How to start a business in Finland
Simple guide for entrepreneurs and expats
Starting a business in Finland can seem complicated, especially if you are new to the system. The process includes choosing a company type, registration, taxes and accounting requirements. In this guide, we explain the steps in a simple and clear way.
1. Choose business type
The first step is choosing the right type of business. In Finland, the most common options are Toiminimi (sole trader) and Oy (limited company). Toiminimi is easier to start and works well for freelancers and small businesses. Oy is more suitable if you plan to grow, hire employees or separate personal and business finances. The choice affects taxes, accounting and your responsibilities, so it’s important to choose carefully.
2. Register company
To officially start your business, you need to register it with Finnish authorities. This usually involves submitting an application through the Business Information System (YTJ). During registration, you may also need to apply for VAT, prepayment register and employer register, depending on your business activity. The process is straightforward, but it’s important to select the correct options from the beginning.
3. Taxes and VAT
Once your business is registered, you need to understand how taxes work in Finland. Most businesses must handle VAT (value-added tax), which is usually reported monthly or quarterly. You also need to pay income tax based on your profits. The rules can be confusing at first, especially for international entrepreneurs, so clear guidance is very helpful.
4. Accounting requirements
Every business in Finland must keep proper accounting records. This includes tracking income and expenses, submitting reports and preparing financial statements. Even small businesses have legal obligations, so it’s important to set up accounting correctly from the start. Many entrepreneurs choose to work with an accountant to avoid mistakes and save time.
5. When you need an accountant
Technically, you can manage some parts of accounting yourself, especially in the beginning. However, most entrepreneurs quickly realise that Finnish accounting and tax rules are not always simple. Working with an accountant helps you stay compliant, avoid penalties and focus on growing your business instead of dealing with paperwork. This is especially important if you are new to Finland or running a business in a second language.
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