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Buying property in Finland

Buying property in Finland starts by searching for a suitable property for your needs. Most real estate agencies have properties online for sale and their sites are a good starting point to view and compare properties. Most of the sales are done by using services of real estate agents. Buying property in Finland is straightforward, but there is some regulation involved, that needs to be considered and followed.

Because of historical reasons, selling of a property more formal procedures compared to other commodity sales, as the value of the property is often quite high, and properties have significant impact in the society and wellbeing of individuals. There are basically three property acquisition types in Finland. These are real property, an unseparated parcel or a designated share of a property. Unseparated parcel is an area of the existing property, that will be separated in a cadastral survey. Designed share is a fraction of the property, meaning that a property is owned by several entities, for instance three owners who each own 1/3 of the property.

A real property in Finland consists of the area of the property, privileges to jointly owned areas and the property’s encumbrance, such as a road, for instance. A single property may include both land and water. A real property may consist of several separate areas, or lots. Each property is identified and has an individual identification number. A property and the housing unit located therein comprise fixed property. In other words, a building alone is not legally regarded as fixed property.

Property Transaction Process in Finland

After property has been found, there are some things to keep in mind during the purchase process. Sometimes, there is a deposit that needs to be paid before the deal. This deposit is part of the sales price. In addition, when buying a property, a public purchase witness is needed. If a property conveyance has not been witnessed, it is not valid, and the buyer cannot be granted title to the property. Only a public purchase witness can witness a property conveyance. Public purchase witness will charge a small fee of their service. Public purchase witnesses can be found using public purchase witness online search or a suitable witness is selected by the sales agents.

Before buying, always check the certificate of title and the certificate of mortgages and encumbrances of the property. From the certificates you can see who really owns the property and if the property has some other unwanted characteristics, that might not be favourable to the buyer. Certificates are usually provided by the seller or real estate agent, or they can be ordered from the National Land Survey. The certificates are subject to a small charge. Certificates of title and certificates of mortgages and encumbrances need to be as new as possible to guarantee they are up to date. If a purchaser is from outside of the EU or EEA, you may need permission from the Ministry of Defence to acquire property.

If it is a company buying the property, then a person who is signing needs to prove that he/she is eligible to make such a decision and transaction. This can be done by submitting a copy of board meeting minutes or general meeting minutes of the buyer’s organization. Buying can be done remotely, then a power of attorney will be used, usually a signed copy of Power of Attorney is enough. You also need to review and sign a bill of sales or sales agreement. A bill of sales is carefully reviewed by a public purchase witness as well and a signed agreement is send to National Land Survey of Finland (Maanmittauslaitos) after signature. The amount of purchase is usually paid at the signing ceremony, but this can be agreed. However, the sale is valid only after the sales price is paid.

Applying for title registration of a property

Acquired property needs to be registered, otherwise you will not get property on your name. Registration of a property is done at National Land Survey of Finland (Maanmittauslaitos). It takes usually about three months to register, as the municipality or state may have the right of pre-emption in a property sale. The right of pre-emption is valid for three months following the date of sale. Ownership of the property needs to be registered within 6 months from the sale. You must also conclude the purchase by filing a transfer tax report and pay taxes. Tax is 4% of the sales price.

If property need to be parcelled, the unseparated parcel is converted into a new property in a parcelling procedure, which is initiated automatically by the National Land Survey of Finland after the acquisition. A parcelling procedure is part of a cadastral survey, and it is needed when you want to establish a new property from existing one, but it can also be started when you want to define the borders of a property or change the rights related to a property. The owner of the property is invited to cadastral survey, but it is not mandatory to participate. It is good to note that cadastral surveys are usually not conducted during wintertime. National Land Survey of Finland will charge the parcelling costs from the new owner. These costs are fixed and can be reviewed online beforehand. The cost of the parcelling depends on the size of the property.

If you need help in acquiring real property in Finland, please ask us for assistance.

Janne Mettovaara, CEO

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Investing Finland

Investing Finland

Investing Finland is a great idea if you are about to bring your products to the EU or EEA. Finland is an excellent place to start your venture as you can take advantage of the advanced business infrastructure. Finland is one of the least corrupted countries in the world. Combining this with very straightforward business culture and English speaking business environment, Finland can be a perfect location for your European HQ.

In Finland, you can also take advantage of the only Nordic country with the Euro currency. In addition to that, Finland is also offering one of the lowest corporate tax rates in Europe. Corporate tax rate is currently only 20%. This is the lowest in the EU after Britain decided to leave the European Union.

Investing Finland is also advisable, as Finnish products and services have reputation being reliable, making also your product offering more attractive as it is entering the other EU countries from Finland. In Finland, businesses benefit from a legislative environment which respects online privacy. At the same time, the transparency of Finnish legislation forms a secure foundation for investments.

Setting up a business in Finland

If You are coming outside of EU and about to start a business in Finland, it is absolute recommended to seek help of a professional. Establising a business business in Finland is quick and easy, but in order to make the process as smooth and cost efficient as possible, as in many business area as well, to know all the little tricks making company establishment fast and convenient. It is good to remember that at least one board member must have recidency within EU or EEA area. Company business ID is crucial when conducting business in Finland. Company business ID can be acquired the same day registration documents are submitted to the registration office. Opening an official and operative legal entity takes only couple of weeks.

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Establishing a business in Finland

Investing Finland

Establishing a business in Finland is fairly straightforward, but in practice many foreign companies and individuals require external help in forming a company in Finland. In theory, a company can be established by a foreign entity by themselves, but in most cases it is the most cost efficient method to use external assistance. Establishing a business in Finland requires many documents and these documents are basically required by two instances; by the bank and by the Finnish registration office (PRH). This article reveals some of the paper work required in order to establish a company in Finland.

Typical and recommended company form for a foreign entity is limited company, in Finnish “osakeyhtiö”, abbreviated as “Oy”. Oy always possesses a business ID, known as “Y-tunnus”, which is the ID of the company and required to run a business in Finland. Business ID is usually granted soon after registration notification has been submitted to the registration office.

Because of the fairly strict money laundering legislation and practices, opening a bank account is usually the most time consuming part of company establishment. Bank policies and practices vary somewhat, but there are various documents to be delivered to the bank before an account can be opened. A corporate bank account is not necessary any more, as there is no requirement of share capital of 2500€. With the registration documentation of the company to be established, the company can be registered at the registration office and the business ID will be granted.

Opening a corporate bank account in Finland

As said, establishing a bank account is the first step. Before a bank account can be established, there is usually a board meeting of Oy to be held. Along with the board meeting minutes, bank usually requires copies of passports of the beneficial owners i.e. real decisions makers of Oy. Beneficial owners are those individuals, who own at least 25% of shares of parent company or other individuals who use true decision power in Oy. These beneficiaries should be listed in the board meeting minutes as well.

As said, bank needs to know who are the true decision makers and beneficial owners of Oy. Therefore, a description of the ownership structure is needed. This can be for instance a list of shareholders, signed and proven by an authorized individual entitled to sign on behalf of the parent company. Ownership structure documentation should at least include VAT number of the parent company, home country and ownership description of the parent company. If the owner is an individual, name, date of birth and ownership are required. In case the Oy is a subsidiary of the foreign company, the bank needs Trade Register extract of the parent company from the home country’s registration office.

Proven documentation testifying the residence of the owners is required; any document from official source is acceptable as long as it shows the residence of the individuals, where real addresses can be identified. One board member must have residence in the EU. Bank needs also contact details, residence and passport copy of a person operating the bank account.

Registration of a company in Finland

Actual registration of the company is made at the registration office (PRH). There are various details required to be filled on registration documentation, these details include such as the name of the company, home county, visiting address, postal address and language of the company in Finland. Owners of the shares and number of shares issued are required as well as the chairman and board members of Oy, their postal addresses, dates of birth and nationalities. Articles of association and company business description must be written in proper Finnish or Swedish language. It is good to note that signatures of the shareholders and real beneficiaries are required, so some time needs to be reserved for that as well.

Although registering a company in Finland is fairly standardized, there are many documents required and some pitfalls can be avoided when company establishment is planned appropriately. These pitfalls originate mostly due to language barriers, as some of the documents must be written in the official language of Finland, i.e. either in Finnish or Swedish. Also, bank practices are fairly strict and Finnish registration office requires formal procedures to be followed.

Janne Mettovaara

CEO at Legistum Attorneys


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