Starting a business in Finland

[DMC]

if I choose a toiminimi ... I'd better not be in the red because my personal belongings, even my bed or my car can be seized, right?

I believe so.

Enterprise Finland states "A limited liability company may also be a single-member company" [but another] page states: "If there are fewer than three members on the Board, it must have at least one deputy member"
Does it mean that I need a deputy member

Yes

may I be this deputy member?

No. The deputy member has to be able to deal with the company's official business (taxes & accounts) if you are incapacitated.

If I can not be the deputy member, then does it mean it is not possible to create a single-member limited liability company?

No. The deputy member need not own any stake in the company.

[filecore]

I can help with a few more of these points:

2) Regarding responsibility, if I choose a toiminimi,
(Establishing a business >Different forms of business, Section 3)
this page states "A private entrepreneur is responsible for any liabilities of the business with his/her personal property."
Meaning that I'd better not be in the red because my personal belongings, even my bed or my car can be seized, right?

Correct.

5) May I NOT register to the VAT register as long as my turnover does not exceed EUR 8500?
(while of course keeping in mind that I will have to pay the whole of it, should my turnover exceed it)

Correct.

6) Enterprise Finland states "entrepreneurs are obligated to take out pension insurance." (Establishing a business >Social security cover for entrepreneurs)
However, the following page states "ownership does not require insurance to be taken out" (Establishing a business >Social security cover for entrepreneurs >Self-Employed Person's Pension Insurance (YEL))
So do I have to take YEL?
It also mentions this requirement to be fulfilled: "annual work income" must be "at least 6186,65 euro" (in 2008), so may I not take it if my income does not exceed it?

Correct.

7) In the residence permit application (for non-EU citizen), Chapter XIII asks "Has the applicant been convicted of a crime in any country?"
Let's say I had to go to jail for something like 2 months because I was responsible of a small traffic accident (on the road), and I could not pay someone who was wounded because of me.
Do you think that would rule me out?

I rather think they would consider that on a case-by-case basis, especially considering the nature of the criminal record. You would be best to contact the immigration office in person and asking directly.

Hope that helps to answer at least some of your questions.

[ochaya]

Hi,
I wanna thank you all for your comments: they were indeed helpful. I'll start hopefully next year and will continue preparing until then.
Many thanks!

[georgemossford]

Sounds a silly question but what is a Toiminimi and OY?

Like I said, OY is Osakeyhtiö, a limited company - all sorts of legal nonsense about that, but you can get a general idea of it here. A toiminimi is literally a toimi nimi = a business name. In other languages it'll be a small business or a lone entrepreneur; basically, it's a sole trader without the legal responsibilities of a limited company and probably your best bet for first starting out. It costs 65 euros to register a toiminimi.

You can download the 2006 copy of the Establishing A Business guide from this location (PDF), but bear in mind that some of the figures and percentages have changed in 2007/8 (eg YEL payments are now at 20.6% instead of 20.8%, and it fails to mention the young businesses' discount) - but there's good info. I'd recommend looking at pages 12-14, 16, 18, and 22-28 (a nice set of form to fill in about what you intend to do - helps get your ideas down on paper in an organised way).

This looks like a really useful document - as with so much of the information on this thread! Does anyone know if the 2007 or 2008 is available online yet? I've tried to find it on the original website but there is no much navigation in Finnish in order for me to be able to find it (there is only one main page in English).

Thanks!!

[aktan]

i ve my own company in moscow,fruit co
i am from turkey and ve work and living permission in russia
i want to open branch in helsinki and to make the same business for especially turkish fruit and vegetables

which steps i need first?

[filecore]

This looks like a really useful document - as with so much of the information on this thread! Does anyone know if the 2007 or 2008 is available online yet? I've tried to find it on the original website but there is no much navigation in Finnish in order for me to be able to find it (there is only one main page in English).

Even on the official Uusyrityskeskus pages, there is only the 2006 version, sorry. And one more note - I just fell foul of this problem myself - please remember to go and register MANUALLY at the tax office for INCOME TAX PREPAYMENT. This means you estimate your year's income and pre-pay tax for it each month. If you pay too little, you add it at the end of the year, and if you pay too much, you get money back. However, if you forget to do this, you're taxed the "normal" way - your earnings for 12 months are added, tax calculated, and given a huge bill. This is not good unless you have saved up enough money to pay off the bill! But the pre-payment does not happen automatically,it is an option; you must go to the tax office and get it arranged each year. This is not related to VAT, which is a whole different kettle of fish. I forgot last year's pre-payments and just got a bill for 4,000 euros

[mpjacko]

Hello,

To be honest, i've not had chance to read all the posts, i have just found it and i am on my way out. But will read it when i get home. Untill i do, can someone tell me a rough aprroximation to how much tax you pay. I.e if someone pays you 2000 euro for a service that you provide, i.e english club, if you set up your own busniess to do this in your spare time after work, how much tax can you expect to pay

thanks

[filecore]

I don't know what sort of tax you are referring to - please take the time to read the entire thread, as it is all outlined in these messages. But to attempt a brief answer:

You start an English club. You charge fees resulting in a total income of 2000 euros. What you would need to do depends on the following main things:

1) do you earn (or plan to earn) more than 8500 euros per year? If yes, then:
a) you need to be registered as VAT-liable
b) you need to add 22% onto your invoices (so if you invoiced me for 400 euros, the total would be 400+22% = 488 euros). You will then pay this VAT within two months to Vero.

If no, then:
c) simply invoice your client(s) and forget about any VAT

2) do you earn (or plan to earn) more than 6500 euros per year? If yes, then:
a) you need to be registered to pay self-employed persons' pension (YEL) which is 15.45% for the first 48 months

3) otherwise, you need to pay income tax (ennakovero) as normal, the total amount (%) of which depends on your annual income. For a company, you can estimate your annual income and, based on that, use the Verolaskuri (online Tax Calculator at http://www.vero.fi) to work out your rate of income tax. You need to register to pre-pay this each month in advance, or you can simply wait until the end of the year and receive an annual bill from Vero.

As you see, there is no 'simple' answer - it depends on a number of factors. If you want more detailed help, you'll have to not only read all of this thread, but also provide more detailed information about your (estimated) annual income and company's status (registered/liable for VAT, registered/liable for YEL, registered/liable for income tax prepayment, as appropriate). Where are you based? Perhaps it would be easier to meet up with somebody and go over the details of these, and see examples of paperwork. There are also professional organisations out there whose sole purpose is to help lone entrepreneurs like you and I, which are often very helpful and many of whom are happy to discuss and provide materials in English. Maybe I should write a webpage as a beginner's guide to setting up a company in Finland, which would save me from having to constantly repeat all of this.

Best of luck,

Jason

[filecore]

This looks like a really useful document - as with so much of the information on this thread! Does anyone know if the 2007 or 2008 is available online yet? I've tried to find it on the original website but there is no much navigation in Finnish in order for me to be able to find it (there is only one main page in English).

It's quite well hidden. I've saved a copy of the 2008 version - Establishing A Business (2008).pdf (376kb).

[Rosamunda]

Maybe I should write a webpage as a beginner's guide to setting up a company in Finland, which would save me from having to constantly repeat all of this.

..."constantly" ???

You have only posted 18 posts...

Anyway, there are quite a few webpages out there and books and now a new walk-in public service in Kamppi called "Into" http://www.intofinland.fi

[filecore]

..."constantly" ???

You have only posted 18 posts...

Ah, sorry, that's a mistake I often make, thinking that anything exists outside of finlandforum.org. I see I'll have to get the doctor to increase my medication again.

[Rosamunda]

OK OK.... in which case it is strange that you feel the compulsion to create something (start-up webpages) that exists already on the web and in the real world.

The problem (and the reason why you have to keep repeating yourself) is that most people want it all on a plate. They just can't be arsed to read through the book, the threads, the webpages. On the one hand I think it is great that people are willing to put their ideas into action and take all the risks of going into business, but on the other, many of them are just mistakes waiting to happen. There is no short cut to making a VAT return, or filing YeL payments etc. etc. etc. And there are no big tax breaks either: a TMI doesn't mean you stop paying income tax, an Oy doesn't mean you stick all the profits in your pocket.
And, I've noticed (both on here and out there) that most people when given advice that goes against the grain, just ignore it or assume you've got it all wrong.

So, it doesn't matter how many times you repeat yourself, or how many webpages you write, or how many books you publish, there will always be people asking the same questions.

[filecore]

Well, my biggest flaw is that I'm generally willing to help people. And I know that for every ten people who are successful, there are another hundred who have failed - but I didn't really have anyone to advise me back when I started, at least not to explain it in simple terms, and I made quite a few mistakes (god knows I don't understand anything to do with numbers or percentages). But I'm glad I stuck with it, especially as the jobs I have previously been in have gone down the drain and a lot of former colleagues have told me that I'm lucky I got out when I did, so if I had somebody dissuading me from going down the toiminimi route back then, I'd probably be jobless and struggling to pay the bills right now. That's the reason I'm so happy to help. But I'm trying to clarify that it's not easy, and it's not a big money-earner, and if people choose to ignore that, well, I've done all I can and it's no longer my problem; I can make information more accessible but I can't fix stupidity or pigheadedness.

[Rosamunda]

Totally agree on all of that.

BTW:

It's quite well hidden. I've saved a copy of the 2008 version - Establishing A Business (2008).pdf (376kb).

It's a nicely laid out document and contains the essential info (for free) but it is not quite as detailed as Holopainen's book (which is expensive but the library service has it). Somebody asked me about auditors this week and I noticed reading through that document that the info on audit requirements for limited companies is incomplete.


Anyway... mpjacko needs to do a lot of homework. Understand the difference between business revenues and personal income and the difference between company tax, personal taxation and VAT. S/he needs to decide what kind of business she wants to establish (TMI, Oy etc) first, before anyone can answer the tax questions. And if the "English club" involves the day-care of small children then she will probably need to apply for a permit from the municipal offices.

[MC Deli]

This looks like a really useful document - as with so much of the information on this thread! Does anyone know if the 2007 or 2008 is available online yet? I've tried to find it on the original website but there is no much navigation in Finnish in order for me to be able to find it (there is only one main page in English).

It's quite well hidden. I've saved a copy of the 2008 version - Establishing A Business (2008).pdf (376kb).

yup - that's a great read - thanks