Starting a Business in Finland as a Foreigner

Finland is genuinely open to foreign founders — there are no nationality limits on owning a company, the registration system is online and English-friendly, and a private limited company no longer needs any minimum share capital. The complications are not about ownership but about two separate things: governance rules for limited companies, and, for non-EU citizens, the residence permit that lets you actually work in your own business. This guide walks through both, plus the practical steps of getting a Business ID and setting up tax and insurance.

First, Separate Two Questions

Newcomers often blur two different permissions, and it causes real confusion. Keep them apart from the start:

1. Can you own a Finnish company? Almost always yes, regardless of nationality.
2. Can you live in Finland and work in that company? That depends on your citizenship and, for non-EU nationals, on a residence permit.

You can own shares in a Finnish company from anywhere in the world. What you cannot do, as a non-EU citizen, is move to Finland and run the business day to day without the right residence permit. According to the Finnish Immigration Service (Migri — Maahanmuuttovirasto), owning a company is not by itself a basis for a residence permit; you have to personally work in it in Finland.

EU, EEA, Nordic, and Swiss citizens skip the permit question entirely — they can start and run a business in Finland on the same footing as a Finn (though if they stay over three months they register their right of residence, covered in the EU registration guide).

Choosing a Business Form

Finland recognises several business forms, and the choice shapes your liability, taxation, and paperwork. The common ones for newcomers are:

• Private trader / sole trader (toiminimi, often shortened to "tmi") — the simplest form. You and the business are the same legal person, so you carry personal liability for its debts. Lightest registration and bookkeeping. Suits freelancers and small one-person operations.
• Limited liability company (osakeyhtiö, "oy") — a separate legal entity. Your liability is normally limited to the capital you put in. Since 2019 there is no minimum share capital, so an oy can be founded with no upfront money. More administration, but cleaner separation between you and the business and often better for raising money or hiring.
• General partnership and limited partnership (avoin yhtiö and kommandiittiyhtiö) — for two or more partners. In a general partnership all partners have unlimited liability; in a limited partnership at least one partner has limited liability.
• Cooperative (osuuskunta) — owned and run by its members; less common for solo founders but useful for group ventures.

If you are testing an idea or freelancing on the side, also look at light entrepreneurship (kevytyrittäjyys) — covered in the freelancing guide — where an invoicing service handles billing and you avoid setting up a registered business at all. It is a softer entry point, but it is not a separate legal form and does not on its own satisfy an entrepreneur residence permit.

The Business ID (Y-tunnus): What It Is

Every registered business in Finland gets a Business ID (Y-tunnus), the company's equivalent of the personal identity code. According to ytj.fi, it is given by the PRH (Finnish Patent and Registration Office) or the Tax Administration and takes the format of seven digits, a dash, and a check character — for example, 1234567-8.

You will use the Y-tunnus everywhere: on invoices, contracts, the Trade Register, tax filings, and when opening a business bank account. It is issued once your start-up notification is registered in the Finnish Business Information System. For online filings the ID is assigned almost immediately after you sign, pay, and submit; for paper filings it follows within a couple of days.

Registering: The ytj.fi Start-Up Notification

The registration itself happens through the Finnish Business Information System (BIS) at ytj.fi, run jointly by the PRH and the Tax Administration. The clever part of the Finnish system is that one notification does two jobs: it registers your business with the Trade Register (kept by the PRH) and, in the same flow, with the Tax Administration registers you choose — VAT, the Prepayment Register, and the Employer Register.

A few practical points confirmed from official sources:

• Online filing is now mandatory for companies. According to the PRH, from 1 January 2026 limited companies, partnerships, and other registered companies must file their Trade Register notifications and applications online. (Private traders, associations, and foundations are outside this rule.)
• Processing is fast for clean filings. A correctly completed online start-up notification is typically registered within a few business days. Adding the Tax Administration registers normally takes around three weeks.
• You will need strong electronic identification to file online — usually Finnish bank credentials (pankkitunnukset) or a mobile certificate (mobiilivarmenne). This is one reason founders sort out a Finnish identity code and online banking IDs early.

What It Costs

Based on the PRH price list (fees changed from 1 January 2026), the online start-up notification handling fee is:

• Limited liability company (oy): EUR 300 through the guided online process
• General or limited partnership: EUR 300
• Private trader (toiminimi): EUR 75

These are processing fees, not taxes, and are paid when you file. As with all fees here, treat the figure as current as of 2026 and confirm the live amount on prh.fi before you pay — PRH reviews its handling fees periodically.

The Governance Catch for Limited Companies

This is the part that surprises foreign founders and is worth getting right. For a limited liability company, Finland's company law requires that key people in management are connected to the EEA:

• The managing director (and any deputy) must have a place of residence in the EEA.
• At least one ordinary board member and one deputy board member must have a place of residence in the EEA.

If those people do not reside in the EEA, the company can still be set up — but it needs a separate permit from the PRH for the people living permanently outside the EEA. According to the PRH, no such permit is needed as long as the EEA-residency conditions for the board and managing director are met.

For many newcomers this is not a problem: once you have your own residence and identity code in Finland, you satisfy the EEA-residency test yourself. It mainly bites when founders try to run a Finnish oy entirely from outside the EEA, or set one up before anyone in the structure lives there. If that is you, plan for the PRH permit step, or appoint an EEA-resident director.

Residence Permits for Non-EU Founders

If you are a non-EU/non-Nordic citizen who wants to move to Finland and work in your own business, you generally need one of two permits from Migri.

Residence Permit for an Entrepreneur

This is the standard route. According to Migri, to qualify you must be a private entrepreneur, or hold a leading position with at least a 30% ownership stake in a limited company, and you must have a Business ID (with one exception: private traders applying for a first permit before arriving in Finland). You must show that the business has the potential to be profitable and that your livelihood will be secured by income from it — and, again, you must personally work in the company in Finland. Freelancers and light entrepreneurs are not eligible for this permit.

A first entrepreneur permit is applied for from abroad and is processed in two stages: an Economic Development Centre (elinvoimakeskus, the body that succeeded the ELY centres for these tasks) first issues a partial decision assessing the business, and then Migri decides on the permit. Based on Migri's fee list, the application fee is EUR 750 for an electronic application and EUR 900 on paper (extended permits filed in Finland are cheaper — EUR 230 electronic / EUR 430 paper). Confirm the current fees and processing times on migri.fi before applying.

Start-Up Entrepreneur Permit

If you are building a company that aims for fast international growth, the start-up entrepreneur permit may fit better. According to Migri, you first need a positive Eligibility Statement from Business Finland — applied for through Enter Finland and valid for four months — before you can submit the residence permit application. There is a fast-track service for start-up entrepreneurs that Migri states can deliver a decision in about two weeks. The application fee is EUR 650 electronic / EUR 800 paper as listed by Migri; verify the live figures before you file.

Which permit suits you depends on the kind of business: a profitable local service or trade typically fits the entrepreneur permit, while a scalable, investor-backed venture fits the start-up route.

After Registration: Tax and Insurance

Getting the Business ID is the beginning, not the end. A few obligations follow quickly.

VAT

According to vero.fi, you do not have to register for VAT (arvonlisävero, ALV) if your turnover stays at or below EUR 20,000 in both the current and preceding calendar year. Above that, registration is mandatory. You can also register voluntarily below the threshold — useful if you want to deduct VAT on business purchases or if clients expect a VAT-registered supplier. Note that the earlier small-business VAT relief (alarajahuojennus) has been discontinued, so do not budget for it.

Income Tax and the Prepayment Register

How your profits are taxed depends on the business form — a sole trader's income is taxed largely as personal income, while a limited company pays corporate income tax and you are taxed separately on salary or dividends you draw. Most businesses join the Prepayment Register (ennakkoperintärekisteri) so clients can pay invoices without withholding tax. You manage all of this through OmaVero, the tax portal, covered in the Finnish tax system guide.

YEL Self-Employed Pension Insurance

This one catches people out because it is not optional. According to Työeläke.fi, if you are self-employed you must take out YEL insurance (yrittäjän eläkevakuutus) once your estimated YEL income is at least EUR 9,423.09 per year (the 2026 figure) and your self-employment has lasted at least four continuous months. YEL income is the assessed value of your work, not your turnover or salary, and it drives not just your future pension but also sickness and parental allowances. You arrange it with an authorised earnings-related pension provider, generally within six months of starting. Treat the threshold as a 2026 figure and confirm the current number, as it is adjusted annually.

Banking and Moving Money

To trade, you will want a Finnish business bank account, which generally requires your Business ID and identification of the company's signatories. Opening one can take a little time, especially before you have full Finnish identification in place. In the meantime, many founders use a multi-currency account such as Wise or Revolut to receive client payments, hold euros, and pay foreign suppliers without the steep cross-border fees of a traditional bank wire — handy if you are invoicing clients abroad or paying yourself across borders while the Finnish account is being set up. It is a bridge, not a replacement: a registered Finnish business will still need a proper business account for things like VAT settlement and payroll.

Where to Get Free Help

You do not have to navigate this alone, and the free advisory services in Finland are genuinely good:

• New Business Centres (Uusyrityskeskus) — free, confidential start-up advice and help with your business plan, with offices around the country.
• Economic Development Centres / local enterprise services — guidance for entrepreneurs, including the immigration side for founders.
• Suomi.fi company services (suomi.fi/company) — the official, plain-language overview of permits, notifications, and the steps to start.
• International House Helsinki — a one-stop point in the capital region that brings several authorities together, useful for newcomers handling registration, tax, and permits at once.
• PRH and the Tax Administration — for the authoritative detail on registration, fees, and tax registers, always check prh.fi, ytj.fi, and vero.fi.

Start with the New Business Centre and Suomi.fi to map your route, confirm every fee and threshold against the official pages above, and you will have the bureaucracy of starting a Finnish business handled in a few clear steps rather than one daunting one.