Finland

Ease of Doing Business Rank: 13 

Overview 

Geographic location 

Finland is a Northern European country and a Scandinavian nation. Sweden lies to the west, Estonia lies to the south, Russia to the east, and a narrow strip of Norway lies to the north. 

Spoken language 

Finnish is one of two official languages and spoken by 94% of inhabitants. About 5% of the population speaks the second official language, Swedish. 

The top three foreign languages spoken in Finland are English (70%), German (18%), and French (10%). 

Population 

The 2019 population is approximately 5.56 million 

Most people live in the south of the country near the Gulf of BothniaGulf of Finland, and Black SeaAbout a fifth of the population lives in the capital city of Helsinki (1.17 million). Only five other cities have a population over 100,000. 

Popular industries 

The top industries in Finland are electronics, machinery, vehicles and other engineered metal products, forest industry, and chemicals. 

Education 

The Times Higher Education World Rankings lists one Finnish university in the top 100 and eight others in the top 1,000 in the world 

The Legatum Prosperity Index ranks Finland’s education system first out of 149. 

Popular entity types 

The most common business entities in Finland are Private Entrepreneur, Limited Liability CompanyGeneral PartnershipLimited Partnership, Public Limited Company, and Cooperative Association. 

The most commonly incorporated entity in Finland is Limited Liability Company. 

Finnish incentives for business 

The income tax rate for limited liability companies and other corporate entities is 20 percent. Corporate tax is paid on company profits, less deductible expenses.  

Business expenses may include capital purchases, R&D, depreciation, salaries, and financing costs, with limitations. Losses can be carried forward for use in future years. 

Capital gains from shares attached to fixed assets are tax exempt when the company has owned at least 10 % of the share capital for one year, except for companies primarily focused on real estate. 

Foreign-sourced income is subject to tax in Finland, but the country offers a deduction up to the maximum available credit determined by Finnish tax law. Amounts exceeding the allowable credit may be used within the following five years. 

Interest paid to nonresidents is generally exempt from tax, unless authorities consider it an equity investment. 

History & Features 

 

Main cities for business 

Finland’s principle cities for business are Helsinki and Turku. Helsinki is the capital and main financial center of the country. The Turku region is an important maritime production, manufacturing, and technology region. 

Popular historical & tourist attractions 

Unfortunately, Finland is a lesser-known destination despite all it offers to visitors. This is especially true if you love the great outdoors, since 75 percent of Finland is forest and woodland. The country is one of the most heavily forested in the world. 

One of the most notable green spaces is Lemmenjoki National Park, a large tract of boreal forest covering more than 2,589 square kilometers. It offers hundreds of hiking trails, and free wilderness huts. 

Finland is called the land of a thousand lakes, but it actually has an astonishing 187,888. That’s one lake for every 26 Finns. The largest is Lake Saimaa spanning 4,400 square kilometers about half the size of Puerto Rico. 

Finland also has many islands. The archipelago between Sweden and Finland has almost 40,000 alone, with a total of almost 180,000 islands throughout the country. Fasta Åland is the largest sea island in Finland with an area of 685 square kilometers. 

The area of Rovaniemi lies in the Arctic Circle. During the summer, visitors can experience the Midnight Sun where the sun never sets. Since the region is also a vast natural area with canoeing, swimming, fishing, hiking, and cycling there’s plenty to do during these almost endless days. Rovaniemi’s claim to fame is the home of Santa Claus. 

The Arctic Circle region of Finland also offers visitors one of the best areas in the world to view the Northern Lights. These shimmering curtains of green, blue, purple, and pink are often seen between September and March. 

Finland also has a rich history and many outstanding architectural wonders. For instance the 18th century Suomenlinna Fortress just outside Helsinki is a UNESCO World Heritage Site. Swedes occupied the territory at that time and built the fortress to defend against the Russians, to no avail. Russians invaded and captured the entire country. 

In the southwest, Turku is the oldest town in Finland and at one time it was also the capital cityThe town’s strategic position demanded fortification and Turku Castle still stands today. It is one of the finest examples of medieval architecture in the country. 

Helsinki offers outstanding historic buildings too. Uspensky Orthodox Cathedral is the largest in Western Europe and heavily decorated. The Neoclassical Lutheran Cathedral in Helsinki dominates the cityscape with its tall green dome. 

Finland is also very contemporary. Helsinki is modern and prosperous city with modern buildings, countless industries, and well-respected universities. It is also home to some of the most noteworthy museums in the country including the National Museum of Finland and the Finland National Gallery. 

History 

The first recorded history of Finland begins with the arrival of Christianity in the 12th century. However, the Finns resisted conversion. The pope advised Swedish forces to man a fortress to try to control the resistant Finns. 

Finland changed hands several times between the Swedes and the Novgorodians from Russia. In the end the Swedes prevailed, and large numbers of Swedish colonists poured into the country. By 1323, Finland was a province of Sweden. 

Eventually, Denmark, Sweden, and Norway formed a union under a single monarch in 1397. The union endured until 1523.  

After its collapse, Sweden resumed control over Finland and started to expand their territory. Finnish peasants suffered and the Cudgel War of 1596–1597 eruptedbut was quickly and bloodily suppressed. 

During the late 17th century and early 18th century, Finland struggled due to famine and the plague. Additionally, Russia challenged Sweden’s European supremacy in the Great Northern War and invaded Finland in 1713. 

Russians occupied Finland until 1721 when Sweden’s King Charles XII finally ceded the south-eastern part of Finland to Russia. War erupted between Sweden-Finland and Russia again in 1741, and the Russians occupied all of Finland. However, the Treaty of Albo returned all but a small part of Finland to Sweden. 

In 1808, Russia invaded Finland again. When the Russians won a decisive victory at OravainenSwedish troops abandoned Finland. Sweden’s power continued to diminish and Russia’s continued to grow.  

In 1809, Finland accepted Tsar Alexander as their ruler and he made Finland a Grand Duchy, an autonomous part of the Russian Empire. He also moved the capital city to Helsinki.  

During the late 19th century, an interest in Finnish culture, language, and nationalism grew. By 1902, the Finnish assembly made Finnish and Swedish official languages. In 1907, Finland elected a new parliament and all men and women were allowed to vote. 

The Tsar declared he had the power to pass laws for Finland in 1910. However, the unrest in Russia and Finland during World War I and the subsequent collapse of the Russian Empire resulted in the Finnish Declaration of Independence, the end of the Grand Duchy in 1917, and a power vacuum in Finland. 

Regrettably, the leadership and control of Finland led to the Finnish Civil War of 1918. The struggle pitted the Reds and the Social Democratic Party against the Whites and conservatives, backed by the German Imperial Army. 

At the end of the war, Finns were to come under a German-led Finnish monarchy. Following Germany’s defeat in World War IFinland finally emerged as an independent democratic republic.  

Nonetheless, Stalin wanted to seize Finland to protect the Soviet Union’s northern flank in World War II. He offered the Finnish government other territories, but they refused. The Soviet Union invaded and the Winter War began in 1939.  

By 1940, Russian forces had penetrated Finland’s last line of defense and they were forced to sign the Treaty of Moscow, once again losing territory. By 1941, Finland joined Germany, attacked Russia, and recaptured their territory. 

In 1941, Britain declared war on Finland due to their alliance with Germany. Finland realized they must change their allegiance. Against Germany’s wishes they made peace with the Soviet Union in 1944 and signed a formal treaty in 1947.  

Finland’s economy slowly recovered after the war, but went through a series of booms and recessions. Finally in 1995, Finland had a stable economy and joined the EU.  

Today, Finland offers a highly-industrialized, mixed economy and an efficient democratic government. 

Other relevant facts 

Finland is a predominantly Christian (71.9%). Other religious affiliations include Islam, Hinduism, Buddhism, Judaism, and folk religion. 

According to the 2016 census, 89% of the population of Finland identified themselves as Finnish5.3% as Swedish1.3% as Russians, .8% as Estonians, and the remainder members of other ethnic groups.  

Additional Information for Business 

According to Forbes’ 2019 Best Countries for Business, Finland is the 13th best country in the world for conducting business.  

The 2019 Index of Economic Freedom rates Finland 20th globally. 

World Bank’s “Doing Business” rankings rate Finland 17th for ease of doing business in the world. 

Finland Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Finland. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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