Different laws bind business activities and the operation of the companies in Finland. When founding a new company, among the first things is to find out what laws and regulations concern business activities and are in effect in the industry in which the company is going to operate.
When starting a business in Finland the company must be announced to trade register, registered to tax prepayment register and VAT payment register. In addition, if the company has employees it should be announced to the register of employers. When starting a business the central parts of the legislation are those which concern the company forms, the right to conduct business activities, insurance, employee duties and – depending on the industry – for example environmental laws and laws concerning traffic insurances.
Here are five key dimensions of the Finnish corporate law environment:
1. Finnish Company Act
Depending on the company form different laws and regulations will apply. The most common form is a limited company which is regulated by Limited Liability Companies Act. The act concerns for example the administration of a limited company and the liabilities of the shareholfers.
2. Business Income Tax Act
The share and the amount of the different taxes the company is liable to pay vary acccording to the legal form the company has taken. Corporate income tax rate in Finland is 20 % (since 2014).
3. Value Added Tax Act
Most of the transactions of goods and services are taxed in Finland with a value-added tax of which there are three different tax brackets with varied rates: 10 %, 14 % and 24 %. The rate depending on the type of the product or service.
4. Labor legislation
Labor legislation consists of a wide variety of acts, including Employment Contracts Act, Working Hours Act, Annual Holiday Act and Collective Agreements Acts. There are also regulations which concern employers and employees of different business fields and industries. In addition, the occupational health care for employees must be conducted.
5. Accounting Act and Auditing Act
All businesses are obliged to do up-to-date bookkeeping from the fist day the company has been started. Companies have also notification obligations to different authorities, such as monthly VAT notifications to tax authorities. The company must also name an auditor and the audit of the accounts must be reported on the regular basis.