Starting a business in Finland

[fatherchristmas]

I moved to Finland about 6 months ago, I have full residence status, married to a Fin, home owner. I am self-employed but receive all my income from outside the EU. Prior to moving to Finland I averaged around 150 000 euro before expenses and staff costs. I also do most of my production work while outside the EU. What I need to find is the best English-speaking Tax lawyer who can advise me on what I am liable to pay here.

[Rosamunda]

The best tax advisor would probably be the tax man himself. Sounds nuts! But Vero is helpful and will work WITH you to give you a fair deal. At least that is the impression we have had whenever we have dealt with them.

Anyway, if you have full resident status in Finland you basically have to declare all your personal income here. Same as anyone else.

As for your company... that's another matter. I guess you could leave your company wherever it is, that would depend on the local company and taxation rules in that country.

You might want to start a new thread with a different title like "International Tax Lawyer needed" or something like that, your question will be more visible that way.

[fatherchristmas]

Thanks penelope! I will need to do that soon since I've just opened my first bank account here at opkk after Nordea refused to open one for some strange reason.

[jully_jully]

Help: may i sell anything if i did not register a firm in Finland?

Hei,

I'm a green-hand in establishing a business. after benchmark, i'm planning to make a try in one trend.
these days, i got some samples and plan to sell them when introducing them to market.

but i have the concerns, May i sell them if i did not register a firm here?

Thanks for your answers.
Jully_jully

[filecore]

but i have the concerns, May i sell them if i did not register a firm here?

Hello. I didn't fully understand exactly what it was you were wanting to sell, but I'll tell you that if you're planning to sell to the general public, it's pretty much illegal (grey market economy) to sell without registering for income tax and VAT payments. In Finland you generally need to be licensed up to the eyeballs to get anything done. If you sell to other companies, you'll show up on their tax invoices and the tax office might get suspicious and end up investigating. It's not worth the risk, or the hassle - especially when it's so easy to set up and register a company, if you have a good enough product to sell and a market to sell it in.

[Rosamunda]

In order to answer your question we need to know

a) what are you selling (some trades are subject to a permit eg: pharmaceuticals, chemicals, credit and insurance, airline services, fodder and seeds, metals, etc etc etc)

b) where you are resident. You have to be a permanent resident in the EEA (European Economic Area), otherwise you need a trade permit whatever line of busines you are in (and whatever your nationality, even if you are Finnish).

If you already have a company in another (non EEA) country you can trade here by setting up a branch of a foreign organisation. Permission to do this is given by the National Board of Patents and Registrations. Another solution would be to find a Finnish distributor for your products, ie an import company that is already trading in Finland.

There is a lot of information about setting up companies on this forum and you can find it by using the search engine or following some of the links in this thread.

[MovingToFinland]

If you have just moved to Finland you can also go to In To -servicepoint. In To can also give guidance on social security and taxation matters for self-employed persons. More information you can find www.intofinland.fi and www.yrityshelsinki.fi.

[Argentiinalainen]

This post has been very illustrative. I may ask some questions pretty soon for I need to learn something about several business.

by the way, do people work walking dogs over there?

[Argentiinalainen]

If you have just moved to Finland you can also go to In To -servicepoint. In To can also give guidance on social security and taxation matters for self-employed persons. More information you can find http://www.intofinland.fi and http://www.yrityshelsinki.fi.

I'll check out that info!!!!

Kiitos!!

[filecore]

Hi, I have a more general question for all the other entrepreneurs out there: holidays. When I go on holiday, I'm not earning. I don't get holiday pay or any other sort of compensation. For the last couple of years I've been eyeing holidays pensively, because I know that I can't fully relax while worrying about how low my month's income is going to drop while I'm off somewhere not earning (incidentally, a similar thing regarding sick days). What I'd like to know is this: am I saddled with working 365 days/year for fear of low income, and any holiday is reflected by a solid lump of income missing? Or is there some provision for entrepreneurs taking holidays that I'm not aware of? Because I'm starting to feel guilty every time I take time off, because I know my monthly average will be dangerously low, and that's not a good way to live. Thanks for any input.

[onkko]

Hi, I have a more general question for all the other entrepreneurs out there: holidays. When I go on holiday, I'm not earning. I don't get holiday pay or any other sort of compensation. For the last couple of years I've been eyeing holidays pensively, because I know that I can't fully relax while worrying about how low my month's income is going to drop while I'm off somewhere not earning (incidentally, a similar thing regarding sick days). What I'd like to know is this: am I saddled with working 365 days/year for fear of low income, and any holiday is reflected by a solid lump of income missing? Or is there some provision for entrepreneurs taking holidays that I'm not aware of? Because I'm starting to feel guilty every time I take time off, because I know my monthly average will be dangerously low, and that's not a good way to live. Thanks for any input.

You earn your holidays by working, if work doesnt do enough income then you dont have a holiday or accept that your income is lower.
If youre farmer then due animal health and safety you are allowed some days off with goverment support, if not then youre on your own.
For sick days you can insure yourself.
Basicly you are in 365 days of work 8am to 10pm if you dont make enough to afford take time off.

[willow77]

Wow, lot of great info on here.

Question:

If i start a Toiminimi and during the stage of getting it started still work for another company, is the 8,500euro ceiling specific to the toiminimi or my entire income (job + toiminimi).

....and are there any grants available or favorable loans to get started?

Thanks,

W.

[Rosamunda]

Wow, lot of great info on here.

Question:

If i start a Toiminimi and during the stage of getting it started still work for another company, is the 8,500euro ceiling specific to the toiminimi or my entire income (job + toiminimi).

....and are there any grants available or favorable loans to get started?

Thanks,

W.

Which 8500 euro ceiling are you talking about?

VAT?

VAT is not payable on your salary, even in Finland


The 8500 euro threshold for VAT registration is based on your toiminimi's REVENUE ie: what you INVOICE to your customers.

Any income from salaried employment is subject to TEL deductions (social security, unemployment and pensions and maybe union fees etc) and income tax payable on a PAYE (Pay as you earn) basis AT SOURCE (ie your employer pays it for you).

Your TMI's profits and your salary are combined to calculate your effective global income tax rate. This will be adjusted at the end of the year (ouch) so it's best to estimate your total earnings and discuss with Vero what your tax rate should be.

Concerning VAT: VAT is payble on your TOTAL toiminimi revenue as soon as you hit the 8500euro threshold. So if you think that your trading income will exceed that amount then you should probably register for VAT straightaway and start paying it as soon as you start trading.

You can get starttiraha from the TE-Keskus but not if you also have a salaried job. It is a small amount which basically keeps you alive (food) while you start up your business. I don't think it can be used as your startup capital (eg if you are registering an Oy). If you want venture capital then you need to book an interview with the TE-keskus.

[willow77]

Penelope, many thanks for the information, yes i was referring to the VAT.

I assume this would be calculated per year? and if so, if i started my business in July is it prorated or does that mean i have 6 months in order to reach the 8,500 VAT ceiling?

Thank you again for your previous response, most helpful.

W

[Rosamunda]

Penelope, many thanks for the information, yes i was referring to the VAT.

I assume this would be calculated per year? and if so, if i started my business in July is it prorated or does that mean i have 6 months in order to reach the 8,500 VAT ceiling?

W

VAT is due when the revenue of the "accounting period" exceeds 8500 euro. So in other words, 12 full calendar months (the accounting period can be from 1st July to 30th June for example). But I would STRONGLY recommend that if you believe your revenue will exceed 8500e over the first 12 months of trading you should register for VAT and invoice VAT to your customers right from the start (unless you are exporting all your business). If you hit 8600 euro in the accounting period you will be liable to pay VAT on the whole 8600 euro (not just the 100e above the ceiling).

VAT is due on the 15th of the second month following revenue from trading. So, on the 15th July I pay VAT on my sales from May. Net of any deductions of course.

I recommend you borrow "Establishing and Doing Business in FInland" by Tuulikki Holopainen from your local library. There is a whole chapter on VAT (in English and in Finnish). Make sure you get the latest edition (2007). There is also a useful chapter on YEL (obligatory pension fund) and regular taxation.