Business registration is not the important thing. What matters is business turnover and profit. You may find it useful to register a trading name for use in economic activity where you have no employer, but only if this activity is really going on to some appreciable degree. Small traders often have no specific need for a separate trading name, other than as a personal accounting device.nothingelse wrote:Hi Daryl, given I was divorced after I got the second A resident permit, and I had no job right now, is it possible for me to get a permanent resident permit if I register a company here and self-employed?
In other words, if you are completing orders and receiving payment, then you are already in business. This has tax consequences and the tax authority will expect you to provide some forecast of the profit that you expect to make. This forecast becomes the basis for your ongoing tax payments (which are then adjusted after the year ends). You also have a legal duty to arrange private pension coverage under the YEL scheme, again based on a forecast of income from self-employed work. Your business trading may also be subject to VAT regulations.
Whether you then trade under your own name or some special trade name (registered or otherwise) is up to you. I recommend using a separate trade name if you are working both as an employee and also in your own business at the same time, as this simplifies your personal accounting. The only important advantage of registering this trade name is that you may then use the name exclusively.
If you intend to rely on your business as a reason for remaining in Finland, then it is especially important to build up the business to a level at which you can support yourself (or at least to show that the business is growing in this direction). Ultimately this is what matters. Merely registering a trade name does not provide grounds for remaining in Finland. This is where it may be wise to consult your local MTI advisory service, as they can help you to sort out your business ideas and are useful allies to have when the continuation of your business depends on various permit procedures (such as residence permits).
It's also worth bearing in mind the difference between being self-employed and owning a corporate business enterprise. Merely owning shares in a Finnish business does not create a connection to Finland that would be a reason for living in Finland (most of the owners of Nokia Corporation live abroad and have no grounds for securing permission to live in Finland). Instead, this connection arises because of a personal input that is essential to the business operations.
For various reasons, this means that forms of business involving full personal liability (as a sole trader or responsible partner) tend to be more convincing than limited liability corporations (limited companies) when arguing that personal input is essential to the business. Of course, this does not mean that a very small company with only one or two employees (one of whom is you) would not obviously qualify. However, the odd fact is that a residence permit applicant who owns 100 per cent of the shares in a business yielding an annual pre-tax dividend of 40,000.- is less likely to get the permit than an applicant who earns an annual pre-tax profit of 40,000.- from the same line of business as a sole trader, even though the difference between these situations is more a matter of accounting than substance.
That does not mean that you should avoid limited liability enterprise forms where they are appropriate, but it does mean that you should be clear about why you prefer to trade as a limited liability corporation. There is no obvious reason why a self-employed music teacher, for example, needs to trade as a limited company. Given the additional administrative work that is involved in running a Finnish osakeyhtiö, this just seems ridiculous. On the other hand, if you operate an import-export or manufacturing business involving substantial commercial risk, then it's probably better to form a limited company so that your personal liability is manageable.
This discussion will remain rather theoretical until we know what line of business you are considering.
daryl