Starting a Business in Finland
The comprehensive guide to establishing and running your own business or light entrepreneurship in Finland.
Phase 1: Preparation
Before you register anything, lay the groundwork for a successful business.
1. Choose Your Path
Decide between Limited Company (Oy) for liability protection and tax benefits, Sole Trader (Toiminimi) for simplicity, or Light Entrepreneurship (Kevytyrittäjyys) for quick starts without a Business ID.
2. Immigration & Status
Ensure your residence permit allows entrepreneurship. EU citizens generally just need to register right of residence. Non-EU citizens may need an Entrepreneur Residence Permit.
3. Market & Networking
For freelancers, connect with brokers like Witted, Thriv, and Finitec. For SMEs, leverage B2B networks, chambers of commerce, and local enterprise agencies (Uusyrityskeskus) to find partners and business premises.
4. Grants & Financing
Apply for the Startup Grant (~€740/month) BEFORE registering. For larger investments and growth, explore loans and guarantees from Finnvera, the state-owned financing company.
Choose Your Mode
Compare the most common ways to work in Finland.
Light Entrepreneurship
Kevytyrittäjä
Pros
- No paperwork
- No fixed costs
- Easy to start/stop
Cons
- High service fees (5-7%)
- No tax planning
- Limited expense deductions
"Great for side hustle or testing business ideas."
Sole Trader
Tmi (Toiminimi)
Pros
- Simple administration
- Keep 100% of profit
- Expense deductions
Cons
- Personal liability
- High progressive tax on high income
- Full responsibility
"Best for full-time freelancers with moderate income."
Limited Company
Oy (Osakeyhtiö)
Pros
- Flat 20% corporate tax
- Dividend benefits
- Limited liability
- Fringe benefits
Cons
- More bureaucracy
- Higher accounting costs
- Double taxation (Corp + Personal)
"Ideal for high earners and long-term business growth."
Phase 2: Foundation
Setting up the legal and financial infrastructure.
1. Registration
Register via YTJ (BIS). Establishing an Oy costs ~€280. You must join the Trade Register, Prepayment Register, and VAT Register (mandatory if turnover > €15k/year).
2. Banking & Accounting
Open a business bank account (e.g., Nordea, OP, Holvi). Hire a professional accountant or use services like ours to handle bookkeeping, VAT, and annual reports.
3. YEL Insurance
Mandatory if your work income (YEL income) exceeds ~€9,300/year (2025). The contribution is ~18.8% and it forms the basis for your entire social security.
4. Tax & Prepayment
Apply for tax prepayment to pay income tax during the year. Set your salary and optimize tax-free dividends (for Oy) with your accountant.
Phase 3: Operation & Safety
Securing your future and managing risks while running the business.
1. Unemployment Fund
Join the Entrepreneur Fund (Yrittäjäkassa) if your YEL income is at least ~€15,200/year. This secures earnings-related unemployment benefits.
2. Occupational Healthcare
Organizing occupational healthcare is optional for self-employed but highly recommended. Kela reimburses ~50-60% of costs, and it is a tax-deductible expense.
3. Insurances
Liability Insurance is often required by client contracts. Voluntary Accident Insurance and Health Insurance offer further security and tax benefits.
4. Unions & Networking
Consider joining "Suomen Yrittäjät" for legal advice and benefits. Network continuously to keep your project pipeline full.
Useful Resources
Useful links to official Finnish authorities and financial systems.
YTJ (BIS)
Business Information System for registrations.
PRH
Patent and Registration Office.
Finnvera
State financing and guarantees for SMEs.
Startup Grant Info
Official requirements for the Finnish startup grant.
Finlex
Database of Finnish legislation.
Business Finland
Support for international companies.