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Company Formation in Finland

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Company Formation in Finland

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Company Formation in Finland

So you've decided to start your business in Finland and researched your market. Now it's time to decide how you will register and set up a business in Finland. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?

Here are your typical options when starting a business in Finland:

A Private Limited Company

You may choose to set up your business in Finland using this formation. This type of company may be set up by one or more people. A minimum registered share capital of EUR 8,000 is paid, the running of the company is done by the management board and liability is only for the amount of the capital. There must be at least one member and one deputy member is the share capital is less than EUR 80,000.

A Public Limited Company

When registering a business in Finland you may use this form of business. This type of company can be set up by one or more people or legal persons. The minimum registered share capital is EUR 80,000 and the running of the business is done by a management board. The board must have a minimum of three members and must appoint a managing director if the share capital is above EUR 80,000. The companys liability is only for the amount of the capital.

A General Partnership

This type of company can be set up by two or more people, one of which must be a EEA resident. If any debts should occur on the business the partners are liable. Depending on the amount of capital each partner has provided, determines they amount of profit.

A Limited Partnership

When starting up a company in Finland you may consider this formation. This type of business is set up by two or more people.

There are two sorts of partners:

  • active partners

  • limited or sleeping partners

The active partner tends to be the entrepreneur, while the sleeping partner tends to finance the business but does not run it. The active partner can use their name in the partnership while the sleeping partner cannot.

A limited partnership tends to develop from a sole trader or general partnership when a sleeping partner enters the business to provide extra finance for growth.

The active partner may be considered self-employed and therefore benefit from tax allowances. They are responsible for paying income tax on their share of the profits. The sleeping partner, if only being a financial benefactor, will be taxed in a different way.

The active partner is liable for the obligations of the business whereas the sleeping partner has no liability to third parties and only risks is losing the amount of money he has invested.

Branch Office

This type of business means that a company can open a sister branch in Finland. There are certain requirements for opening a branch in Finland and some of the applications are only available in Swedish or Finnish. Other information required are: company name and residence, postal address of the branch, the accounting period, company name, and legal form (e.g. company limited by shares) as well as the company name of the branch. the register in which the trader opening the branch has been entered in his home country and the number of the trader, the type of activity conducted by the branch, the personal details of a representative (The representative must usually be resident in the EEA), personal information about each person who is authorised to sign the company name of the branch and an explanation of how the company name must be signed, person data and names of those authorised to represent the trader as a statutory body or members of that body (i.e. Board of Directors of the foreign country)

Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

  • Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.

  • Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.

  • Patent License - The allowance of another party to use your patented product, design or process.

  • Trademark License - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Finland

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Finland include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Finland: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

The Finnish Franchising Association (FFA) was founded in 1988 to help promote and develop good franchising practise in Finland. They are also a member of the European Franchise Federation. It is quite straightforward to set up a franchise and advice and help can be given from the FFA.

Click here to Ask an Expert about Company Formation in Finland

Organisations that can assist with Company Formation

  • > Company formation services.

    Need to register a company or setting up a company?

    More Details Visit Website
  • > Nominus.com

    When expanding your business to Finland, don’t forget to protect your brand. We provide Trademark Registration Services in Finland and in the entire European Union.

    More Details Visit Website

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