Legal advice for investing in an Oy

[STALTZ]

Hi, I am a foreigner living in Finland. Previously a student, now an entrepreneur.

My startup is still in early stage, not even legally registered yet (but I will do so soon), and a family member of mine from Brazil wants to invest in the company.

Do I need legal assistance for establishing the Oy and getting the first investment? And if yes, where do I get such legal assistance? Is it expensive?

I am really thankful if anyone is able to answer this. It is really important to me.

Thank you,
Andre

[Upphew]

Hi, I am a foreigner living in Finland. Previously a student, now an entrepreneur.

My startup is still in early stage, not even legally registered yet (but I will do so soon), and a family member of mine from Brazil wants to invest in the company.

Do I need legal assistance for establishing the Oy and getting the first investment? And if yes, where do I get such legal assistance? Is it expensive?

I am really thankful if anyone is able to answer this. It is really important to me.

Thank you,
Andre

http://www.yrityssuomi.fi/web/enterprise-finland

[Rosamunda]

There are several threads on this forum about starting up a business in Finland. It's worth ploughing your way through them.

If you were a student you could go back to your school/uni and ask them for advice; nowadays most have some kind of Start-up office for helping students to set up their own business.

You can also look on here: http://www.yrityssuomi.fi/web/enterpris ... 2E6CCB8C8D

And there are info sessions and free training courses held in most big cities: http://www.yrityshelsinki.fi/en/ajankoh ... pring-2013

There are rules on non-EU residents starting up businesses in Finland but if you have permanent residency then using a loan from a relative shouldn't be a problem. Just remember to keep your personal finances separate from your company accounts.

[cors187]

Hi, I am a foreigner living in Finland. Previously a student, now an entrepreneur.

My startup is still in early stage, not even legally registered yet (but I will do so soon), and a family member of mine from Brazil wants to invest in the company.

Do I need legal assistance for establishing the Oy and getting the first investment? And if yes, where do I get such legal assistance? Is it expensive?

I am really thankful if anyone is able to answer this. It is really important to me.

Thank you,
Andre

Are you asking can you get a "grant for the start up money = OY registration costs etc + the OY named bank account with 2500 euros in it?
You can get free assistance in those links provided(info and a small amount of strategy info).

[cors187]

There is rather a numerous amount of info availible.Vero has the no frills info , writing style much like you would find in a tax treaty between countries etc.
There are other sites and info that lays it out nicer for sure.
http://www.vero.fi/en-US/Precise_inform ... 2821994%29

I think there is a couple of pertinent steps you need to understand at first.
1.Of the registrants of the OY (you and who ever), one needs to be classed as (Domicile EU).
In the english translation its called (The municipality of residence) http://www.maistraatti.fi/en/Services/p ... formation/
This means you or your partners need 1 person with a permanent address or else the registration process classifies you as something different, possibly likened to a foreign company with no permanent establishment.
2. The second point is if your working the OY as "owner/operator" i guess for lack of understanding.
This means the OY can be making money and you are working in the OY as the director maybe, but if you employ someone else, then you need to be aware that you have more obligations than when you first started operations.
I think the rest gets in to specific area ,like tax and other stuff pertaining to your needs.
The best part about those free business seminars is they will give you confidence and assurance , those 2 things you need to compete , or else your a panic induced owner who is easily dispatched by his competition.

[cors187]

Well , well.

According to startup info.Foreigners and anyone with a Finnish Social number can start up.

http://www.yrityssuomi.fi/web/enterpris ... ty-company

There must be one or more founders in a limited liability company.

The new Companies Act does not any restrictions for the place of residence or domicile for share subscribers (even if the question is about a single-member company).

It must also be noticed that if a limited liability company is a single-member company, that is, the company has only one shareholder and he/she is the only member of the Board, the Board must then have at least one deputy member.

Additional clarification for foreigners:
- For a foreign person (By foreign person it is meant a person who does not have a Finnish social security number.): a copy of the person's passport or other reliable clarification of identity
- For a foreign company which is a shareholder: an extract from the register of the company's home country.

[cors187]

Actually with out editing or deleting info.I have been studying online about the exact minimum circumstances to start an OY.
When i first posted viewtopic.php?p=487874#p487874
I was using info from http://www.masuuni.info/articles/521/ , which is the English business pamphlet.
When i read this http://www.yrityssuomi.fi/web/enterpris ... ty-company , i thought maybe some changes have occurred since , but as of the date of this post i still see that http://www.yrityssuomi.fi/web/guest/pal ... rustaminen is still linking pamphlet _20110524.pdf

(Remember the context of this quote)-It must also be noticed that if a limited liability company is a single-member company, that is, the company has only one shareholder and he/she is the only member of the Board, the Board must then have at least one deputy member.

Looking down further in bold letters.
Page 25-26 of the pamphlet.

Limited company (oy)
A limited company may be established
by one or more people or organisations.
When the company is being set
up, the founders register all the company’s
shares. In a private limited company,
the share capital must be at least
EUR 2,500. The Finnish Companies
Act does not specify anything about
the residence or domicile of the shareholders,
i.e. the founding shareholders
of a limited company may also be from
outside the EEA area.
The shareholders are liable for the
company’s commitments only to the extent
of the capital that they have invested
in the company, unless they have
guaranteed loans on behalf of the company.
Issues relating to a limited company
are decided on by the shareholders.
A person who has more shares also
gets more decision-making power (and
more voting power). A limited company
must have a board of directors that the
shareholders appoint. The board takes
care of management of the company,
and it represents the company. The
board may elect a managing director
for the company, who takes care of its
day-to-day management. However, the
appointment of a managing director is
optional. The managing director can
also be elected in the initial agreement
created on foundation of the company
or at a meeting of the board held at a
later date.
If the board of a limited company
comprises less than three members,
at least one deputy member must also
be appointed. At least one of the board
members and one of the deputy members
(calculated separately) must have
permanent residence in the EEA area.
If they don’t, a licence must be sought
from the National Board of Patents and
Registration of Finland for all ordinary
members or deputy members who are
from outside the EEA area

After clearing those facts up,last year i was given some start-up advise in a meeting from a source of
http://www.yrityssuomi.fi/web/guest/pal ... rustaminen
http://www.yrityshelsinki.fi/en
I quoted both of them because both are directly linked by the gov.fi system.

In anycase it referred to the matter of >The municipality of residence http://www.maistraatti.fi/en/Services/p ... formation/, and that the advice was so that if the Deputy member has EEA permanent residence , then everything fits in nicely and no problems at all.
So i guess i am highlighting the fact that it appears as though 2 non permanent EEA residents can open the OY with approved license(to get approved license is another story),but just having the Deputy board member as EEA changed the whole outcome or changed the dynamics of the application.
By the way, a deputy board member can be named on the board and by the law receive no salary/shares/no payment/ever.This is not so for ordinary board members.
I hope i got everything right as i don't want to quote some out of date info.

[cors187]

Relevant Info for Non "EEA permanent" who need the license.
http://www.prh.fi/en/kaupparekisteri/yr ... mitedcompa

Permits to persons from outside the European Economic Area (EEA) to hold managerial positions in businesses or to establish a branch

The National Board of Patents and Registration (NBPR) grants, on application, permits to persons coming from outside the EEA to hold managerial positions or other positions of responsibility in businesses. The person’s nationality does not decide whether a permit is needed or not. The permanent place of residence or the legal person’s domicile, on the other hand, is of greater importance. Local Register Offices (‘maistraatti’ in Finnish) give further information on how a permanent place of residence in Finland is determined.
http://www.maistraatti.fi/en/Services/p ... formation/

You also need a permit from the NBPR to establish a branch of an organisation or a foundation that is from outside the EEA.
A permit may also be needed in some less common situations. Thus the manager of a European Economic Interest Grouping must be a resident of the EEA, unless the NBPR grants a dispensation from this requirement, whereas in a tenant owners’ society (right-of-occupancy housing) at least one Board member, deputy Board member and Housing Manager must be a resident of the EEA. Otherwise they would need an exceptional permission from the NBPR. Besides permits for foreigners in businesses, special provisions have also been given on permits to foreigners in foundations and associations.
Limited company or housing company

Question: Can a foreigner be a shareholder /Board member/Managing Director (Housing Manager) in a limited company?
Answer: The nationality of the person is not a decisive factor. What is essential is in which country he or she lives permanently. In certain cases a person residing outside the European Economic Area (EEA) needs a permit from the NBPR.

Shareholder
In regular businesses there are no restrictions based on the place of residence or domicile, or nationality, regarding the right to own shares. There are, however, some rare special situations which are governed by the Act on the Monitoring of Foreigners’ Corporate Acquisitions in Finland.

Ordinary/Deputy member of the Board of Directors
If at least one Board member is a resident of the EEA, no permit is needed. In other cases a permit from the NBPR is required.

Please note: the situation is, however, looked into separately for the part of ordinary members and deputy members respectively.

An example: A company’s Board of Directors consists of three ordinary and two deputy members.
Ordinary members:

A Swedish citizen residing in Thailand
A Canadian citizen residing in Portugal
A Japanese citizen residing in Japan]

Deputy members:

A U.S. citizen residing in Germany
A Chinese citizen residing in China

No permit from the NBPR is required, because “at least one” of both the ordinary and the deputy members (even computed separately) are residents of the EEA. Should none of the ordinary members live in the EEA, all of them would need a permit granted by the NBPR.

The above described principles concerning Board members also apply to members of the Supervisory Board and liquidators, should there be any.

[cors187]

http://www.prh.fi/en/kaupparekisteri/yr ... forapermit

Applying for a permit

Question: How is a permit needed by a foreign entrepreneur or organisation to serve in a business applied for?
Answer: The permit is applied for by a written application, free in form, giving the grounds why the permit should be granted. The application must be filed either in Finnish or in Swedish.

The application must state the following:

The name, nationality and place of residence of the applicant as well as the State in which the place of residence is located. If the applicant is an organisation, its name and domicile and the State in which the domicile is located.
The permit or permits applied for (for example a permit to act as a founder or a member of the Board of Directors of a limited company).
The company name, the business ID must also be indicated if the company already has acquired it.
The grounds why the permit should be granted.
The postal address and other contact details (such as phone number) of the applicant or his/her representative.

If several permits are applied for with regard to the same business, the applicant can file one single application in which all the permits applied for and all the applicants are identified. The application must be dated and signed by each applicant or the person authorised by the applicant to sign it by a Power of Attorney. If the applicant is an organisation, the persons authorised to sign for the organisation may sign the application. If the application is signed by a Power of Attorney, the application must be accompanied by that Power of Attorney.

The application fee (120 euros) is payable for each permit. If the permit is sought for three members of the Board, three fees are collected (a total of 360 euros). The fee must be paid after the decision to either grant or deny the permit has been taken. If the NBPR sends both the decision and the invoice to you by mail, there will be an additional charge of 12 euros for delivery and invoicing.

Please note: When you report a matter to which the NBPR has granted a permit, please also submit a certified copy of the decision on the granting of the permit together with the notification to the Trade Register.
Question: What enclosures are usually required in support of a permit application?
Permit for a member of the Board of Directors or for a Managing Director in a limited company

When establishing a company

Certified copies of the Memorandum of Association and the Articles of Association of the company being formed.
If the old Limited Liability Companies Act is applied to the establishment, also the minutes of the Constituent Meeting .
If a permit is sought for the post of the Managing Director, a copy of the minutes of the Board of Directors must also be enclosed.
If the applicant does not have a Finnish personal identity code, a photocopy of his or her passport .
If the application is made on the basis of the old Limited Liability Companies Act and does not relate to a company referred to in the Housing Companies Act, consent to the task in writing has to be enclosed with the application if the applicant does not personally sign the application.
If the application is accompanied by a document in a foreign language, a translation thereof into Finnish or Swedish.

If a permit is sought when members of the Board of Directors or the Managing Director of an already established company are changed

A certified copy of the minutes of the meeting in which the election was made. Decisions regarding the election of the Board of Directors are usually taken by the General Meeting, whereas the Managing Director is in regular companies elected by the Board of Directors.
If the applicant does not have a Finnish personal identity code, a photocopy of his or her passport.
If the application is made on the basis of the old Limited Liability Companies Act and does not relate to a company referred to in the Housing Companies Act, consent to the task in writing has to be enclosed with the application if the applicant does not personally sign the application.
If the application is accompanied by a document in a foreign language, a translation thereof into Finnish or Swedish.

[cors187]

http://www.prh.fi/en/kaupparekisteri/yr ... tprocedure

The permit procedure

The NBPR has granted a permit to a branch of a foreign trader if the parent body is duly registered in its home country. For other company forms, the granting procedure has, on the other hand, been quite strict. Some examples:

Private traders: The NBPR has granted a permit to persons who live permanently in a country that has acceded to the Lugano Convention. In practice, this means persons who live permanently in Switzerland.
Partners of general partnerships and general partners of limited partnerships: The NBPR has granted a permit to persons who live permanently in a country that has acceded to the Lugano Convention. In practice, this means persons who live permanently in Switzerland. When you apply for a permit for a legal person to be a partner, it is relevant in which country the legal person has its domicile (the municipality where the operations are managed).
Ordinary members of the Board of Directors of a limited company: The NBPR has granted a permit to persons who live permanently in a country that has acceded to the Lugano Convention. In practice, this means persons who live permanently in Switzerland. The NBPR has also granted a permit to US citizens who live permanently in the United States. This is based on a Treaty of Friendship, Commerce and Consular Rights between Finland and the United States.
Managing Director of a limited company: The NBPR has granted a permit if at least one person who lives permanently in the European Economic Area is an ordinary member of the Board of Directors. The NBPR has also granted a permit to US citizens who live permanently in the United States.

These examples give a general idea of the permit procedure. Please remember however that an application will not be assessed and decided until during the actual processing

.

[cors187]

For the NON EEA Resident there are 2 types of permanent they would encounter.
http://www.migri.fi/residence_permits/permit_types

A residence permit may either be for a fixed term or be permanent. A fixed-term residence permit is granted according to the nature of residence either as a temporary or a continuous residence permit. The first residence permit is always issued for a fixed term.

The nature of residence permit is indicated in the residence permit with a letter. A continuous residence permit bears the letter A and a temporary residence permit the letter B. A permanent residence permit bears the letter P and an EC residence permit for third-country nationals with long-term EC resident status bears the letters P-EY.

The other type of permanent is a Permanent residing address as Opposed to the Temporary Residing address.
Look below for bold type.
http://www.maistraatti.fi/en/Services/p ... otikunta_3

Registration of foreigners

The basic data on foreigners residing in Finland are entered in the Population Information System. Registered information includes name, date of birth, nationality, familial relationships and address. A Finnish municipality of residence is registered for a foreigner who has moved to Finland if he or she plans on staying here permanently and if he or she has a residence permit for at least one year. Citizens of Nordic countries do not need residence permits.

Under the law, a foreigner is required to register the same information as Finnish citizens if he or she resides in Finland for at least one year. The registration takes place at the local register office. The registered information is used, amongst other things, in the organisation of elections, and for taxation, health care, juridical administration and statistical purposes.

Temporarily residing foreigner

A foreigner residing temporarily in Finland can also receive an identification number if he or she needs one, for example in order to work. The one requirement is that the person has to have a residence permit at least for the period of one year. However, a municipality of residence will not be registered for him or her, nor will he or she necessarily enjoy the same rights as a person residing in Finland permanently. Citizens of Nordic countries are not required to report to the local register office, unless they plan on residing in Finland for a period exceeding one year. In this case, the person moving is required register as a foreigner in addition to making a change of address notification, unless he or she has already been assigned a personal identity number in Finland.

The key to the OY licensing requirements for Non EEA must be evident in Acceptance of the Maistratti "Permanent Residing Address"=municipality of residence , and not the "Migri permanent residence".