Finland LLC Limited Liability Company Formation
Form a Finnish LLC Introduction
The Finnish Limited Liability Companies Act of 2006 governs how a Finland LLC, or Osakeyhtiö, is formed along with its activities and interactions with the government. The government Trade Register handles all applications for LLC’s. A Finnish LLC can be 100% owned by foreigners.
Finland is a sovereign country situated in Northern Europe. Its official name is the “Republic of Finland”. Its political system is a parliamentary republic with its central government based in the capital Helsinki.
Finland Limited Liability Company (LLC) Benefits
A Finnish Limited Liability Company (LLC) obtains these benefits:
- 100% Foreign Ownership: Foreigners can own all the shares of a LLC.
- Limited Liability: The owners are responsible up to the amount of share capital they possess.
- One Member/Manager: Only one member (who can be a foreigner) is required to form a LLC who can be the sole manager.
- Low Minimum Capital: The minimum authorized capital for private limited liability companies is 2,500 Euro.
- English: While not its official language, English is spoken by many Finnish.
Finland Company Name
The LLC must select a name not used by any other Finnish legal entity. The government has a website showing all registered company and corporation names to help applicants with selecting a unique company name.
Every LLC must either have the abbreviation “Oy”, or “LLC” at end of the company name
Registering the Finnish LLC
The application must be filed within 3 months from the signing of the Memorandum of Association. If the company does not apply for registration within that period of time, the formation expires.
Bi-lingual forms are available in order to register a Finnish LLC which includes English along with either Finnish or Swedish.
The formation of a limited liability company is reported to the Finnish Patent and Registration Office (PRH). Before registering, the total amount of the capital (2,500 Euro) must be paid.
The required documents to file include:
- A copy of the Articles of Association
- The LLC’s original Memorandum of Association signed by the shareholders
- A statement by the managing director, and members of the board of directors, acknowledging the company formation complied with the Limited Liability Companies Act.
- A receipt verifying payment of the registration fee.
If an Auditor is required either by law or by the Articles of Association: an Auditor’s Certificate confirming that the terms of the Limited Liability Companies Act requiring the payment for shares prior to registering have been complied with.
If an Auditor is not required, then enclose some other document verifying the payment of the shares must be filed, for example:
- An Auditor’s Certificate if the company has appointed an auditor; or
- An Auditor’s Certificate from any licensed auditor verifying the transfer of assets; or
- An account statement or an equivalent certificate from a financial institution verifying the payment.
Articles of Association and Memorandum of Association
The Articles of Association must contain the following information:
- The Trade name;
- The Finnish municipality where the registered office is; and
- A description of the type of business it will engage in.
The Memorandum of Association must contain the following information:
- The date when the contract of formation was executed;
- The shareholders names and the number of shares each one holds;
- The subscription price for each share;
- When the shares are to be paid in full; and
- The names of the Board of Directors members.
The owners are responsible up to the amount of share capital they possess.
A Limited Liability Company is a separate legal entity and its shareholders are not liable for the company’s obligations. Shareholders cannot be liable for the actions of the corporation.
Only one member is required.
It is not compulsory for the shares to have a nominal value.
Shareholders exercise their decision-making powers at the general meeting of shareholders. However, except during the general meeting, shareholders do not take part in the daily control or activities of the business.
At least one manager is required who can be the sole shareholder.
Board of Directors and Managing Director
A Finnish LLC must have a Board of Directors which is responsible for the control of the company accounts and finances and acts solely in the best interests of the company.
It may also have a Managing Director and a Supervisory Board, if it chooses.
The Managing Director is responsible for assuring that the company’s accounts comply with the laws and are arranged in a reliable manner.
The Supervisory Board (if one is appointed) supervises the administration of the company (the responsibility of the Board of Directors and the Managing Director).
The minimum authorized capital for private limited liability companies is 2,500 Euro.
Registered Office and Agent
Every LLC must have a registered office address in Finland along with a local registered agent.
Corporate Tax: Finnish LLCs must pay tax in Finland on their income from both Finnish and foreign sources. Limited liability companies pay a flat 20 % in tax on their profits.
Value-Added Tax (VAT): The VAT must be paid for the sale of goods and services through business operations in Finland. Since 2016, LLC’s whose sales exceed 30,000 Euro during its fiscal year must pay the full VAT. However, if sales are between 10,000 and 30,000 Euro during the fiscal year, tax relief is available.
Excise Duty: Excise duties are indirect duties levied on the consumption or use of certain products including:
- Alcoholic beverages and beverage containers;
- Sweets, ice cream and soft drinks;
- Electricity and fuels;
- Tobacco; and
The excise duty is collected on all imported and manufactured Finnish products. The Duty is paid by the commercial importer or manufacturer of the products, or any other operator who possesses untaxed products.
Annual General Meeting
An annual general meeting of shareholders is required.
Accounting and Reporting
A LLC must file its financial statement with the Finland Trade Register within two months of their implementation. The Managing Director is responsible for assuring that the company’s accounts comply with the laws and are arranged in a reliable manner.
The Trade Register’s records are available to the public.
Time for Registration
It is estimated that registration and approval of the LLC may take 2 weeks.
Finnish Shelf Companies are available for purchase.
Finland LLC Formation Conclusion
A Finland LLC or Limited Liability Company obtains these benefits: 100% foreign ownership, limited liability, only one member (who can be a foreigner) is required who can also be its sole manager, low minimum capital, and English is widely spoken.
Last Updated on November 28, 2017