Finland is well-known globally for their innovative businesses, excellent education system, judiciary system, natural beauty, sauna culture, and technology. Being one of Europe’s leading economies, you cannot ignore Finland if your goal is to set up business in Europe. Though Finland has a very business-oriented economy with various opportunities. Gaining access to Finnish markets without natives can be difficult. You can overcome language barriers by availing of Finnish translation services, but navigating their rules and regulations is another story. But we will discuss that later on.
Setting up a corporation is relatively easy and seamless. Finland’s modern communication system, logistics, and infrastructure make doing business easier and more profitable. The market is free and open, the red tape is also minimal with the right papers. However, without prior knowledge the regulatory and taxation environment is difficult to understand. Moreover, the import-export laws and visa filing for foreign workers can also be complicated. During the registration of business, you may need to avail of services from a professional translation agency for the paperwork.
Let’s get into the Challenges with more detail
Registering your Business
On average it takes around 2 weeks to set up shop in Finland even though you only need to complete three procedures. A shared capital is paid to the bank and a registration fee needs to be submitted. After which you will get a start notification from the National Board of Patents (NBPR) and Tax Administration. You also need to file for your employee’s pensions, medical insurance, and accidental insurance. The process takes 2 weeks because the government is busy verifying your provided details.
Construction Permits
Official departments like the real estate office and the public rescue service need to inspect the property where construction is intended. Your architectural plans are also analyzed, along with a checklist of requirements for your constructed building. A total of 16 procedures need to be completed to obtain a construction permit. This can take around 60-70 days and the process is rather annoying. But once approved you can begin as soon as possible.
Electricity Connection
Finland has appointed regional electric firms that handle all applications. Moreover, they approve your applications, handle all the work, and install your meter. A business must apply through proper channels and complete documentation. Even a single missing signature can cause your application to be rejected.
Getting Credit
Countries like the USA have a banking system designed to support corporations during times of financial struggles. However, Finland has no such system. The public registry coverage is non-existent. There are private coverage companies but they have weak coverage. Moreover, these institutions though few and weak are not involved with the government. Hence, getting credit could get you unfavorable terms or it just makes the entire process all the more difficult.
Regulatory Environment
Finland is well-known for their lack of corruption and transparency. There are so many checks and balances that it can be difficult to navigate the system if you aren’t a local. Since documentation has to be submitted in Finnish sometimes, you may need the best translation agency to help with the paperwork.
Language Barrier
Finnish is the official language of Finland. Though the vast majority of the population in Finland can speak English, those in rural areas cannot. Depending on your business and target audience you may need Finnish translation services. Your website for example should be in both English and Finnish. All other forms of documents can follow if need be.
Paying Tax
Like we said before Finland is renowned for its transparency and low corruption rates. However, achieving this takes time and effort from the government and the people. In Finland, you have to pay eight different corporate taxes each year. Doing this can take 90-100 hours to complete. Insurance forms like pensions can be the most time-consuming. International firms find this time of the year most difficult and stressful. Mistakes can result in fines, penalties, and possible court appearances.
Cross Border Trading
Trading through borders is rather cheap in Finland. But getting the goods in and out is still rather challenging. You have to fill in four different documents when exporting. Moreover, you have to fill out five forms when importing. The process if all goes smoothly takes more than a week. Moreover, there is no way around it and this can be a nuance for many international firms.
Conclusion
Finland does have its challenges when setting up a business. However, the transparent environment, quick judiciary, infrastructure, high-quality living, and people buying power can make it worthwhile. Finland’s strict vetting system does ensure that if you understand the system everything goes smoothly. My advice for anyone thinking about setting up a business in Finland should do their research regarding all the paperwork and laws. There might be better options for you elsewhere. But in the end, it all comes down to the type of business you are in.
