Investment options in Finland

[doajob]

I was recently reading a very good book on the options available to people with savings in the UK.

There was a variety of tax efficient schemes, which seemed very good in comparison to what is available here.

Is there anywhere or anyone on the site who can advise about some of the basic investment options available to us here in Finland, preferably ones that can be made with pre-tax income eg. self directed private pensions, interest only mortages on property, ISA, tax free thresholds on CGT gains etc

Or do we all get hammered with tax as soon as we invest our savings?

PS - I have a tmi but may soon switch to oy.

[betelgeuse]

I was recently reading a very good book on the options available to people with savings in the UK.

There was a variety of tax efficient schemes, which seemed very good in comparison to what is available here.

Is there anywhere or anyone on the site who can advise about some of the basic investment options available to us here in Finland, preferably ones that can be made with pre-tax income eg. self directed private pensions, interest only mortages on property, ISA, tax free thresholds on CGT gains etc

Or do we all get hammered with tax as soon as we invest our savings?

https://www.veronmaksajat.fi/Sijoittaminen/PS-tili/

You can get pre-tax earnings to PS-tili up to a limit. However, I haven't found any good products from investment providers.

I would guess that because of the mandatory contributions to the state controlled pension scheme, there's been less interest to motivate people to save for pensions in contrast to countries which don't have a mandatory system.

PS - I have a tmi but may soon switch to oy.

Oy will allow you to have the company invest the money which means only corporation tax will be payable so it's indeed a better solution (assuming the income is high enough that the benefits are larger than your personal taxation). If you invest in things like real-estate, then depreciation at 4% will help lower the tax rate quite a lot.

[doajob]

Ok thanks for that! Not too many options available to the ordinary saver beyond the state run pension scheme...

Do you have any similar links where I could check the options available to oy companies?

I'm more interested in dividend paying stocks and also ETFs, rather than property.

[betelgeuse]

Ok thanks for that! Not too many options available to the ordinary saver beyond the state run pension scheme...

Do you have any similar links where I could check the options available to oy companies?

It's unlikely you will manage to run an OY without professional help in the beginning (accountant). The options come down to understanding taxation legislation for corporations which is not a small topic. Capital redemptions contracts have been used to simplify accounting and shifting taxation. As with PS-tili they come with costs and I haven't evaluated them myself:

http://www.finanssivalvonta.fi/en/Finan ... fault.aspx

I'm more interested in dividend paying stocks and also ETFs, rather than property.

The handling is pretty similar except for the fact that you can't depreciate the former.

Talk to your bank... we got the run down on managed share funds from OP.

But don't buy their managed share funds without shopping elsewhere. The majority of them are ripoffs with unjustifiably high management fees. For Nordic index funds it's extremely hard to beat the Nordnet super funds (the management company would have to be paying the investors instead of the other way around):

https://www.nordnet.fi/super

[doajob]

Not too many options available to the ordinary saver beyond the state run pension scheme...

And not a good one to invest either, with changing Pension age, you might have to reach 85 till you can claim your own money back.

Totally agree! I'm putting the minimum amount I can into the YEL programme.

The Nordnet link was great, thanks, although I have little interest in investing in the Finnish (or any Nordic) markets.

I believe there needs to be major regulatory and tax reforms to make Finland and Finnish companies competitive again.

Hopefully the good work that Estonia is continuing to do will force Finland down the same path!

[betelgeuse]

And not a good one to invest either, with changing Pension age, you might have to reach 85 till you can claim your own money back.

Totally agree! I'm putting the minimum amount I can into the YEL programme.

The law requires your YEL level to match the salary of a person hired to work in your place so if you follow the law you don't have much leeway in choosing the level. In practice there's little enforcement for this.