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 must be opened before a company can be registered. After bank account has been established, share capital will be paid (usually 2500€) to the account. With a receipt of this payment and 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.
CEO at Legistum Attorneys
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