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Finland Business Registration Guide 2026 — Oy, Toiminimi & Partnerships

starting a business in Finland. The guide covers: the legal forms available in Finland (Oy — Osakeyhtiö, the private limited liability company, minimum share capital €2,500, limited liability for shareholders, the most common form for serious businesses and startups, taxed under the corporate income tax at 20%; Toiminimi — the sole trader or self-employed person, no minimum capital, full personal liability, taxed through the personal income tax system (ansiotulo and pääomatulo), suitable for freelancers, consultants, and small service businesses; Avoin yhtiö — the general partnership, at least 2 partners, unlimited joint liability, taxed at the partner level; Kommandiittiyhtiö — the limited partnership, with at least one general partner (vastuunalainen yhtiömies) and one limited partner (äänetön yhtiömies), the general partner has unlimited liability, the limited partner's liability is capped at their capital contribution, taxed at the partner level; the branch of a foreign company (sivuliike) — no separate legal personality, the foreign parent is fully liable); the registration process through the Patentti- ja rekisterihallitus (PRH — the Finnish Patent and Registration Office) and the Verohallinto (Finnish Tax Administration) — the Y-tunnus (business identity code) application via the YTJ (YTJ — the Enterprise and Organisation Information System, the online portal at ytj.fi), the electronic registration process (typically 1-3 business days for an Oy, same-day registration for a toiminimi), the paper registration (1-2 weeks), the notification of the business's name, address, line of business, and contact details; the taxation by entity form (Oy — taxed at 20% corporate tax on worldwide profits, dividends are taxed at the shareholder level under the imputation system, the distributed profit is treated as pääomatulo up to 8% of the net assets of the shares and as ansiotulo above that threshold; toiminimi — the business profit is split into capital income (pääomatulo) taxed at 30%/34% and earned income (ansiotulo) taxed at the progressive rates up to 56.5%, the capital component is 20% of the net business assets for the first €5,000 and 10% thereafter; the partnerships — the partners are taxed directly on their share of the partnership's profit, with the same capital/earned income division as the toiminimi); the VAT registration (the obligation to register for arvonlisävero (ALV) when the annual turnover exceeds €15,000 (for most businesses), the ALV rates — 25.5% general, 14% food and restaurants, 10% accommodation, books, and passenger transport — the quarterly filing of VAT returns); the accounting obligations under the Kirjanpitolaki (Accounting Act) — the requirement to maintain double-entry bookkeeping for all businesses except toiminimi with simplified accounting, the annual financial statements (tilinpäätös) for Oys and partnerships, the electronic filing of the financial statements with the PRH; and the industry-specific licences (toimiluvat) — the food hygiene registration, the alcohol serving licence, the financial services licence from Finanssivalvonta, the healthcare professional registration with Valvira.

Finland offers a streamlined business registration process through the YTJ online portal. All amounts in Euros (EUR).

Legal Forms Overview

Choosing the right legal form is the most important decision when starting a business in Finland. The main options are:

  • Oy (Osakeyhtiö — Private Limited Company): The dominant corporate form. Minimum share capital of €2,500 (can be capitalised with cash or assets). Shareholders' liability is limited to their capital contribution. The company is a separate legal entity taxed at the corporate income tax rate of 20% on worldwide profits. Suitable for all types of business, especially where limited liability, growth capital, or multiple shareholders are needed.
  • Toiminimi (Sole Trader / Self-Employed): The simplest form for a single person. No minimum capital. Full personal liability — your personal assets are at risk for business debts. The business profit is taxed as your personal income (split into pääomatulo at 30%/34% and ansiotulo at progressive rates). Suitable for freelancers, consultants, artists, and small service providers.
  • Avoin Yhtiö (General Partnership): Requires at least two partners. All partners have unlimited joint and several liability for the partnership's debts. No minimum capital. The partnership is not taxed as a separate entity — each partner is taxed on their share of the profit.
  • Kommandiittiyhtiö (Limited Partnership): At least one general partner (vastuunalainen yhtiömies — unlimited liability) and one limited partner (äänetön yhtiömies — liability limited to their capital contribution). Taxed at the partner level, same as avoin yhtiö.
  • Sivuliike (Branch of a Foreign Company): A foreign company can establish a branch in Finland. The branch does not have separate legal personality — the foreign parent is fully liable. Must register with the PRH and maintain Finnish accounting records. Taxed at 20% on Finnish-source profits.

Registration Process (PRH & Verohallinto)

For a Toiminimi (simplified process):

  • Step 1: Register via the YTJ portal (ytj.fi) — provide your name, business name, address, line of business (Toimialakoodi), and contact details.
  • Step 2: The registration is typically processed within 1 business day. You will receive a Y-tunnus (business identity code) and be registered with both the PRH and Verohallinto simultaneously.
  • Step 3: You will receive a VAT registration confirmation and a tax prepayment decision (ennakkoveropäätös) from Verohallinto.
  • Step 4: Start operating. You can invoice immediately with your Y-tunnus.

For an Oy (full incorporation process):

  • Step 1: Share capital deposit: Open a bank account for the company and deposit the minimum capital of €2,500 (cash) or arrange capitalisation in kind. Obtain a certificate of deposit from the bank.
  • Step 2: Draft the articles of association (yhtiöjärjestys): The articles must include the company name, the municipality of the registered office, the line of business, the share capital, the number of shares, the composition of the board of directors, and the auditor (if required).
  • Step 3: Founding meeting (perustamiskokous): The shareholders hold a founding meeting where they adopt the articles of association, elect the board of directors, and appoint an auditor (if required). A written memorandum of the meeting minutes is prepared.
  • Step 4: Register with the PRH: File the registration application via the YTJ portal (electronic filing). The application must be signed by all founders (using electronic identification or physical signatures). The following documents are attached: the articles of association, the founding meeting minutes, the share subscription list, the bank certificate of capital deposit, the board consent declarations, and the auditor's consent (if applicable).
  • Step 5: Processing time: Electronic registration typically takes 1-3 business days. The company is legally formed and acquires legal personality upon registration.
  • Step 6: After registration: You receive the Y-tunnus, the VAT registration is completed automatically, and Verohallinto issues a tax prepayment decision. The company must open a bank account and set up bookkeeping.

Taxation by Entity Form

  • Oy (Limited Company): Taxed at a flat 20% corporate tax on worldwide profits. Dividends distributed to shareholders are taxed at the shareholder level: (a) dividends from listed companies — 25% tax-exempt, 75% taxable as pääomatulo (30%/34%); (b) dividends from unlisted companies — up to 8% of the net assets of the shares are tax-exempt, the remainder is taxable as ansiotulo (progressive rates). The company must file annual corporate tax returns (yhteisön veroilmoitus) and make monthly VAT filings.
  • Toiminimi (Sole Trader): The business profit is divided into capital income (pääomatulo) and earned income (ansiotulo). The capital component is 20% of the net business assets for the first €5,000, and 10% of the remaining net assets. The capital income (pääomatulo) portion is taxed at 30% (up to €30,000) and 34% (above €30,000). The remaining profit is taxed as earned income (ansiotulo) at the progressive municipal and state tax rates (total up to ~56.5%).
  • Avoin Yhtiö / Kommandiittiyhtiö (Partnerships): The partnership's profit is allocated to the partners according to the partnership agreement. Each partner is taxed on their share of the profit in the same way as a toiminimi — the profit is split into pääomatulo (30%/34%) and ansiotulo (progressive rates).
  • VAT (Arvonlisävero — ALV): All businesses with annual turnover exceeding €15,000 must register for VAT. The rates for 2026: 25.5% (general rate — most goods and services), 14% (food, restaurants, catering), 10% (accommodation, books, periodicals, passenger transport, cinema tickets, sporting events, pharmaceutical products). VAT is filed quarterly (monthly for larger businesses).

Accounting and Reporting Obligations

  • Bookkeeping (kirjanpito): All businesses except toiminimi with very small turnover must maintain double-entry bookkeeping. The accounting must follow the Finnish Accounting Act (Kirjanpitolaki) and generally accepted accounting principles (GAAP). Toiminimi with simple operations may use single-entry accounting (menotositteet).
  • Financial statements (tilinpäätös): Oys and partnerships must prepare annual financial statements within 4 months of the financial year-end. The statements must include a balance sheet, a profit and loss account, and notes. The financial statements must be filed with the PRH within 2 months of adoption.
  • Tax returns: Oys file annual corporate tax returns (yhteisön veroilmoitus) by the end of the 4th month following the financial year-end. Toiminimi and partners file their business income in their personal tax return (veroilmoitus) by May of the following year.
  • VAT returns: VAT is reported and paid quarterly (or monthly for large businesses). The return is due by the 12th day of the month following the end of the VAT period.

Frequently Asked Questions

Can a foreigner own 100% of a Finnish Oy?

Yes. There are no restrictions on foreign ownership of Finnish companies. A foreigner can be the sole shareholder of an Oy. The company must have a registered address in Finland for tax and legal purposes, but the shareholder and board members can be foreign residents. At least one board member must be resident in the EU/EEA, unless the company has a permit from the PRH to have a fully foreign board. All foreign board members need a Finnish personal identity code (henkilötunnus) or a foreigner's identity code (ulkomaalaisen henkilötunnus).

What is the difference between toiminimi and Oy for tax purposes?

The toiminimi is taxed as personal income (pääomatulo at 30%/34% + ansiotulo at progressive rates up to 56.5%). The Oy is taxed at a flat 20% on corporate profit, and dividends are taxed again at the shareholder level (partial exemption). For small profits (<€40,000), the toiminimi is typically more tax-efficient due to the capital income component. For larger profits, the Oy's 20% rate with retained earnings can be advantageous, especially if the profits are reinvested rather than distributed.

How long does it take to register an Oy in Finland?

Electronic registration via the YTJ portal typically takes 1-3 business days. The process can be completed entirely online with Finnish electronic banking credentials or Finnish personal identity codes. For founders without Finnish credentials, the process can be done by post or in person, which takes 1-2 weeks. The minimum capital of €2,500 must be deposited before registration.

Can I be a toiminimi and also be employed full-time?

Yes. It is possible to be both an employee and a toiminimi (self-employed) simultaneously. The employment contract may restrict side businesses, so check the terms. The toiminimi profit is taxed separately — the business income is declared in the personal tax return alongside employment income. The social security contributions (YEL) are based on the YEL income, not the actual profit, so you should set the YEL income appropriately.

What are the VAT thresholds in Finland for 2026?

The VAT registration threshold for 2026 is €15,000 in annual turnover (most businesses). If your turnover is below this threshold, you are not required to register for VAT or charge VAT on your invoices. However, you can voluntarily register for VAT, which allows you to reclaim VAT on your business purchases. The threshold for the small business VAT relief (pienyrityksen ALV-huojennus) has been eliminated as of 2025 — all VAT-registered businesses must charge and remit VAT at the applicable rates.

Disclaimer

This guide is for informational purposes only and does not constitute legal or tax advice. Business registration requirements, tax rates, and filing obligations vary depending on the specific activity, location, and legal form chosen. Consult a qualified Finnish accountant (kirjanpitäjä) or legal advisor (asianajaja) for advice tailored to your specific business situation. The information reflects the rules applicable in 2026 as of the date of publication.