment, duration of presence, etc.).
Corporate and Personal Taxation: The Broad Strokes
Finland practices relatively simple corporate taxation: a flat rate of 20% on taxable profit, regardless of company size. Resident companies are taxed on their worldwide income; non-residents, however, are taxed only on their Finnish-source income, typically that attributable to a permanent establishment in the territory.
VAT, Thresholds, and Declarative Obligations
The VAT system is based on a high standard rate, with reduced rates for certain goods and services. The percentages have evolved over time, but the orders of magnitude are clear: a standard rate around 24–25%, and reduced rates for food, press, books, certain health products, or transport.
VAT registration becomes mandatory beyond a certain annual turnover threshold. The recently mentioned amounts are at €15,000 then €20,000, with a possible exemption for small structures below €20,000. Declarative obligations can be monthly, quarterly, or annual depending on the volume of activity, with the possibility for small businesses to benefit from quarterly or annual declaration schemes.
Tax filings (VAT, salaries, corporate tax, etc.) must be done online via the MyTax portal. Delay can result in surcharges and penalties, which can reach up to half of the tax due in the most serious cases.
Profit Tax, Dividends, and Tax Treaties
Beyond the fixed 20% rate on corporate profits, one must consider the taxation of dividends distributed to shareholders. For resident individuals, the taxable portion varies depending on whether dividends come from a listed or non-listed company, with a particular regime based on the company’s net asset value. In practice, a large portion of dividends from non-listed companies can benefit from favorable taxation within certain limits.
For entities (companies) receiving dividends, these are often exempt, making Finland attractive for structuring holdings within the EU. The country has signed numerous double taxation treaties, limiting the risk of triple taxation in international structures.
Personal Taxation for Expatriates
On a personal level, residents are taxed on their worldwide income, with a composite taxation: a progressive state tax (up to over 40% on the highest brackets), a municipal proportional tax whose rate varies by municipality, and various contributions (church, TV license, health insurance, pension, unemployment).
Non-residents are generally taxed only on their Finnish-source income via a withholding tax system at a fixed rate. For example, the standard rate for wages is 35%, with the possibility of some deductions. A preferential regime exists for highly paid foreign experts (whose salary exceeds a defined monthly threshold): they can opt for a lower flat rate, but this option excludes any possibility of deductions.
For an expatriate entrepreneur who is both director and shareholder of their Finnish company, it is essential to properly calibrate their remuneration between salary, dividends, and possibly benefits in kind, taking into account their tax residence, social security rules, international treaties, and any special regimes. In complex situations (multi-country, prolonged remote work from abroad, etc.), the support of a tax advisor familiar with both Finnish law and the law of the country of origin is highly recommended.
Accounting, Audit, and Compliance: What Day-to-Day Management Entails
Finland imposes on all companies and self-employed individuals an obligation to keep accounting in accordance with national law (Accounting Act) and Finnish financial statement presentation standards (FAS). Listed companies must also apply IFRS standards for their consolidated accounts.
Almost all companies, including small structures, must use double-entry bookkeeping. Only some very small sole proprietors may be exempt. Annual accounts (balance sheet, income statement, notes, management report) must be prepared each year and filed with the Trade Register within four months after the fiscal year-end.
Balance sheet total threshold below which a small company may be exempt from appointing an auditor.
Maintaining accounting is the responsibility of management, but in practice most entrepreneurs outsource this function to an accounting firm (tilitoimisto). Cloud-based accounting and invoicing software are widely used, with local solutions (Procountor, Visma) and international tools. Digitalization also facilitates interfacing with the tax administration and reporting obligations (Incomes Register for salaries, VAT returns, etc.).
Funding, Grants, and Public Support for Entrepreneurs
One of Finland’s great strengths for an expatriate company founder lies in the density of its public support schemes. The state and regions inject significant amounts into young companies, whether in the form of grants, loans, guarantees, or capital investments.
Overview of Key Public Actors
Several organizations play a central role in the landscape.
| Organization | Main Role | Type of Support |
|---|---|---|
| Business Finland | National innovation and internationalization agency | R&D grants, export support, deeptech accelerators, innovative start-up status |
| ELY Centres | Regional Centers for Economic Development, Transport and the Environment | Investment grants, employment aid, advice |
| Finnvera | National financing company | Loans, bank loan guarantees, export credits |
| Tesi | Public venture capital investor | Direct and fund investments in growth companies |
| Finnpartnership, Finnfund | Funding for projects in developing countries | Study grants, impact investments |
| TE Services | Public Employment Services | Start-up grant (starttiraha), wage subsidies |
For an expatriate, access to these schemes is in principle possible as long as the company is registered in Finland and the founder resides there legally. The foundations of innovation policy are strongly inclusive: the country actively seeks to attract foreign talent and does not reserve its aid for citizens only.
The Start-up Grant (starttiraha)
Among the most concrete mechanisms for an individual entrepreneur or a small project, the start-up grant holds a special place. Paid by the employment services (TE Offices or, in some cities, by the municipality), this aid aims to secure the creator’s personal income during the first months of activity so they can fully focus on launching their business.
Gross monthly amount paid for the basic unemployment allowance, corresponding to about €37 per working day.
To be eligible, one must be domiciled in Finland, create the business in the territory, become a full-time entrepreneur, demonstrate sufficient skills for the project, and prove that the aid is necessary for subsistence. The administration also examines the potential economic viability of the business and the impact on local competition. Crucially, one must not have started full-time activity before the decision: the application must precede the effective launch.
The start-up grant does not finance the company’s operational expenses (equipment, marketing, employee salaries). Its main utility is to free up part of the founder’s personal cash flow, which can be decisive for their financial stability, especially in a country with a significant cost of living.
Business Finland Funding
For innovative projects carried by ambitious start-ups, Business Finland offers a range of programs covering different phases: concept validation, R&D, piloting, internationalization, deeptech acceleration, or support for innovative young companies with high growth potential.
Without going into the countless details of each instrument, a few principles emerge. Most grants cover a substantial fraction of project expenses (50 to 70%, sometimes 75%), with the company responsible for funding the remainder from equity or other sources. Many of these aids are not considered de minimis, which leaves room to combine several schemes without saturating state aid ceilings.
Funding that can exceed one million euros for innovative young companies in the traction phase.
For an expatriate founder, the main challenge is not so much eligibility as the quality of the application: robust business plan, credible team, export potential, and technological added value are closely scrutinized. It is often wise to be assisted by an advisor from an ELY Centre or a business creation support agency (Uusyrityskeskus, NewCo Helsinki…) to prepare these applications.
Loans, Guarantees, and Bank Financing
Finnvera acts as the state’s arm to facilitate access to bank credit for SMEs. It offers different types of loans (start-up, growth, digitalization, green projects…) and especially guarantees that can cover up to 80% of a loan granted by a commercial bank. This significantly reduces the risk for the bank and increases the chances of financing for the young company.
For an expatriate who does not yet have a credit history or local assets, these instruments can make the difference. However, it should be kept in mind that loans must be repaid: non-repayable grants are generally conditional on innovation or export projects.
Ecosystem, Networks, and Business Culture: Integrating to Succeed
The success of an entrepreneurial project in Finland is not solely due to legal or fiscal variables. It largely depends on the ability of the founder to integrate into the ecosystem, understand cultural codes, and build relationships of trust with partners, clients, and investors.
A Leading Start-up Ecosystem
Helsinki has risen among the most innovative start-up ecosystems in Europe, notably in gaming, deeptech, cybersecurity, healthtech, and B2B software. Hubs like Maria 01, presented as one of Europe’s largest start-up campuses, host hundreds of young ventures, accelerators, investors, and corporate partners.
Major events like Slush bring together thousands of international founders and investors each year, with a very high proportion of participants from the start-up and VC ecosystem. This concentration creates an environment rich in opportunities for meetings, funding, and collaborations, provided you actively engage in it.
Around Helsinki, cities like Espoo or Tampere also develop specialized clusters, notably in AI, industrial technologies, and health. For an expatriate, regularly attending meetups, joining coworking spaces or incubation programs, and engaging with local online networks (Slack, LinkedIn groups, etc.) helps to more quickly overcome the network deficit.
Finnish Culture and Business Practices
Culturally, Finland has some particularities that are crucial to integrate if one wants to build a solid reputation. Communication is direct, factual, without unnecessary emphasis. Silence is not perceived as awkward but as a moment of reflection. Decisions are often made collectively, and organizations are generally non-hierarchical.
Punctuality is imperative, as being late, even slightly, is perceived as a lack of seriousness. Discussions are direct and factual, quickly favoring structured arguments and data. It is crucial to keep commitments, as a broken promise significantly damages the professional relationship.
Business relationships are built over time, through consistency, rigor, and discretion rather than with grand gestures. Social codes are marked by gender equality, valuing privacy, and reluctance to discuss sensitive personal topics (salary, religion, health, etc.) with new contacts.
Integrating into this environment requires some adaptation: moderating highly demonstrative communication styles, respecting confidentiality, being precise with deadlines and commitments, and accepting that a longer observation phase may precede the signing of important contracts.
Conclusion: A Demanding but Opportunity-Rich Terrain
Starting your business in Finland as an expatriate means choosing a country where the administration is predictable, corruption is almost non-existent, the rules of the game are explicit, and public authorities assume an active role in financing and supporting entrepreneurs. It also means anchoring yourself in the EU in an extremely digitalized environment, with a high skill level and a modest but sophisticated internal market.
In return for the advantages, the founder must contend with a significant cost of living, a restricted domestic market, a rigorous business culture, and sometimes tedious bank account opening. Requirements in terms of compliance, accounting, auditing, and data protection are also high.
For the expatriate who carefully prepares their project, trains themselves in the local culture, surrounds themselves with competent advisors (accountants, lawyers, incubator coaches), and engages in the ecosystem, Finland however offers a rare terrain for experimentation and growth: a country where one can build, from a stable and supported base, a company resolutely oriented towards the world.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
