Becoming An Enterpreneur in Finland

Guide
Becoming an Entrepreneur
in Finland 2017
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Guide
Becoming an Entrepreneur in Finland 2017
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Preface
Here you can get a

good start!
So you are thinking about be- Entrepreneurship is a great alternative
coming an entrepreneur. En- for you to exploit your own knowhow.
The freedom of an entrepreneur brings
trepreneurship allows you to along the increased responsibility for
make the decisions that you success. Unlike many other professions,
want. For many people, it’s entrepreneurship means, without excep-
the best way to work and earn tion, a lot of work, flexibility and often
compromising on freetime, holidays and
a living, and for many people,
hobbies. It is hard work and requires a
it’s a way of life that would be strong belief in your own business idea.
difficult to abandon. People However, success as an entrepreneur is
are attracted to entrepreneur- very rewarding.
ship because of the freedom.
It is safe to start with the help of
You get to be your own boss.
D
the Finnish Enterprise Agencies The guide has been drafted in co-opera-
o you have a business idea or Your nearest Enterprise Agency will pro- tion with the network of Finnish Enter-
knowhow you could utilize vide assistance for developing your busi- prise Agencies and its member enterpris-
as an independent entrepre- ness idea. The business advisors and a es. We want to express our sincere thanks
neur? You are not alone; an local network of experts help you to eval- to all members of the network who have
increasing number of people living in uate the functionality of your business participated in the drafting. We also
Finland will, in the future, earn their liv- idea. You will get guidance and a partner wish to thank Tuulikki Holopainen for
ing as entrepreneurs. When people have to discuss. The operations are based on updating the information and Nea Ivars
noticed the power of entrepreneurship, assistance by business experts and vol- for the graphic design and layout. Spe-
they have learned to value it more. untary work. The service is personal, free cial thanks to those member enterpris-
of charge and strictly confidential. Most es and institutions who have supported
This guide for starting entrepreneurs is experts are entrepreneurs themselves. the publication of the guide by adver-
meant for people who contemplate start- tisements and who provide services to a
ing a business. The guide is also useful The Enterprise Agency helps you to cre- starting entrepreneur.
for already functioning entrepreneurs as ate a sound business. You will get a good
it contains the most recent information start as an entrepreneur and avoid many We hope that many people who are con-
and legislative amendments regarding, of the most common teething problems. sidering the establishment of a business
inter alia, taxation, financing and licens- Whether your business is big or small, you of their own find this guide. Hopefully, this
es of a business, employer obligations, need associates, networks and customers. guide will assist people who want to be-
accounting as well as the pension and come entrepreneurs and new entrepre-
unemployment insurance for the self- With the help of the guidance from the neurs in their path to entrepreneurship.
employed. Enterprise Agency, you can build con-
tacts to experts in various fields. The Entrepreneurship is always an oppor-
Could I become an entrepreneur? aim of the Enterprise Agencies is to help tunity.
You need to consider entrepreneurship businesses at their early stages towards
from many angles. Letting the ideas rip- a profitable growth.
en is part of the useful preparation for
entrepreneurship. The start of a business Entrepreneur Guide 2017 Jari Jokilampi
always involves a fundamental change This guide gives an outlook on entrepre- Managing Director
in life. It has an effect on the future, the neurship and provides help to the entre- Finnish Enterprise Agencies
way your own life takes shape, family re- preneur at the early stages. The guide is
lations and friendships, your values, liv- used at the Enterprise Agencies and in
ing standard and your way of life. courses for entrepreneurs.
Visit our website at www.uusyrityskeskus.fi
3
Guide
NEW ENTREPRENEUR 2016
Bold distillery entrepreneurs conquer

the world
Kyrö Distillery from Ostrobothnia has quickly expanded its market area to
different parts of the world and won several awards. What makes the new
company so successful?
PHOTOS BY Kyrö Distillery TEXT BY Minna Honkanen
Market gap the size of a rye distillery The entrepreneurs of Kyrö Distillery convinced the people at
Rye Rye Oy, whose marketing brand is Kyrö Distillery Company, the Finnish Enterprise Agency with their very professional at-
was established in August 2012. The five founders of the com- titude right from the start. Antti Alasaari, the business advi-
pany (Miika Lipiäinen, Miko Heinilä, Kalle Valkonen, Jouni sor who sparred the entrepreneurs, says that the case of Kyrö
Ritola and Mikko Koskinen) got the idea to establish a com- Distillery is exceptional:
pany in a very Finnish way: in a sauna. They noticed that there “In the case of this company, I was surprised at how good
was a gap the size of a rye distillery in the world, and they start- calculations they provided right at the start. They offered dif-
ed to fill the gap from the very heart of Finland in Ostrobothnia. ferent scenarios and cash flow calculations for several years
Kyrö Distillery operates in Isokyrö, making rye whiskey, gin right off the bat. Another great thing to notice was the chemis-
and a long drink based on the gin, Long Kyrö. Furthermore, the try between these friends, as well as their extremely varied ex-
company has established a subsidiary, Kyrönmaan Matkailun perience and competence, regardless of their age!
Edistämiskeskus (Kyröön Kievari Oy), to run a restaurant. The
company employs 11 full-time and five part-time employees. Determined to succeed globally
Right from the start, the company’s goals have been growth
Sparring at the Finnish Enterprise Agencies and entry into the international markets. These goals have
Services of the Vaasa Region Finnish Enterprise Agency was used been reached, because the entrepreneurs have utilised the
when the company was being established. The entrepreneurs con- available services (Visit Finland, FinPro) and understood the
tacted the Finnish Enterprise Agency to receive assistance in the significance of networks.
preparation of their business plan and advice on investments, fund- The entrepreneurs have built their networks both in Fin-
ing and cooperation with other companies active on the market. land and abroad with care. Kyrö Distillery’s products are sold
4
in many European and Asian countries, as well as in Australia.
The goal for 2017 is to launch a product on the United States New Entrepreneur of the Year
market. competition
The company has been very successful in the marketing
of its products and the building of its brand. Each product The New Entrepreneur of the Year in Finland is se-
is based on a story and each detail seems carefully consid- lected from among entrepreneurs whose compa-
ered. The products themselves have also played a key role in nies have been in business for two to five years
the success: they have done well in many competitions of the and were established with the help of the Finnish
industry. Enterprise Agencies.
One of the company’s major achievements is that their Napue
gin was selected as the best gin in the world in the Gin & Ton- Each local Enterprise Agency selects from their ar-
ic series of the Wine and Spirits Competition (IWSC) in 2015. ea the New Entrepreneur of the Year and submits
IWSC is the industry’s oldest competition (est. 1969), and it is their name to the nationwide competition.
considered one of the industry’s most important competitions.
An entrepreneur whose business has been
Recipe for a successful company launched in a controlled and systematic manner
The Finnish Enterprise Agencies named Kyrö Distillery the and whose company is deemed to have a good
New Entrepreneur of the year 2016. The jury was convinced opportunity to become profitable will be named
by, for example, the company’s credible and attractive story as the New Entrepreneur of the Year.
and successful branding.
“The entrepreneurs have done business very boldly and pro- The New Entrepreneur of the Year in Finland is se-
fessionally developed the idea and increased the size of the lected by the Finnish Enterprise Agencies, the Na-
company. Entrepreneurship always requires some courage. tional Board of Patents and Registration of Fin-
Even if you do business in a very traditional industry, you can land, Nordea Bank and Varma.
always stand out from among the competition by doing things
a little differently,” says Jari Jokilampi, the Managing Director In addition to the award for the New Entrepreneur
of the Finnish Enterprise Agencies. of the Year, honourable mentions for other suc-
Over the course of their four years in business, the entrepre- cessful entrepreneurs are given each year. The ju-
neurs of Kyrö Distillery have gotten an idea of what a success- ry offers grants to the winner and the persons
ful company needs: who were given honourable mentions.
“You have to find something in which you fervently believe.
Then you must listen to all the potential customers and ask The New Entrepreneur of the Year in Finland is
all the questions you can think of. Finally, you must find a bal- published and awarded at the Summer Day of the
ance between your passion and the market needs,” says Miika Finnish Enterprise Agencies in early June.
Lipiäinen, the Managing Director of Kyrö Distillery.
5
Guide
CONTENTS
Should I become Before establishing Establishing
an entrepreneur? a company a company
• What is entrepreneurship? ......8 • Business plan ...........................16 • Stages of establishing
a company ...........................42
• So could you become an • SWOT analys ............................22
entrepreneur? .........................9 • Forms of enterprise ..............43
• Risk management ...................22
• Where to get the business • Registering a company .........48
• Start-up grants and adjusted
idea? .......................................10
unemployment benefit ............23 • Agreements for a new
• The various forms of company ..............................51
• Funding for a new business
entrepreneurship ....................12
start-up ....................................26 • Knowledge adds security –
• Turning an enterprise idea protection brings a
• Marketing, sales and
into a business idea .................14 competitive advantage ........53
advertising ...............................29
• Pricing ......................................33
• Licensed industries .................34
• Permits and registrations of
foreigners ................................39
Starting the Running

business Operations a company FOLLOW US
• Starting te business • Invoicing and debt collection ... 68 uusyrityskeskus

operations ............................... 56
• Bookkeeping and financial
• Insurance ................................ 57 statements for the company .... 70 uusyrityskeskus
• Entrepreneur’s unemployment • Income taxation ....................... 73
benefit .................................... 58 uusyrityskeskus
• Value added tax (VAT) .............. 76
• To-do list for a new
entrepreneur ........................... 62 • Becoming an employer ............ 78
suomen
• Environmental responsibility uusyrityskeskukset
• Ten instructions to success ..... 64
of the business......................... 82
• Important links ........................ 66
• Business culture in Finland ....... 83 www.uusyrityskeskus.fi
• Business dictionary .................. 84
• Enterprise Agencies in
Finland at your service ............. 88
• Notes ....................................... 89
Guide – Becoming an Entrepreneur in Finland 2017
PUBLISHER Suomen Uusyrityskeskukset ry/SUK-Palvelu Oy PRINTING Forssa Print

EDITOR Network of Enterprise Agencies LAYOUT Nea Ivars l Graphic design Gomedia Oy
UPDATE OF INFORMATION Tuulikki Holopainen l Asiatieto Oy PHOTOGRAPHS Johanna Kinnari and Joonas Leppäviita
EDITOR IN CHIEF Jari Jokilampi l Suomen Uusyrityskeskukset ry ILLUSTRATIONS Ilja Karsikas l Napa Arts and Licensing Agency Oy
Tel. 0500 731 445 l jari.jokilampi@uusyrityskeskus.fi ADVERTISEMENT SALES Minna Honkanen
EDITORIAL ASSISTANT Minna Honkanen Tel. 050 577 1392 l minna.honkanen@uusyrityskeskus.fi
Suomen Uusyrityskeskukset ry
Tel. 050 577 1392 l minna.honkanen@uusyrityskeskus.fi © The Finnish Enterprise Agencies 2017 All rights reserved.
6
Should I become
an entrepreneur?
Before becoming an
entrepreneur, you
should consider the
different options and
think about whether
you are suited for
the job. The Finnish
Enterprise Agencies
can offer you expert
assistance and
someone to talk to
“When establishing a
when thinking about company, choose an
industry that you love!”
your readiness to
Marika Silvan-Väliharju
establish a company
and become an
entrepreneur.
Leikkien Group Oy
• Marika Silvan Väliharju
established her company
that specialises in
educational toys, games
and books in 2006 via the
Tampere Region Finnish
Enterprise Agency. The
idea was born when
Marika tried to find
educational toys for her
own child and noticed
that the stores did not
carry such toys.
Read Marika’s
entrepreneurship story
on our website at
www.uusyrityskeskus.fi.
Should I become an entrepreneur? 7

Guide
What is entrepreneurship?
M
ore and more entrepreneurs are number of customers and they must be
needed, because entrepreneur- willing to pay for them.
ship is the lifeline and moving
force of society. A huge change has tak- First, consider these central
en place in the general attitude towards questions:
entrepreneurship in the past ten years. • What is my life situation?
Now, one in every five Finnish young peo- • Do I have what it takes to be
ple are considering entrepreneurship as an entrepreneur?
one option, compared to one or two per • Is my business idea good Defined in three
cent at the beginning of the 2000s. The enough?
enthusiasm among young people can al- • Where do I find my customers? words only,
ready be seen in the business world. 17
% of all companies established through The aim of a business is that it succeeds
entrepreneurship
the Finnish Enterprise Agencies last year and makes a profit. Entrepreneurship, or is work, work and
were established by people who were less enterprise, is about identifying the risks
than 25 years of age. relating to a business activity and about work.
preparing for them, i.e. the skill to make
Entrepreneurship is a good career alter- a business operation profitable.
native – but not for everyone. Defined Entrepreneurship means making good
in three words only, entrepreneurship is Entrepreneurship is also about believ- use of one’s own professional skills, ex-
work, work and work but the only rea- ing in one’s own business idea. Entrepre- perience and social skills. A good entre-
son for starting a business cannot be un- neurship can be a way of life or a means preneurial idea and a functional busi-
employment. It is not likely that you can to provide a livelihood and to employ ness idea based thereon combined with
find enough people who would become oneself. Financial motives, i.e., the wish an entrepreneur with knowhow usually
your customers only to employ you. Your to earn money, are necessary if an entre- lead to success.
business and the products and services preneur wants to support himself/herself
it offers must be useful for an adequate and possibly also employ other people. WHO IS AN ENTREPRENEUR?
The definition of entrepreneur depends
on whom you ask. People working with
business law and people working with
pensions and unemployment issues have
a different definition for an entrepreneur.
According to one of the definitions, an
entrepreneur is a person who, alone or
together with others, practices business
in a company that aims to make profit.
These activities include a degree of risk-
taking.
In the case of unemployment benefits, an

entrepreneur is a person who works in a
company of which themselves or them-
selves together with their family own
a share that is determined by law. Fur-
thermore, a person who works, but is not
in an employment or service relation-
ship with the employer company (such
as a freelancer or a person who works
through an invoicing community) con-
sidered an entrepreneur. Just owning a
company or a part thereof does not make
anyone an entrepreneur.
8 Should I become an entrepreneur?

So could you become an entrepreneur?
P
resently, being an entrepreneur is Personal qualities and skills lay the Good qualities for an
one of the most popular ways of foundation for a successful business. entrepreneur to have include
working. Paid employment is no Think about your own strengths. Differ- • hard-working
longer as safe a choice as it used to be, ent fields require different qualities and • creative
and the difference between paid employ- skills. What do you still have to develop? • bold, works on one’s own
ment and the risks inherent to entrepre- initiative
neurship has diminished. Entrepreneur- A person planning to set up a business • strives for good results
ship offers an alternative for traditional must be familiar with the field where (s) • determined
employment: you can practice your pro- he intends to establish the business. In • knows how to sell his/her product
fession independently without the su- addition, (s)he must also know the bas- • prepared to take risks
pervision or authority of any superiors. es for financial management, pricing, • can cope with uncertainty.
budgeting and marketing. It is possible
Do I have what it takes to be an entrepre- to gain or improve such skills and knowl- Things that motivate people to
neur? This question occupies the minds edge with the help of training or experts. become entrepreneurs
of many unemployed persons and those • you can become your own boss
about to complete their studies. Also It is worth remembering that becoming • you can determine your own
many people employed by others think an entrepreneur does necessarily mean work tasks
about starting their own businesses. The that you have to work as an entrepre- • you can determine your working
key to the success of an enterprise is of- neur forever. You can think of this as one hours
ten the entrepreneur himself/herself and phase of your life and as a part of your • there is the opportunity to
his/her person. whole career. make a financial success
• you can fulfil your dreams
A starting entrepreneur usually has kno- • you can employ others.
whow or professional skills to which (s)
he can successfully link the business Challenges in starting up as an
idea. Besides preparedness, running
an enterprise requires entrepreneurial
A person who entrepreneur
• arranging finance
skills. These include business manage- plans to start a • lack of expertise and experience
ment, financial administration, market- • lack of knowledge of legislation,
ing and the actual service or production. business must be taxation and setting up contracts
It is not necessary to be able to do every-
thing by yourself as you can buy services
familiar with their • insufficient skills in the Finnish
language
from another entrepreneur. Many do so chosen industry. • lack of familiarity with Finnish
and buy, for example, accounting servic- business culture
es from an accounting firm or marketing • time management (work/study,
help from an advertising agency. family/spouse, free-time, etc.).

Guide
Where to get the business idea?
B
efore becoming an entrepreneur, OPERATING IDEA model, i.e., a franchising enterprise, is a
you should consider your own The operating idea reveals the purpose functional way to start as an entrepre-
skills as well as the possibilities of the enterprise. What is the task or why neur. These alternatives do not exclude
to exploit them as an independent en- does the enterprise exist? The operating each other. It is possible to succeed as
trepreneur. Your expertise may be based idea provides a basic formulation and an entrepreneur, with your own business
on your work experience or professional summary of the intent of the enterprise idea or with an acquired one.
skills, training, personal relations or hob- to both the entrepreneur and the public.
bies, for example. Most successful com- A clear operating idea helps the start- Start with your own business
panies are based on a solid foundation ing entrepreneur to define briefly his/ idea
of expertise and competence. You should her own business plan and to explain it The own business idea may be based on
not establish a company if you do not to outsiders - for example, to financiers. experience or on an idea or invention
have enough expertise or competence. of the person contemplating entrepre-
ESTABLISHING A NEW neurship. Business ideas generating from
When contemplating the operating idea ENTERPRISE work or professional experience are most
and the business idea, the most impor- There are many sources of business ide- typical in the service branch. For exam-
tant is to ensure that the personal abil- as. First we discussed an idea based on ple, a hairdresser starts a barber-hair-
ities are compatible with them. A small one’s own knowhow and professional dresser enterprise and a driver becomes
enterprise should specialize in opera- skills. It is often the most common and an entrepreneur in the transport sector.
tions for which the entrepreneur has the safest way to start entrepreneurship. An- It is also possible to find new business
best knowledge, skills and financial pre- other alternative is to buy the idea, either ideas through hobbies or versatile con-
conditions. a working enterprise, its business opera- tacts.
tions or parts thereof. The acquisition of
a ready business idea and an operating When developing a business idea, it is
important to find ways to distinguish
from the other entrepreneurs in the
same field. Specialization may apply, in-
ter alia, to a product, a service, a line of
action or the selection of target customer
groups. A new need may arise in the mar-
kets as a result of demand, competition
situation or a change therein.
Better safe than sorry. Finding new market needs and satisfying
Manage Your risks! them requires active following of the cor-

porate environment and the recognition
of needs as early as possible. The entre-
preneur who first recognizes a new mar-
ket gap may base his/her business idea
on filling this gap. At its best, the busi-
ness idea based thereon may provide so-
lutions to problems in the market.
Completely new business idea or

invention
A company may be established to com-
mercialise a completely new business
idea, product, service or invention. This
is the most challenging way to start a
Unemployment security for entrepreneurs business, and it involves the most risks.
Service number 09 2535 3100 Obtaining funding may be very difficult
YRITTÄJIEN
www.ayt.fi at first.

Existing business idea There are many enterprises in Finland acquisition consultants) will advise you
The most typical way to start a business whose present owners are willing to sell on whether the business’s operations are
is to use an existing business idea but im- them. Some of them are actively for sale profitable and whether its accounting is
plement it in a new and more compet- but most of them continue their oper- reliable. Before you sign the contracts
itive way or in a new market area. You ations silently looking for a buyer. Af- and other documents, you should also
may realise your plans by establishing ter you have drafted your own business seek advice from a legal expert.
a new enterprise or by acquiring an al- plan, be active in looking for an interest-
ready working enterprise. ing target enterprise and go ahead and Generally, buying the business opera-
contact its owner irrespective of wheth- tions alone is a safer option than buying
MAKING USE OF THE BUSI- er the enterprise is openly for sale or not. the whole enterprise, because then the
NESS OPERATIONS OF A You can find details of companies for sale old liabilities and debts of the enterprise
WORKING ENTERPRISE by using the search service of the Federa- are not transferred to the new owner.
For a starting entrepreneur, the acqui- tion of Finnish Enterprises at www.yri-
sition of an enterprise does not, in fact, tysporssi.fi, for example. Investment in
mean continuing the business opera- such an enterprise may be the first step
tions of the enterprise. It is just one way of your entrepreneurship.
for a new entrepreneur to best imple-
ment his/her plans in the business op- If you intend to start your entrepreneur-
erations or just “business” (s)he wishes ship by buying an existing enterprise or
to carry out. Although “business” is not business, or a part of it, make sure you
a very Finnish word, it best describes the use experts to help you assess the finan-
nature of a corporate acquisition from cial situation of the enterprise and the
the point of view of the buyer. The term risks relating to its business. The advisor
“working business” contains all the ele- network of the Finnish Enterprise Agen-
ments required in entrepreneurship i.e. cies includes acquisition experts to assist
products/services, customers, market you. Financialmanagement profession-
position and, first and foremost, turno- als (accountants, auditors and corporate
ver.
However, the acquisition of a working Answers by

enterprise naturally includes risks but it a business advisor
offers a new entrepreneur a simple way
to start and a possibility to commence
business operations immediately as the
customers and turnover already exist. If
you buy a company, you should keep in
mind that you cannot buy the market.
Even the new entrepreneur will have to
earn their customers.
The options are:

1. to buy the whole of a working
enterprise
YRITYSNEUVOJA VASTAA
2. to buy part of an enterprise
(one function) What are the characteristics
3. to just buy the enterprise’s
of a good entrepreneur?
business operations A good entrepreneur is an expert
4. to buy part of the business in their field
and a person who is able to do pro
operations. fitable work.
An entrepreneur must be able to
cope with
uncertainty, carry responsibility
and create
networks.
Anu Lehtola, Tampereen Seudun

Uusyrityskeskus Ensimetri

Guide
The various forms of entrepreneurship
T
here are many options to be an the good, established practices for fran- the technology field whose business con-
entrepreneur or work in an en- chising. If you are planning to become a cept contains something new and dif-
trepreneur-like manner. You can franchise entrepreneur, you should keep ferent. The operations are financed with
start your entrepreneurship as a self-em- in mind the fact that all members of the risk financing as the company does not
ployed person, a member of a co-opera- Finnish Franchising Association com- yet make profit. The aim is to achieve fast
tive, a partner entrepreneur, a part-time mit to the franchising Code of Ethics. You growth and internationalising. Some
entrepreneur or a temporary entrepre- should study the code before becoming a quickly growing and internationalising
neur. You need not choose to become franchising entrepreneur. startups have been established in Finland.
an entrepreneur for the rest of your life.
Part-time entrepreneurship in connec- “LIGHT ENTREPRENEURSHIP” PARTNERSHIP
tion with studies or hired labour has be- So called “light entrepreneurship” (in Finn- Operating as a partner can be a very en-
come clearly more common. Becoming ish “kevytyrittäjyys”) is a form of employ- trepreneurial activity depending on how
an entrepreneur together with others has ment where a person acquires his/her the responsibilities and authority are
also become more common, especially own work and defines a price thereon. In- split amongst the partners. For example,
among young people. voicing and salary calculation have been in family businesses, the spouse and chil-
outsourced to an external billing service, dren may be partners. In small business-
ENTREPRENEURSHIP AS A which charges its own service fee from the es, it may be possible to get key people to
FRANCHISEE total amount. The billing service takes care commit themselves to the enterprise and
Working as a franchisee allows you to of the “light entrepreneur’s “ tax withhold- its development by transferring stakes in
start up a business without having your ing, insurances (accident insurance, liabili- the business to them.
own business idea. Franchising is a long- ty insurance) and other statutory employer
term collaborative agreement between contributions (health insurance contribu- TEAM ENTREPRENEURSHIP
two independent enterprises. The fran- tion, pension insurance premium and un- Here, several people who wish to become
chisor grants to the franchisee (of whom employment insurance contribution as entrepreneurs establish a business to-
there may be many) the right to use, in well as group life assurance premium). gether. All these people are responsible for
return for payment and in accordance the success of the enterprise. For example,
with the terms of reference, the business PART-TIME when two businesses merge, the partners
idea that the franchisor has developed ENTREPRENEURSHIP of these enterprises may become part-
and devised, and which it controls. Starting up a business part-time, for ex- ners in the new enterprise. Young peo-
ample in addition to a main job or stud- ple, in particular, like starting businesses
A franchisor duplicates a concept, i.e., of- ies, is recommended if the person is not together with others. Experts from many
fers it widely for the use of several enter- sure whether the business will be profita- different fields may be involved in a com-
prises. This results in a network of under- ble – at least to begin with. Working on a pany established by young people.
takings operating in co-operation and part-time basis, you can test first wheth-
using the same concept, i.e., a so-called er there are enough customers and assess WORK INTEGRATION SOCIAL
franchising chain. Franchising chains how the business will develop and wheth- ENTERPRISE (WISE)
operate in very different sectors, for ex- er there is potential to become a full-time When planning to start a business, one
ample, in trading and restaurant indus- entrepreneur. Your own financial risk will possibility is to start a social enterprise. In
tries as well as in various enterprise and be lower because your income is not to- addition to profitable business operations,
consumer services. Franchisors are con- tally dependent on the success of the the purpose of a social enterprise is to pro-
stantly looking for new entrepreneurs. business. The Employment and Econom- vide work opportunities for disabled per-
Even at this moment, there are hun- ic Development Office (TE Office) may sons and the long-term unemployed as
dreds of openings for entrepreneurs in not grant business start-up funds to part- well as to support their future employ-
Finland. Further information is available time entrepreneurship. A start-up grant ment. Otherwise, a social enterprise func-
from website www.ketju.fi and from the can be granted to anybody who wishes to tions just as any other enterprise.
Finnish Franchising Association’s web- expand their part-time entrepreneurship
site, www.franchising.fi. into a full-time occupation. The Finnish Ministry of Employment and
the Economy (TEM) maintains a register
Finland uses a self-regulating model of STARTUP of work integration of social enterprices.
franchising operations that is based on ENTREPRENEURSHIP The application form (TEM309) is availa-
a Code of Ethics published by the Finnish Startup companies are usually newly cre- ble in the E-services of Enterprisefinland.
Franchising Association. They determine ated companies in their early stages in fi (“Forms and e-services”).

A work integration social enterprise may SOCIAL ENTREPRENEURSHIP The social enterprise uses most of its
be a private trader, a general partnership, What separates a social enterprise from economic profit in furthering the social
a limited partnership, a limited liability other enterprises is its primary goal: goal.
company or a co-operative. A business to turnover and profit are made primarily
be registered as a work integration social in order to achieve a social goal. Transparency is one of the operational
enterprise must fulfill the following re- principles. Ethical rules are an integral
quirements: These goals may, for example, be pro- part of the responsible leadership of a
motion of well-being, employment of social enterprise. The goal of a social en-
• At least 30 % (percentage the long-term unemployed or of per- terprise is that the enterprise is success-
of placed employees) of the sons whose disability or illness ham- ful. A social enterprise may choose any
employees in an employment pers employment, prevention of social legal form of incorporation. More infor-
relationship (excluding the exclusion of the young or the elderly, re- mation on the social entrepreneurship
entrepreneur) must be persons habilitation of special groups, recycling www.suomalainentyo.fi/en/.
whose or another social/environmental goal.
- disability or illness hampers
employment A social enterprise combines in an in-
- who have been unemployed teresting and even challenging way the
jobseekers for a continuous operational models of traditional profit-
period of 12 months (or are seeking enterprises and efficacy-seeking
comparable thereto) organisations.
- who have received
unemployment security on the
basis of unemployment for a
period of at least 500 days.
The percentage of placed
employees shall always include
persons whose disability or
Answers by
illness hampers employment. a business advisor
• All employees, irrespective of
their productivity, are paid the
pay agreed in the collective
agreement of the said line of
work payable to a person with
full work capacity
• The working hours of the
persons, whose disability or
illness hampers employment,
is at least 50 percent of the
maximum working hours of YRITYSNEUVOJA VASTAA
the industry, and of others to
be included in the percentage
of placed employees, at least What are the charac
75 percent of the maximum teristics
of a good business id
working hours of the industry A good busines ea?
s idea includes an idea
• Public subsidies are less than what products and se of
half of net sales. rvices will be offered,
to whom and how. Th
e idea is always in
some way based on the
entrepreneur’s own
A work integration social enterprise expertise.
may be granted increased pay subsidy
for employing a person whose disabil- Sari Söderlund, Vantaa
n Uusyrityskeskus
ity or illness hampers employment or a (YritysVantaa)
long-term unemployed person.

Guide
Turning an enterprise idea into

a business idea
Try to find an innovative business idea!
The more unique the product, the less
competition you will face. On the other
hand, in such cases it is difficult to esti-
mate the profitability of the business or
compare the business idea to other oper-
ators. In such circumstances, the size of
the market and the structure of demand
must be estimated, and profitability cal-
culated on the basis of the estimates.
Consider the following:
• CUSTOMER BENEFIT: What

the customer gets, where the
customer uses the product
A
n enterprise idea indicates what necessarily tell the whole truth about or service, why the customer
the new enterprise intends to customers’ buying habits. Market re- purchases it?
produce. The enterprise idea search can also be bought from external • IMAGE: Why the customer
is defined in more detail and gradually experts, but then you will have to pay for buys from this enterprise, what
shaped into a business idea. The busi- the survey. kinds of mental pictures are
ness idea indicates what the enterprise associated with the enterprise
will do and to whom it will sell, how the THE BUSINESS IDEA MUST BE or its products?
enterprise will implement these things, VIABLE • PRODUCTS: What is produced
and in what markets it will operate. The Implementation of the business idea or supplied, how does it differ
business idea answers the questions requires know-how on the part of the from the competitor’s products,
What? To Whom? How? entrepreneur(s) as well as capital that what is the price, what kind of
is needed for working capital and ini- packaging is used and how is
Think about whether your products tial investments. Know-how and famil- the product delivered, is advice
will be able to succeed in the market- iarity with the field can be acquired via required via the internet, for
place? Which markets will you operate training, work experience and recrea- example?
in? What is different about your busi- tional pursuits. Be realistic in terms of • CUSTOMRS/CUSTOMER
ness idea? Make sure you consider your demand for goods or services. You will GROUPS: Who are the
business idea from the point of view of improve your chances of success with customers, where are they and
the customer in particular. The product careful planning. how many are there, how are
(goods or a service or a combination of they reached, how much are
these) must be something that the cus- Industry and competitive they prepared to pay, how will
tomer is prepared to pay for. Determin- situation they pay?
ing customers’ needs is important so Industry refers to that field in which the • MODE OF OPERATION:
that it is clear what qualities they value. enterprise operates, for example cater- Will products be created in-
Is your product or service, for example, ing (restaurants and cafes), financial house or will their production
more effective, cheaper, of higher quali- services (banks), building or cleaning. In be subcontracted, how will
ty, more pleasant or simpler than that of some fields, there are a lot of operators, products be marketed, how will
your competitors? i.e. there is a lot of competition. In such they be sold?
cases, the opportunities to make a prof- • RESOURCES: How can you get:
You will get the best insight when you it are small, because the entrepreneurs business premises, machines
test it in practice, for example with a must sell their product cheaply. The low- and equipment, capital
small market survey. The most genuine er the novelty value and the more estab- invested, know-how, as well as
feedback about your product will come lished the field, the greater the competi- experience of the entrepreneur
from your potential customers. Never- tion faced. That is greater the number of and the employees?
theless, an opinion poll does not always competitors offering a similar product.

Before establishing
a company
To establish a company,
you will have to prepare
a business plan, acquire
funding and plan your
marketing, sales and pricing,
for example.
Everybody has ideas,

so the most important
thing is being persistent
and believing in what
you do!”
Joni AlWindi
Edvisto
(DiSEL21 Oy)
• Joni AlWindi became a
startup entrepreneur
in 2015. Since the end
of the first year of
operations, he has used
the advice services of
the Helsinki Finnish
Enterprise Agency. The
company’s product
EdVisto (Educational
Video Storytelling) is
a video storytelling
platform and method
for learning at school.
Read Joni’s
on our website at
www.uusyrityskeskus.fi!
Before establishing a company 15

Guide
Business plan
WHAT IS A BUSINESS PLAN? possible investors, business partners, Employment and Economic Develop-
lessors or suppliers, for example. With ment Offices, when business subsidies
Business plan refers to a written plan the help of the business plan, the entre- are applied for from the centres for Eco-
for the business. It describes how the preneur can prove that the enterprise nomic Development, Transport and the
business idea will be implemented in will succeed when, for example, finan- Environment (ELY) or loan finance.
practice: the operating environment of cial-statement data is still not availa-
the enterprise, and its working practic- ble. A well prepared business plan gives Create a business plan using the handy
es and objectives. It is a comprehensive an idea of the profitability of a business online service at www.enterprisefin-
and detailed presentation with a spec- and its future prospects, and it helps in land.fi, www.business-plan.fi, www.
ified timescale. The business plan al- sourcing finance. onnistuyrittajana.fi.
so includes longer-term objectives and
quantitative targets in the form of profit A business plan is also needed when
budgets and cash-flow statements. start-up funds are applied for from the
The plan goes through the features of

the product, the customer groups, the
External investors Start-up funds from
competitive environment in the mar- an Employment
ketplace, and training and expertise of • business angels
and Economic
the entrepreneur(s) as well as how the • capital investors Development
enterprise intends to market its prod- Office
ucts. The business plan also estimates,
with the aid of calculations, profitabili- The business plan
ty and the sum of money that is needed gives an idea of
for starting up the business’s operations the profitability
(investment requirement). of the business’s
operations
A good plan also highlights the risk factors Loan finance Business subsidies
that may affect the success of the business. • bank loan • ELY centre
• Finnvera loan • Tekes (Finnish
In addition, the business plan is a tool • other loan Funding Agency
that enables entrepreneurs to plan, and for Innovation)
it can also be used in negotiations with
16 Before establishing a company

ELEMENTS OF THE BUSINESS PLAN
Model plan: It is worth

revising and
1. Description of the business idea: petitors, and compare your own updating the
The business idea says what the business idea against them. business plan on
business will do, to whom it will a regular basis.
sell its products, and how the 6. Scope and development of the
business will implement these market:
things. What is the novelty value Give details of the number of cus-
of your business idea (i.e. what is tomers in your product’s market, vince them of the benefits of your
new about it) and why would cus- the competitive environment and own product. Also, pay attention
tomers be interested in your prod- the prospects for growth. Explain to how your customers will find
uct? A SWOT analysis should al- which markets you are targeting: you, for example via the internet.
so be included in this section, see a certain area, the domestic mar- How will you direct your advertis-
page 22. ket, Europe or the global market. ing at specific customer groups?
Could your business possibly be Consider what the look and name
2. Description of expertise: extended to new markets later on? of your enterprise, amongst oth-
Expertise among the entrepreneur How would this happen? Explain er things, say to the customer and
and the employees must support what obstacles there may be for what your enterprise’s brand com-
the business’s operations. List entry to the marketplace: regula- prises. How do they stand out
their educational backgrounds, tions, constraints, customs duties from the competitors? How do
their work experience and their and other risk factors. you arrange your sales work?
strengths and weaknesses.
7. Marketing and advertising: 8. Risks:
3. Description of the product: Write down what marketing meas- A business’s activities are subject
Describe the product critical- ures you would use to reach your to all kinds of risks. Analyse the
ly from the customer’s point of customers and inform and con- business’s risk factors in the short-
view. Explain the product’s fea-
tures compared to the compet- Answers by
itors’: pricing, advantages, uses
and weaknesses.
a business advisor
4. Customers and customer require-
ments:
Describe who your customers are,
how many there are, where they
are, on what basis they decide to
make a purchase, what customers
value in your product. What is the
customer problem or requirement
for which you have a solution? YRITYSNEUVOJA VASTAA
5. Industry and competition:
Describe your industry and the
What are the charac
competitive environment. Will you teristics
bring innovation (something new) of a good business pl
to the industry? Or will you of- A good business plan an?
tells the reader what
company will sell, how the
fer the same as your competitors? and to whom. It includ
es
calculations that show
Try to stand out from the compe- how the company wil
made profitable. l be
tition. Are you able to set up, for
example, an organic hairdress- Tommi Virkama, Vaas
anseudun
er’s instead of a conventional hair- Uusyrityskeskus Starti
a (VASEK)
dresser’s? Analyse the strengths
and weaknesses of your key com-

Guide
and the long-term. How will you get a key person to you need, for example, a patent for a technical inven-
commit to your business and what will happen if (s) tion (which lasts 20 years), utility-model protection
he decides to leave? Can your business idea’s features (i.e. a four-year ”small patent”), trademark protection
be copied? And how sensitive is your business idea to (an identifying mark for a good or service that is regis-
fluctuations in the economy? Risks can not be com- tered for a specific area, such as the Apple trademark)
pletely eliminated, but with effective planning they or a design right that protects the appearance of an
can be reduced. item? Only copyright protection does not need to be
applied for separately. Non-disclosure agreements are
9. Intellectual property rights: one way to prevent a customer or collaborative part-
Plan for the safeguarding of your key ideas in accord- ner from telling others about your unprotected busi-
ance with legislation on intellectual property rights. ness idea.
This will help you reduce the risk from copying. Do
10. Estimates: Funding, Profitability and Sales
A. INVESTMENT CALCULATION:
This is used to show the sources of funding and the expenditure requirements for the busi-
ness in its initial stages. Expenditure requirements include those investments that must be
made in order to launch the business’s operations. Among other things, initial stock pur-
chases, machines required for production, registration fees and security deposits as well as
working capital for a 3-month period (for instance) would be included in expenditure require-
ments. In the working capital provision, an estimate is made of those fixed costs (wages
and salaries, rental, insurance, bookkeeping, etc.) that must be paid even when the business
does still not generate sufficient sales to cover costs. For this reason, working capital is add-
ed to investment requirements for the initial stages. In addition, in the funding calculation,
the sources of funding are shown for an amount equal to the investment sum; the sources
of funding must cover the expenditure requirements. The sources of funding may comprise
shareholders’ equity and property given as a capital contribution, loans, business subsidies
and external equity investments. Remember that business start-up funding should not be re-
garded as one of these sources of funding as it is intended for the entrepreneur’s own sub-
sistence!
EXAMPLE OF AN INVESTMENT CALCULATION

(an enterprise in the cleaning service industry, private trader)
EXPENDITURE REQUIREMENTS EUR SOURCES OF
EUR
FUNDING
Cost of establishing the business 110
Equity
Means of production 2 000
Share capital
Equipment installations 500
Personal cash
Computers and software 1 500 4 400
investments
Car
Property given as a
Phone/tax/internet 200 500
capital contribution
Office supplies 300 Loans from
Property given as a capital contribution (existing machines, work shareholders
500
tools and supplies) Loan capital
Marketing investment 800 Bank loans 6 000
Initial stock purchases 1 000 Finnvera loans
Working capital 3 200 Other loans
Cash reserve (for example premiums, bookkeeping costs, travel TOTAL SOURCES OF
expenses, etc. before the customers have started to pay their 790 10 900
FUNDING
invoices)
TOTAL EXP. REQUIREMENT 10 900

B. PROFITABILITY CALCULATION:
The profitability calculation is used to estimate where the break-even posi-
tion (critical point) arises for a given price level and profit margin, as sales vol-
ume is varied. This can be used to analyse whether a sales target is realistic.
The sales target (net sales) can also be calculated as a monthly, weekly or hour-
ly sales target. Alternatively, it is possible to analyse whether it would be worth-
while changing the margin and sales price, if the sales volume seems unrealis-
tic. Thus, a simple sensitivity analysis can be created, showing how big an effect
there is on the profit forecast if the price is changed.
EXAMPLE OF A PROFITABILITY CALCULATION (private trader)

Monthly Annual (12 months)
EUR EUR
= Target profit (net)
1 500 18 000
(Own salary goal of a private entrepreneur as private withdrawals)
+ Loan repayments 100 1 200
INCOME AFTER TAXES 1 600 19 200
+ Taxes around 22 % see site 73 451 5 415
= Funding requirement 2 051 24 615
+ Loan interest (+ any salary guarantee fees, etc.) 27 324
A. OPERATING MARGIN (required) 2 078 24 939
+ Fixed costs (net of VAT)
the YEL premium of an entrepreneur is 18.798 %* (the annual income of EUR
197 2 362
12,564)**
Insurance (the Self-employed Persons’ Voluntary Accident Insurance and
100 1 200
other insurance for entrepreneurial activies)
Wages and salaries
Indirect remuneration costs
Costs relating to premises
Repairs and maintenance 30 360
Leasing payments
Communication costs (phone, internet, etc.) 80 960
Office expenses 20 240
Travel and car expenses, daily expense allowance 500 6 000
Marketing expenses 200 2 400
Bookkeeping, auditing, tax returns, etc 100 1 200
Unemployment fund, trade association, etc. 30 360
Other costs (the Trade Register’s handling fee, work clothes ja tools etc.) 100 e 1 200 e
B. TOTAL FIXED COSTS 1 357 16 282
SALES MARGIN REQUIRED (A+B) 3 435 41 221
+ Purchases + materials and supplies (net of VAT) 425 5 100
NET SALES REQUIRED 3 860 46 321
+ VAT 24 % 926 11 117
TOTAL SALES/INVOICED SALES REQUIRED 4 786 57 438
* The YEL insurance premium is 24.10 % of the YEL earned income for
entrepreneurs between the ages of 18 and 52 or over the age of 62 and 25.60 %
of the YEL earned income for entrepreneurs between the ages of 53 and 62 A new
entrepreneur will receive a discount of 22 % of the YEL insurance premium for the
first 48 months. Thus, the insurance premium for new entrepreneurs between the
ages of 18 and 52 and over the age of 62 is 18.798 %, and for new entrepreneurs
between the ages of 53 and 62 it is 19.968 % of the YEL earned income (in 2017).
** Entrepreneur’s unemployment benefit, minimum annual income.

Guide
C. SALES CALCULATION
In the sales calculation, the minimum invoiced sales tar- makes it easier to assess the importance of the custom-
get indicated by the profitability calculation can be ap- er relationships; any discounts and variable costs for
portioned among the various customer groups. This products being sold shall be taken into account.
EXAMPLE OF A SALES CALCULATION (MONTHLY)

Cleaning
Cleaning (evenings Window Floor Spring Other
Product TOTAL
(daily) and cleaning waxing cleaning work
weekends)
VAT 0 %
Sales price 24 e 30 e 35 e 40 e 120 e 28 e
Costs 3e 3e 4e 10 e 9e 0e
Margin 21 e 27 e 31 h 30 e 111 e 28 e
Sales quantity 70 h 25 h 8h 8h 8h 8h 127 h
Total sales 1 680 e 750 e 280 e 320 e 960 e 224 e 4 214 e
Total purchases 210 e 75 e 32 e 80 e 72 e 0e 469 e
Margin 3 745 e
According to the profitability calcu- In the sales calculation example, the how many hours they would have to
lation, the business would have to share of purchases (469) is 11.1 % of be able to invoice in order to reach
generate a sales volume of €3,860 the total sales volume of €4,214, ex- the target net sales per month. The
per month or €46,321 per year (12 cluding VAT (i.e. from the correspond- time it takes to get to the site to be
months). As the entrepreneur needs ing net sales), 100 x 469/4,214 = 11.1 cleaned, during which no work to be
to ensure that they will not burn out, %. In other words, the percentage is invoiced will be done, must also be
sufficient resting times should also roughly the same (around 11 %). taken into account. Depending on
be taken into account in the calcula- the situation, the entrepreneur will
tion. That is why the calculation takes Margin be able to charge travel expenses
into account one holiday month dur- According to the profitability calcula- from the customers, provided that
ing which no invoices will be sent. tion, the required sales margin is 12 the travel expenses were included in
Thus, the annual required sales months x €3,435 or €41,221 per year. the offer. In the case of specific in-
volume of €46,321 is divided with 11 As the holiday month must be tak- dustries and long distances, charg-
months, or 46,321/11 = €4,211 per en into account, the required margin ing the travel time may also be pos-
month. The cleaning industry entre- must be compared with the monthly sible, but in such cases the charge
preneur would have to send invoic- margin according to the sales calcu- will be lower than the normal hour-
es totalling at least €4,211 per month lation example (€3,745) and a calcula- ly rate and it must be separately dis-
(plus VAT) in order to save up the tion for eleven months must be com- cussed with the customer.
funds required for the holiday month. pleted: 11 months x €3,745 = €41,195 The invoiced hours in the sales
In the sales calculation example, (the required sales margin per year). calculation example are 127 hours
the monthly net sales are roughly €41,195 per year is roughly the per month. This means that the en-
that, €4,214. same as the target figure of €41,221 trepreneur would have to clock in
per year (the required sales margin in 127 h/4 = 31.75 hours, or roughly
Share of purchases the profitability calculation). 32 hours per week. The daily invoic-
Supplies to be purchased are “varia- In the sales calculation example, ing requirement is 32 h/5 days = 6.4
ble expenses”. The more you clean, the percentage share of purchas- hours, or roughly 6.5 hours per day.
the more detergents and other sup- es (11.1 %) is slightly higher than the Time must also be put aside for
plies you will need. Their amount is share of purchases in the profitability the acquisition of new customers and
linked to the work done and thus al- calculation (11 %), which explains the the necessary paperwork, but these
so the sum invoiced. difference. The figures are of roughly cannot be invoiced from any one cus-
In the profitability calculation, the same magnitude, however. tomer. These hours will add to the ac-
the share of purchases is €425 per tual length of the working day. The
month or €5,100 per year. €425 Invoiced hours hourly invoicing price must be high
is 11.0 % of the net sales or 100 x In the sales calculation, the clean- enough to reach the required margin
425/3,860 (of the required monthly ing entrepreneur has thought about in the calculation. This has been tak-
net sales) = 11.0 %. en into account in the hourly prices of
the sales calculation example.
WHAT WOULD THE WORLD BE
LIKE WITHOUT ENTERPRISES?
Entrepreneurs innovate, create, and keep Finland going. They are hard-working and enterprising.
Entrepreneurs create jobs and pay a large share of all taxes. They deserve any income they might
have after all this. Entrepreneurs are used to making it on their own. But everyone can use some
help, support and networks every now and then. Become a member of the Federation of Finnish
Enterprises at www.yrittajat.fi/liity
Guide
SWOT analys
T
he SWOT four-field analysis is prise. The review may concern either side shows positive factors, while the
a simple and widely used tech- the whole business or just part of its op- right side shows negative factors.
nique for analysing business operations in greater detail.
erations. A SWOT analysis shows the The analysis helps with examining how
Strengths, Weaknesses, Opportunities The top row of the table shows the cur- the strengths can be developed, how the
and Threats for the business idea, the rent situation and issues within the weaknesses can be eliminated, how the
entrepreneur and the enterprise. It is business. The bottom row represents opportunities can be exploited and how
suitable for use in all forms of enter- the future and external matters. The left the threats can be countered.
Example of a SWOT analysis:
Strengths Weaknesses
• strong expertise • insufficient personal funds

• experience • no experience of working as an
• knowledge of the industry entrepreneur
• innovative product • family situation
• international contacts • weak language skills
Opportunities Threats
• globalization • entrepreneur’s ability to run the

• potential for growth business
• new products/services • increasing competition
• new market areas • changes to legislation
• political situation
Risk management 1 Set

objectives
2 Identify
risks
3 Definier
success
criteria
T
here are many ways in which an enterprise may be harmed
or suffer losses, i.e. the business is exposed to various risks.
However, risk in a business may also be an opportunity.
?
The entrepreneur must be prepared to take risks in order to suc-
4 Assess
ceed. Risks must be identified, prepare for them and protect itself risks
against them. In other words, the risks must be managed.
The risks in a business may be, for example, business risks, per-
sonnel-related risks, contract and liability risks, data-securi-
ty risks, product risks, environmental risks, risks from inter-
ruptions to operations, and risks from crime and fires. Good 7 Monitor 6 Implement 5 Produce
risk management is anticipatory, it takes all the available in- and review action plan action plan
formation into account, and it is systematic and well organ-
ised. Further information about risk management is available
from www.pk-rh.fi.

Start-up grants and adjusted
unemployment benefit
A
start-up grant is a discretionary An application for a start-up grant must CONDITIONS FOR
allowance that can be granted to be accompanied by the business plan, as GRANTING SUPPORT
a person who is becoming a full- well as profitability and funding calcula- Start-up grants can be granted if the en-
time entrepreneur at the startup and tions. The business advisors of the Finn- trepreneur is able to establish profitable
establishment stage of the business. A ish Enterprise Agencies can assist in business and (s)he has experience as an
start-up grant may also be granted to a completing them. A further requirement entrepreneur or has business training.
person who plans to expand their part- is a certificate of the payment of taxes/ The support must be necessary for the
time entrepreneurship into a full-time tax debt certificate, i.e., a statement on entrepreneur’s subsistence. The entre-
occupation. The start-up grant makes it whether the applicant has outstanding preneur must work in the business full-
easier for the entrepreneur to cope dur- taxes to pay. A certificate may be ordered time.
ing the time the business is picking up via the website of the Finnish Central Tax
speed. Start-up grants can be granted at Administration www.vero.fi/verovelka- The Finnish Enterprise Agencies pro-
the same time to several entrepreneurs todistus, for example, or one may be col- vide statements to the TE Offices on
who are working in the same start-up lected from a tax office. the prerequisites and profitability of the
business. Start-up grants are taxable in- planned business to support the TE Of-
come, i.e. tax is payable on them. The start-up grant corresponds to the ba- fice when making the start-up grant de-
sic unemployment benefit in compliance cisions.
It is worthwhile for someone considering with the Unemployment Benefit Act, ex-
setting up a business to contact their lo- cluding the increase part.In 2017, the ba- The conditions for granting a
cal Employment and Economic Develop- sic grant is €32.40 per day. The start-up start-up grant are that
ment Office (TE Office) www.te-servic- grant is paid for at the most five days in • the applicant has or (s)he will
es.fi in good time before starting their a calendar week. obtain adequate readiness for
operations and to establish the possibil- the intended business and that
ities for obtaining start-up grants. Oper- The start-up grant is paid once a month
ations must not be commenced before retroactively on the basis of an applica- • the intended business is of full-
the Employment and Economic Devel- tion for payment submitted by the grant time nature and it is estimated
opment Office has made a decision on receiver. The application for payment to meet the requirements
the start-up grants. shall be submitted to the Development of continuous profitable
and Administration Centre (KEHA Cen- operations.
Start-up grants can be paid for a peri- tre) of ELY Centres and TE Offices with-
od of up to 12 months. A decision on the in two months from the close of the pay- A start-up grant is not granted if
start-up grant is always made for a fixed ment period. • the intended business
period of time. The first period is always is estimated to secure a
six months. After that period, the entre- reasonable income for the
preneur may apply for a continuation of applicant at the start-up
the start-up grant for a maximum of an- and stabilizing stages of the
other six months. The continuation ap- You can apply for a business operations
plication for a start-up grant must be start-up grant from
delivered to the TE Office during the on- the TE Services in the • the start-up grant is estimated
going start-up grant period at the latest, Oma-asiointi online to distort competition between
approximately one month before the ter- service ( the providers of same products
mination of the start-up grant period. www.te-palvelut.fi > or services to more than a
Oma-asiointi).
minor extent
Some TE Offices offer development ser-
vices free of charge to entrepreneurs who • a private person who applies for
have received a start-up grant to boost a start-up grant has started full-
sales. The entrepreneur can choose the time entrepreneurship before
expert services from among the alterna- the decision on the grant was
tives offered by the TE Office. made.

Guide
• the person who applies for the

start-up grant or the company
Person who is a The TE Office will make a decision on the
prerequisites for the paying of the unem-
involved has materially part-time or short- ployment benefit and issue a statement
neglected their obligations that is binding on the party who will pay
to pay tax or other statutory term entrepreneur the benefit (the unemployment fund or
payments, or the person or
company has experienced
may also be the Social Insurance Institution of Fin-
land). The TE Office will request a report
material civil law default of entitled to receive on the business operations from the ap-
payment, unless the TE Office plicant before making the decision.
considers the granting of the the adjusted
start-up grant appropriate.
unemployment The amount of the adjusted unemploy-
ment benefit will be calculated by de-
A start-up grant cannot be paid if the in- benefit. ducting half of the income exceeding
come of the new entrepreneur has been the €300 protected portion from the dai-
secured in another manner, such as by ly unemployment benefit. If the person
wages, some form of support or bene- receives less than €300 per month from
fits. For more information on the start- part-time or short-term business oper-
up grant, please visit www.te-services. ations, it will not influence the benefit.
fi. The barriers for the granting of a start- No unemployment benefit will be paid to
up grant are governed in more detail in a person who is a full-time entrepreneur For more information on the adjust-
the Act on Public Employment and En- for more than two weeks. ed unemployment benefit for entrepre-
terprise Services. neurs, please visit www.te-services.fi.
According to the Unemployment Bene-
ADJUSTED UNEMPLOYMENT fit Act, a person is deemed a part-time
BENEFIT entrepreneur if the workload required
The term “adjusted unemployment ben- by the business operations is so low that
efit” refers to an unemployment ben- it does not prevent the person from ac-
efit paid to a person who is working cepting a full-time job. The workload
part-time. A person who is a part-time required by the business is the decisive
or short-term entrepreneur may also factor; the income from the business op-
be entitled to receive the adjusted un- erations or the lack thereof does not usu-
employment benefit. The adjusted un- ally influence the decision.
employment benefit will only be paid to
an entrepreneur if the person has been
deemed a part-time entrepreneur by
the TE Office or if the entrepreneurship
will last for a maximum of two weeks.

Open a Holvi account online
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www.holvi.com
Entrepreneur,
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With Holvi’s business current from banking to invoicing and

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So you can concentrate on the
things that really matter. Holvi
combines everything you need
in one nifty package:
1 2
Business Current Account Invoicing
Besides the payment features You can send invoices with
of a traditional bank account, few clicks and see all your
the Holvi account has eve- payments at a glance -
rything you need to run your straight from the account or
business. the mobile app.
3 4
Your own online store Paperless bookkeeping
You can also easily start direct Your Holvi account saves all
sales with the built-in online receipts and other bookkee-
store. ping material and creates au-
tomated reports out of them,
for example VAT-reports. Even
the bookkeeper’s job gets
easier.
Guide
Funding for a new business start-up

In the initial stages of a business, money EXTERNAL LIABILITIES With regard to the start guarantee, the fi-
is almost always needed to start up oper- Normally, an entrepreneur needs, in addi- nancing is negotiated directly with one’s
ations. The amount of money initially re- tion to equity, external capital, i.e. loans. own bank and the bank shall apply for
quired depends on the business idea, and Interest is paid on a loan, which may be the start guarantee on behalf of the en-
it fluctuates greatly depending on the in- linked to the Euribor reference rate, for in- terprise.
dustry. If operations are based on selling stance. In addition, the finance provider
the entrepreneur’s expertise as a service must obtain a return for itself, i.e. an inter- Finnvera offers funding also for various
and the use of his/her time ( for example, est margin, and a handling fee for the loan. financing needs of internationalizing en-
in interpreting and translation work), the The loan repayment terms vary depending terprises. Loans and guarantees may be
initial investment required is much less on the finance provider. Often the banks used to cover the working capital needs
than if a restaurant or a company manu- require a real security for the loan capital, in export projects or to finance the busi-
facturing goods is being established. The such as the pledging of a home or other as- ness operations abroad of a Finnish par-
initial investment enables establishment sets. You should always ask many different ent company. Export guarantees as well
of the enterprise and the start up of oper- banks for quotes on loans. as export credit and interest equali-
ations. When the business is profitable, zation services can be used to hedge
future investment requirements can be Also, funds from other external inves- against risks relating to the foreign buy-
covered by the income generated by the tors, such as acquaintances or family ers, banks and countries involved in the
business’s operations. members, may be capital in the form of export trade as well as to aid the arrange-
a loan that must be paid back with inter- ment of financing for export projects.
At the initial stage, the financing calcu- est. It is always worth agreeing in writ-
lation helps in establishing the financing ing on loans and their associated inter- CAPITAL INVESTMENTS
requirements and the financing sources. est and repayment terms. A capital investor (business angel or cap-
The size of the financing requirement is ital-investment company) invests money
usually clarified in connection with the It is worth the entrepreneur remember- in a target business in return for a share
drafting of the business plan. The busi- ing that short-term financial aid can al- of ownership (typically less than 50 % of
ness plan and a performance plan need- so be obtained by paying for supplies the shares). Capital investors take a sig-
ed as attachments to the application later (supplier credit), leasing, bank ac- nificant risk when they make an invest-
for financing can be drafted, for exam- counts with overdraft facilities, and cred- ment, and therefore they expect a sig-
ple, with the electronic tools of My En- it cards. Leasing finance is long-term nificant return from the investment as
terprise Finland service (www.enter- rental where the item for which finance compensation. The terms of the invest-
prisefinland.fi) or in the address www. is provided acts as security. ment will be specified in detail in the
business-plan.fi. shareholders’ agreement.
However, in the cases mentioned above,
EQUITY CAPITAL the entrepreneur must pay attention Crowdfunding is becoming increasing-
Entrepreneurs may invest in the busi- to the annual interest rate, which may ly popular. Different kinds of options are
ness their own money or other assets be substantially higher than a normal available. The types of crowdfunding
that they own and possess (property bank’s interest rate, i.e. the loan will be that are best suited for companies are
given as a capital contribution). The en- more expensive. crowdfunding based on equity and debt
trepreneur’s own savings, work tools or as well as on advance sales.
machines are referred to as self-financ- Finnvera
ing. Generally, lenders (i.e. banks) require Loan financing is mainly granted by the PUBLIC FINANCING
that around 20 % of the finance provided commercial banks and the special fi- A starting enterprise may receive sup-
comes from the entrepreneur before they nancing company, Finnvera www.finn- port for the development of the en-
consider granting a loan. vera.fi. Finnvera can act as the only pro- terprise inter alia from the ELY Cent-
vider of funding of an enterprise to be er (www.ely-keskus.fi/en/) and from
Equity capital can also be invested in the founded if the funding of Finnvera does Tekes (www.tekes.fi/en/). Especially
business by the entrepreneur’s friends, not exceed €50, 000. If the entrepreneur the internationalization and growth of
family members and acquaintances. As needs a guarantee for his/her bank loan, enterprises are subject to support.
a result, they can gain a share of owner- Finnvera may issue a guarantee for the
ship in the business. loan. A start guarantee is available for
enterprises entered in the Trade Reg-
ister no more than three years earlier.

1. launching, expansion or renewal development projects, piloting of pro-
2. innovations or improvement of duction, drawing up of a marketing plan
knowhow or for other consulting or expert services.
3. growth or internationalization Support may also be granted to an exist-
You must reserve 4. productivity ing enterprise if it takes up a completely
working capital to start 5. energy or material efficiency. new entrepreneurial activity.
a business because you
will have more expenses The enterprise must finance at least half The maximum establishment support
than income at first. of the costs of the development project. is €35,000. For a trial, the maximum
amount of support is €10,000.
No more than 50 percent of the expens-
es linked to the development measures Investment support may be granted to
and forming the grounds for support starting and expanding enterprises, in-
may receive funding. Such expenses are ter alia, for
wages, consulting, travel expenses, par-
ticipation fees and corresponding ex- 1. acquisition or construction of
Tekes funding penses. Investments included in the pro- production facilities
Tekes provides funding for enterpris- ject may be supported depending on the 2. acquisition of new machinery or
es aiming at export and international size and location of the enterprise by 10– other fixed assets
growth, especially small and medium- 35 percent of the expenses forming the 3. immaterial investments, such
sized enterprises with the ability and will grounds for support. as acquisition of software, pat-
to succeed. The funding may be a grant ents or manufacturing rights.
or a loan and it is sought for a project, The business development aid must be
part of the costs of which will be covered applied for prior to commencing the pro- The investment shall be of material sig-
by Tekes funding. ject. It is advisable to contact the ELY nificance to the establishment, growth or
Centre expert before submitting the ap- development of the enterprise.
With the help of Tekes funding, starting plication for support to clarify the pos-
enterprises may, for example, examine sibilities for the financing of the project. The amount of the support varies, de-
the customer needs of their products or The enterprise shall draw up a project pending on the line of business and the
test their product concept with potential plan for the development project, which objective area, between 20 to 40 percent
customers. In addition, Tekes may grant shall include the planned measures with of the costs.
funding for the development and pilot- schedules and costs as well as the results
ing of products, services and processes. aimed at by the project. Prior to launching the investment, the
enterprise may apply for support for the
Enterprises may utilise the Tekes pro- The aid shall be paid subject to a sepa- clarification and planning of the precon-
grammes also to expand their own kno- rate application as the project progress- ditions of the investment. The support is
whow and networks as well as use the es. An enterprise which receives aid must meant for the acquisition of expert ser-
expert services in the development, com- have the preconditions for profitable op- vices and it can be granted to cover 40–
mercialization and protection of their in- erations. 50 percent of the approved costs. The
novations. support for this feasibility study does
AGRICULTURAL ENTERPRISE not require implementation of the in-
Business development aid SUPPORTS vestment.
The ELY Centre (www.ely-keskus.fi/ In rural areas, the ELY Centre may grant
en/) may grant SMEs development aid for establishment support and investment Team Finland
development measures and investments. support for entrepreneurial activity out- internationalisation services
Development measures shall mean the side farming as well as for investment Team Finland (www.team.finland.fi)
development of the enterprise’s business feasibility study. If the founder of the en- maintains a list of internationalisation
operations, internationalization, prod- terprise has already been granted a start- services for businesses that are funded
ucts and production methods, prepara- up grant, the establishment support can- by the state of Finland. Services for dif-
tion of projects as well as other compa- not be granted. ferent stages of internationalisation are
rable significant business development. available, ranging from advice and mar-
The establishment support may be used ket information to funding and surveying
The aid is directed at projects which are to implement an enterprise start-up of international partners.
estimated to have a significant effect on plan, such as for acquiring guidance pre-
the enterprise with regard to its paring for business operations, product

Guide
Several parties included in the net- Please note!

work offer funding services of different
types. Centres for Economic Develop-
ment, Transport and the Environment
(ELY Centres) can also grant subsidies Funding options
for small and medium-sized enterprises
to develop their operations. The Finnish • Own funding: shareholders’ equity and securities
Funding Agency for Technology (Tekes; • Loan funding (from a bank or Finnvera, for example): in return, you
www.tekes.fi/en/) and Finnvera sup- will pay interest
port the growth of companies at different • Investments (such as business angels or other venture capitalists): in
stages. Tesi (Finnish Industry Investment return, you will offer the investor a partnership or dividends
Ltd, www.industryinvestment.com) • Public funding (such as the ELY Centre or Tekes): a subsidy or
makes capital investments in promising loan for starting your business, internationalisation, growth and
Finnish companies during their growth investments; in return, you will pay interest (Tekes)
and internationalisation. Finnfund • Rural business subsidy for business operations outside agriculture.
(www.finnfund.fi) grants long-term
funding for the establishment or expan-
sion investments of Finnish companies
or their partners that operate in devel-
oping countries. Finnpartnership (www.
finnpartnership.fi) offers business part- Answers by
nership support for the design, develop-
ment and training of long-term commer- a business advisor
cial cooperation in companies that aim
to do business in developing countries.
For more information on the Team Fin-

land services, please visit www.team.
finland.fi/en/services/. You can con-
tact Team Finland by filling out a con-
tact form at www.tekes.fi/en/team-
finland-contact/.
How can I assess how much

funding I will need?
When assessing your funding needs, you
must take into account the costs from your
place of business, the necessary tools, the
goods to be initially purchased in stock and
a sufficient budget for marketing at the
beginning. You will also need working capital
to cover the costs of the business when the
costs are still higher than the income. The
working capital should be flexible, as you
are bound to be faced with unexpected costs
when starting a business.
Timo Lehmusmetsä, Kouvolan Seudun

Uusyrityskeskus (Kinno)

Marketing, sales and advertising
WHERE CAN I FIND
CUSTOMERS?
Before establishing an enterprise, you
must research markets and find out what
the markets are like for your potential
enterprise. Based on this information
you can decide whether it is sensible to
establish an enterprise. You can also plan
the marketing of your enterprise better.
A starting entrepreneur can seldom af-
ford to waste his/her marketing euros.
When developing your business idea,

you have determined who your poten-
tial customers are and how many are
there in the operating area of your busi-
ness. You must also check your competi-
tors and their strengths and weaknesses.
Figure out why your business would be
better than theirs and where would you from the various databases and indexes The results may be used in the planning
be the underdog. It is also useful to find in the Internet or from the various social of marketing and sales or in product de-
information on the product and service media platforms. Information sources al- velopment. It is crucial for a starting en-
ranges and pricing of your competitors so comprise the municipal economic de- trepreneur to find out whether a busi-
as well as of their strategies. velopment offices and other authorities ness idea has what it takes to succeed
as well as Statistics Finland. or not.
Market research and sharpening
of your business idea You can get information on the market ENTREPRENEURSHIP IS
Market research is a way to gather infor- trends, competitors and corporate cus- SALES WORK
mation about markets, customer needs tomers from the business advisors and Success as an entrepreneur and the con-
and opinions, competition structure or experts of the Finnish Enterprise Agen- tinuance of business operations both de-
about the opinions of different custom- cies, the ELY Centres (www.ely-keskus. pend on sales. If the customers are not
er groups on a certain product or service, fi/en/), entrepreneur federations, the interested in buying, your path as an en-
business or business idea. Chambers of Commerce, federations of trepreneur will be very short even if your
industries, the registers of the Statistics product or service were the best. An en-
The most important questions Finland, the PRH (www.prh.fi/en/) (the trepreneur receives his/her income from
you need to ask are the following: Finnish Patent and Registration Office) customers and thererfore it is most im-
• Who are my potential as well as from undertakings maintain- portant to take care of your sales and the
customers? ing various data services. cash flow of the undertaking. Sales must
• How many are located in the also generate adequate gross margin so
area of my choice? If such desk research is still not suffi- that you can pay the fixed and variable
• Which groups (segments) can cient, you can receive answers directly expenses of your enterprise.
the customers be divided into? from your potential customers by send-
• How can I reach my customers? ing an E-mail or web questionnaire or Sales abilities play a key role in the suc-
• How much are the customers by interviewing them either by phone cess of an entrepreneur. The entrepre-
willing to pay for a product or or by meeting them in person. In a mar- neur must be able to sell his/her own
service? ket survey directed at consumers, the knowhow as well as the products or ser-
• Why would a customer rather consumers are asked what they antici- vices (s)he offers. Good sales skills are a
buy from my business than pate needing in the future or, even more way to differ from the competitors. Effi-
from a competitor? commonly, what is their present con- cient sales work helps to convince the
sumption like. There are several electron- customers and gives rise to a function-
If your customers are private consumers, ic tools available for making the surveys. ing interaction between an enterprise
you can gather background information and a customer.

Guide
Sales work is based on

identifying your customers
The most important aspect in sales work PRODUCT PRICE
• features •identity
is to recognize the needs and expecta-
• product name • competitive environ-
tions of the customer. It is important to ment
• innovation
clarify the starting point of the custom- • warrantly/ • production costs
er and therefore it is important to create guarantee services • customer’s perception
smooth interaction. Trust between the of product value
FOUR P’s
customer and the seller is essential for
for planning
successful sales and the maintenance of
the customer relationship. The creation
marketing
and strengthening of trust are the basic PROMOTION PLACE
elements of sales work. • sales area
• advertising • distribution
A sales process may take from a few • sales campaigns channels
minutes to even years depending on the • sales personnel
products or services offered. It includes
many phases from the initial contact and
the making an offer to contractual nego-
tiations and the finalizing of the sale. Source: Kotler Philip (1980) Principles of Marketing. Prentice Hall.
Sales should be planned ahead: use of
time, acquisition of customer informa- customer in order to achieve the best group, and you can focus on using these in
tion, tools to follow up the sales as well possible outcome. the marketing of your enterprise.
as the necessary support material.
FIRSTLY, IT IS GOOD TO PRODUCT: The goods or servic-
Sales skills can be learned and KNOW THE DIFFERENCE es and their features, the product
help for sales can be bought BETWEEN MARKETING AND name, guarantees/warranties, novel-
Even a starting entrepreneur may some- ADVERTISING ty value and how the goods/services
times acquire help for sales as an out- With advertising, the business strives to stand out from competing products.
sourced service from another entrepre- directly influence the purchasing deci- PRICE: The monetary or oth-
neur, a professional in sales – especially if sions of the consumer and to make the er compensation paid by the cus-
one is uncertain in sales work. Some peo- product well-known. A satisfied custom- tomer for the product. The de-
ple think that sales work requires certain er will come back readily. But if the ad- termining factors include the
personality traits and social skills but sales vertising does not provide the right in- competitive environment in the
skills can also be studied and developed. formation about the product’s features, it marketplace, market share, the
may be that the customer will not return. customer’s perception of the prod-
Courses and training in sales are an easy uct’s value, production and materi-
and efficient way to improve one’s own In marketing, a business strives to influ- al costs as well as discounts.
sales abilities. Sales work and the develop- ence the behaviour of consumers. The aim PLACE: The location where the
ment of sales skills improve the negotiat- of marketing is to create, maintain and product may be bought. Often,
ing skills that are important for an entre- develop customer relationships. Main- the term “distribution channel” is
preneur, his/her self confidence and goal taining customer loyalty is important, used. This refers to both concrete
orientation as well as develop his/her so- because acquiring new customers is of- business locations (i.e. stores) and
cial skills and discretion. Sales training var- ten much more expensive than keeping virtual business locations on the
ies from short courses of a few days to long- old ones. Loyal key customers also usu- Internet, such as an online store.
er training courses leading to a diploma. ally create the majority of sales volume. PROMOTION: All means of com-
munication via which the mar-
Every entrepreneur must do sales work. Marketing includes all the actions that aim keter, i.e. the enterprise, can pro-
A good seller sells himself/herself first to promote sales. A good work-tool to help mote its product. This includes,
and then (s)he can sell his/her products plan marketing is the so-called “marketing amongst other things, advertis-
and services. It is important for an entre- mix” model. It comprises the 4 P’s based on ing, communication at the point of
preneur to learn to understand the wish- the corresponding English words: Prod- sale or on the internet, sales cam-
es and behavior of customers. In custom- uct, Price, Place and Promotion. From paigns, public relations and the in-
er-oriented sales work, the entrepreneur these, you can choose the marketing mix formation passed between cus-
fulfills the needs and expectations of a desired according to your customer target tomers via word-of-mouth.

The marketing plan for the business will The aim of marketing is to create, main- Starting point
help make the marketing coherent and
clear. Using the plan, you can monitor
tain and develop customer relationships.
It is important to maintain customer loy- of marketing is
fulfilment of the objectives and devel-
op marketing in the future. It is worth
alty as the acquisition of new customers
is often far more expensive that keeping
customers: to whom
reviewing both the marketing mix and the old ones. Loyal key customers usual- you sell determines
the customer groups at regular inter-
vals. For example, you can consider the
ly generate most of the sales volume. For
many, the basis of entrepreneurship is a your marketing
following questions: have you achieved
what you wanted with the measures im-
well-maintained group of regulars who
also bring new customers through rec-
approach.
plemented? Or should you make chang- ommendations.
es or adapt your style of marketing
or advertising? Has the key customer SEGMENTATION OF and effectively as possible. An entrepre-
group changed its purchasing behaviour CUSTOMER GROUPS AND neur who is just starting up their busi-
(changed requirements)? Who are your SELECTION OF A TARGET ness rarely has time or money to invest in
customers now, and who do you want as GROUP massive marketing campaigns. The web
customers in the future? And what are It is good for a business to investigate offers versatile and cost-efficient oppor-
your competitors doing? which product group it wishes to sell tunities to market your products and
a product to. Even though acquiring a services. Many customers are already
COMPETITIVE WEAPONS IN large group of customers is tempting, online, so entrepreneurs should be too.
MARKETING it is worth focusing on the most impor-
Success in the markets requires good tant customer group that generates the Nowadays, people almost exclusively
knowledge of the business environment greatest sales for the enterprise with the search for information about products
and the competitors as well as distin- least effort. Marketing to a certain seg- and companies online. Up to 80 % of con-
guishing oneself from the competitors. ment (i.e. group) will reduce the num- sumers will study a product online be-
Marketing is the tool for influencing the ber of customers, but at the same time fore making a decision to buy it. Even a
consumer’s impression and experience it will increase the effectiveness of mar- small company should meet its custom-
of the goods or services offered by a busi- keting. There are various ways of specify- ers online in addition to its small store or
ness – “we are better than our competi- ing a certain segment. For example, age, other traditional sales channels.
tors”. Marketing is indeed an important place of residence or purchasing pow-
part of the planning work of an enterprise. er, i.e. how much money customers have Web visibility can take the form of ready-
available, can be used. When advertising made media space on chargeable internet
The starting point of marketing is cus- children’s toys for instance, it is worth fo- search services, the company’s own web-
tomers: to whom you sell determines cusing on areas where there are lots of site or an online store. In the case of all
your marketing approach. What you sell, families with children or on a baby mag- visibility, you should regularly update the
i.e., your products and services, come on- azine that is read by new parents. information and make sure that it can be
ly second in the order of importance. The viewed with all devices, including a mo-
customer buys the value (s)he can gain It is worth segmenting a market if: bile phone and a tablet. An online store,
therefrom, not, for example, technical • the market has enough like other websites, is a good way to col-
features or technological frills. Always potential customers lect information and build a customer
concentrate on the customer and his/ • a group’s customers have register. You must always tell the custom-
her needs, do not get too engrossed by common features and ers what you are using the data for and
the features of your product or service. requirements how they can prevent its use for purposes
• the customer groups differ from other than that desired by them.
The marketing of a starting entrepreneur each other
is mainly personal sales work. Most often • marketing will reach the chosen Familiarise yourself thoroughly with the
the question is how to sell one’s own work. segments economically and main features and prices of the various
As very little money is usually available, effectively. advertising media. The prices may vary
own time must be invested in sales work. strongly depending on the media.
The initial contact is most often made by SELECTION OF ADVERTISING
phone. The next step is to grab the suit- MEDIA Take some time to study the key features
case and meet the customers. It is worth looking for those media for and prices of different advertising media.
your business that you can use to get a
A business strives to influence the be- message, i.e. your advertisement, across
havior of customers through marketing. to the desired recipients as economically

Guide
The various media include An enterprise need not be present in all capable image; when a customer needs
• newspapers, local and free social media channels so the first step products or services from the field of the
papers, and magazines is to determine which channels the po- enterprise, the enterprise will be the first
• the Internet (among other tential customers of the enterprise fa- in his/her thoughts.
things display, blogs, virtual vor. The use of the different social media
world, social media) channels varies inter alia by age. Instructions and tips for social media
• television communications are available, for ex-
• outdoor advertising and Presence in social media requires that you ample, in printed and electronic guides
business advertising media are continuously active. Furthermore, you as well as from blogs. One way to learn
• radio must have the willingness and time to be more of social media usage is to follow
• films (including product in social media. So, consider with care it. By following the social media commu-
placement) what you can do and increase your so- nications of other enterprises, one can
• mobil. cial media presence within these limits. learn what is working and what is not.
Social media is primarily a communica-
Direct marketing is one common way to tions channel and therefore one should
reach customers. For example, a pizze- avoid direct advertising. It is worthwhile
ria entrepreneur may distribute adverts to produce useful and/or entertaining so-
him/herself to letterboxes of residents cial media contents that are pleasant to
in the neighbourhood. All brochures, follow and easy to share. Social media of-
business cards, etc. to be distributed di- fers a possibility to invest in a positive and
rectly to people either in person or elec-
tronically are forms of direct-marketing
media. However, in direct marketing, you
must take account of authorisation is-
sues, i.e. whether you need customer au-
thorisation for marketing or, in the case
of minors, parent/guardian authorisa-
Answers by
tion, if you use e-mail for example. a business advisor
A really important marketing channel is
communication among people, i.e. so-
called word-of-mouth. Customers of-
ten tell each other about their good and
bad experiences, so information about a
product spreads on Facebook, for exam-
ple. In marketing, it is also worth paying
special attention to how you treat a cus-
tomer in a service situation. For exam-
ple, are you able in a sales situation to
provide added value for a product, which
creates a positive image (amongst oth-
er things, appearance of packaging, dis-
counts, home delivery, items thrown in How can I reach my
for free)? Or how, for example, will you customers?
deal with complaints? This is one of the key questions in business.
Thinking logically and using common sense will
SOCIAL MEDIA IN THE assist you in answering it. Try not to think in
MARKETING OF AN an overly complicated manner: first name your
customer groups and then think about where
ENTERPRISE they are and what the best way to approach
For a starting entrepreneur, the social each group is. You will be able to sell products if
media is a cost-effective way to reach po- you listen to your customers. Common sense is
tential customers. However, presence in the key also in this case.
the social media requires time and a sys-
tematic approach from the enterprise to Valentin Babitzin, Helsingin
Uusyrityskeskus (NewCo YritysHelsinki)
achieve the desired results.

Pricing
B
efore you price your products, con- at travel agents. There are also custom- as the sales margin. If you sell products
sider whether your service is bet- ers who want to pay the price specified at a high price (i.e. margin), you don’t
ter or of higher quality than the by the tariff without any negotiations or have to sell a large number of products
competitors’. Thus, will you sell your bargaining. to make your business profitable, but if
products at a higher or lower price than you sell products at a low margin, you
your competitors? What added value are Always keep your prices on view to your will have to sell a lot of them. So check
customers prepared to pay for? Will they customers. A good price list tells the cus- how large of a sales margin you will re-
pay, for instance, for the image, product tomer both the product price and what ceive for each product sold. Is the mar-
quality, good customer service, a warran- the price includes. The consumer will on- gin sufficient when taking into account
ty/guarantee or location? ly be interested in the final price, includ- the number of products sold?
ing VAT. The corporate customer will be
Think carefully about the price level, and interested in the price net of VAT, be- Example: You sell a product that
set it so that it is in line with the product cause VAT on purchases can be deduct- costs €28 to produce. Your compet-
image. A quality, i.e. high-priced, product ed from VAT on sales. itor sells the same product to cus-
requires a high-quality setting. When you tomers at a price of €55 (incl.VAT).
have started to offer a product, negotiate SALES MARGIN Look what effect it has on the prof-
on its price and then sell it at a certain Carefully consider what the correct price it margin if you sell the product at
price, it is very difficult in the future to for your product is. Your company must a price that is 20 % lower than your
raise the price. Also remember that many retain some of the product’s sales price competitor’s.
customers will expect there to be “room
for negotiation” on the price.
The pricing of expert services can be Competitor’s Price that is

based on time required. However, the EXAMPLE ON PRICING price 20 % lower
EUR EUR
hourly rate does not tell the customer the
total price, because they will not know Sales price 55.00 44.00
how much time will be required for the - VAT 24% -10.65 -8.52
work. Use a pricing model as an aid in Price net of VAT 44.35 35.48
which you give details of the work con- Purchase price (VAT 0%) -28.00 -28.00
tents and the time used for the work.
Profit margin 16.35 7.48
In pricing, you can also use devices such EXAMPLE OF THE CALCULATION OF SALES
as introductory offers, contract prices, PRICE
“fast purchase” offers and special-offer
periods ( for example during a quiet peri- Total costs of the product 150.00
od). With these devices, you can set your + Target sales margin (35 %) 80.77
basic tariff at the level you desire. Ex- = sales price net of tax 230.77
amples of pricing models are restaurant + VAT 24 % 55.38
lunch prices or early booking rewards = sales price including tax 286.15

Guide
Licensed industries
I
n Finland, there is freedom of trade.
This means that here you may engage
in business operations that are lawful
and in accordance with good practice
without requiring a licence from the au-
thorities. However, for certain industries,
you do need a licence for the sake of the
community, the environment and con-
sumer safety. In other fields, you must
notify the authorities of your operations,
even though an official licence is not re-
quired.
Licences are granted by local authori-

ties (municipalities and cities) and re-
gional administration offices along with
government departments, local environ-
mental-protection authorities and other
licensing authorities.
Before operations are commenced, it is

always important to check whether a
special licence or declaration is needed
for the business and what else is required
from a trader in this field. To acquire a
licence the applicant must generally be
professionally competent and qualified
to enter into legal contracts and have a
good reputation. Also, the applicant’s fi-
nancial situation will have an impact on
whether (s)he can obtain a licence. The li-
cences required by businesses that pro-
vide a service are shown on the webpag-
es www.enterprisefinland.fi.
A licence is generally for a fixed period,

and it can be revoked if the person does
not comply with the provisions of the li-
cence. Application for a licence is usu-
ally subject to a charge. In some cases,
a licence is needed from many different LICENCES FOR SOCIAL AND practitioner is required to submit a noti-
authorities. For example, in the cater- HEALTH CARE PROVIDERS fication of his/her activity to the Regional
ing industry, hygiene certification and li- The National Supervisory Authority for State Administrative Agency (AVI, www.
cences to serve food and alcohol are re- Welfare and Health in Finland, Valvira avi.fi/en/).
quired, and declarations must be made (www.valvira.fi/en/) grants the right to
to the health inspector, the rescue ser- carry out work in the healthcare profes- Provision of private social welfare servic-
vices, building-regulation departments, sion in Finland to healthcare professions es requires a notification of the services
amongst other things. trained abroad, subject to application. and an application for a licence with re-
Such people include doctors, nurses, den- gard to round-the-clock services. The li-
tists, qualified chemists, midwives, speech cence shall be granted by AVI when the
therapists and psychologists. A healthcare service is produced in the area of one
professional working as an independent AVI; in other cases by Valvira.

The National Supervisory Authority for customers or residential use and the op- Kuvasto (www.kuvasto.fi) grants li-
Welfare and Health (Valvira; www.val- erations take place in a residential build- censes for images of the artists’ work.
vira.fi/en/) can grant, by application, ing or a residential neighbourhood, the Free image banks are available in the In-
the right to practice a social welfare pro- operator shall submit a written notifica- ternet.
fession either as a certified or a licensed tion in accordance with the Health Pro-
professional in Finland. Social welfare tection Act to the municipal health pro- In the municipality or the city, there may
professionals include social workers, tection authority. The notification need be different regulations concerning out-
Bachelors of Social Services, geriatric not be submitted if the activities require door advertising and sales, for instance.
nurses, practical nurses, home aids and an environmental permit in accordance
nurses for the mentally handicapped. with the Environmental Protection Act. Import-related licences are granted by
Authorization Centre of the Finnish Cus-
FOOD ESTABLISHMENTS The licence for the sale of tobacco prod- toms (www.tulli.fi/en/).
Food establishments, such as restau- ucts shall be granted by the municipal
rants, shops and kiosks must file a writ- health inspector (www.localfinland.fi).
ten notification to the local food control
authority before the beginning of opera- LICENCES FOR THE USE OF Please note!
tions or any substantial change in oper- COPYRIGHT PROTECTED
ations. The beginning of operations does MATERIAL
not require an inspection by the control For playing music (radio, TV, CDs, live
authority. music) in public places, such as a busi- Before establishing a
ness’s customer premises, it is neces- company, study the
However, if a facility where foodstuffs sary to pay a fee to the copyright organ- following:
are handled is used to process animal- isations. If music is played, for example,
based foodstuffs before selling them to from a computer or an mp-3 player, a • Will you need a business
retail customers, an approval for the fa- separate reproduction remuneration licence, or do you have
cility must be sought from the local food shall be paid. Streaming services such as to make a notification or
supervision authority before starting the Spotify, which are meant for private use, register the company?
business operations or making a mate- may not be used in entrepreneurial ac-
rial change in the nature of the opera- tivity. The Finnish Composers’ Copyright • Will the business operations
tions. Such facilities for which an approv- Society Teosto (www.teosto.fi) collects require an approval from
al is necessary include meat preparation fees payable to composers and lyricists, an authority or special
plants, dairies and egg packaging plants, and the Copyright Society of Perform- professional qualifications?
for example. ing Artists and Phonogram Producers,
Gramex (www.gramex.fi/en/), collects For industry-specific permits
The Finnish Food Safety Authority (Evi- fees due to musicians, singers, conduc- and licences and professional
ra, www.evira.fi/en/) approves slaugh- tors and producers of recordings. All li- qualifications, please visit
terhouses and meat industry plants in cences required to play background mu- www.entrprisefinland.fi >
connection with slaughterhouses. How- sic to customers can be bought at www. Permits.
ever, the approval of reindeer slaughter- musiikkiluvat.fi.
houses and plants in connection with
them is done by the Regional State Ad- Licences for photocopying or printing
ministrative Agencies (www.avi.fi/en/). out from the Internet material protect-
ed by a copyright, such as books or mag-
NOTIFICATION UNDER THE azines, as well as for scanning journals
HEALTH PROTECTION ACT in the enterprise shall be obtained from
The approval procedure specified by Kopiosto Copyright Society (www.ko-
the Finnish Health Protection Act con- piosto.fi).The annual sticker of Kopios-
cerns, amongst other things, hairdress- to shall be attached to the printer to in-
ers’ and barbers’ salons, beauty or foot- dicate the licence.
care premises and tattoo businesses. The
local health protection authority is re- A license to use an image of a work of vis-
sponsible for approving such businesses. ual art in websites, the brochures, post-
ers and annual reports of an enterprise
When establishing or introducing opera- must be obtained from the artist, pho-
tions which may cause health hazards to tographer or the holder of their rights.

Guide
INDUSTRIES REQUIRING A LICENCE OR NOTIFICATION
Industry Licence/notification/registration Organization/authority

Notification pursuant to section 13 of the Municipal health protection authority
Beauty parlours, hairdresser-barbershops
Health Protection Act (www.localfinland.fi)
Notification of the commencement of Regional State Administrative Agencies
Brokerage of real estate
brokerage of real estate (www.avi.fi/en/)
Notification of the commencement of Regional State Administrative Agencies
Brokerage of rental apartments
brokerage of rental apartments (www.avi.fi/en/)
Companies that assess the aptitude of Office of the Data Protection Ombudsman
Notification of operations
employees and handle recruitment (www.tietosuoja.fi/en/)
Data Protection Ombudsman
Companies that practice credit business Notification of operations
(www.tietosuoja.fi/en/)
Driving schools Driving school licence Trafi (www.trafi.fi/en/)
Electrical works (electrical installations

Notification of electrical work Tukes (www.tukes.fi/en/)
and repair of electrical appliances)
Reservation notification/exploration permit/
Exploration Tukes (www.tukes.fi/en/)
gold panning permit
Facilities where animal-based foodstuffs
Application for the approval of a facility where Municipal food control authority
are handled before selling them to retail
foodstuffs are handled (www.localfinland.fi)
customers
Food establishments (grocery stores, Municipal food control authority
Notification of a food establishment
restaurants, kiosks) (www.localfinland.fi)
www.trafi >Road> Licenses and approvals
Garage operations Trafi (www.trafi.fi/en/)
> Garages
Gold panning Gold panning permit Tukes (www.tukes.fi/en)
South Ostrobothnia Centre for Economic

Domestic goods transport license/
Goods transport Development, Transport and the
Community license
Environment (www.ely-keskus.fi/en/)
Municipal food control authority
Notification of a food establishment/retail (www.localfinland.fi)/Regional State
Grocery stores trade license for alcohol/retail trade license Administrative Agencies (www.avi.fi/
for nicotine products en/)/municipal authority
(www.localfinland.fi)
Import of alcoholic beverages (holders
of licences for serving and retail sales of Import notification Valvira (www.valvira.fi/en/)
alcoholic beverages)
Industrial handling and storage of Licence for plants dealing in large-scale
Tukes (www.tukes.fi/en/)
(dangerous) chemicals industrial handling and storage
Installation and maintenance of fire alarm
Notification of operations Tukes (www.tukes.fi/en/)
systems
Registration as an agent • registration as an Financial Supervisory Authority
Insurance agents and brokers
insurance broker (www.finanssivalvonta.fi/en/)
Finnish Food Safety Authority Evira
Laboratories Laboratory approval
(www.valvira.fi/en/)
Land extraction permit • notification on the The municipal authority in charge
hearing of neighbours • notification pursuant
Land extraction (www.localfinland.fi)
to section 23 a of the Land Extraction Act
(Other possible) (www.ymparisto.fi)
Finnish Safety and Chemicals Agency,

Lift maintenance and repairs Notification of electrical work
Tukes (www.tukes.fi/en/)
Tukes (www.tukes.fi/en/) Municipal
Manufacture and import of chemicals Chemical notification Environmental permit environmental protection authority
(www.localfinland.fi)
Manufacturers and sellers of precious
Application for responsibility mark Tukes (www.tukes.fi/en/)
metals
Tukes (www.tukes.fi/en/) Regional State

Reservation notification• mining permit/
Mining Administrative Agencies
mining safety permit Environmental permit
(www.avi.fi/en/)

Regional State Administrative Agency of
Operation of debt collection (on behalf of License for a collection business/notification Southern Finland (www.avi.fi/en/)/Data
another) of operations Protection Ombudsman
Centres for Economic Development,
Taxi license/notification of commencemnt of
Operation of taxi services Transport and the Environment
taxi services
(www.ely-keskus.fi/en/)
Data Protection Ombudsman
Opinion polls and market surveys Notification of operations
Pharmacy and subsidiary pharmacy licences •
Pharmacies, pharmaceutical industry, Finnish Medicines Agency Fimea
medicinal product manufacturer's licence and
pharmaceutical wholesalers (www.fimea.fi)
pharmaceutical wholesale licence
Operations within the region of one AVI
Agency: Regional State Administrative
Application for licence to provide private
Private health care services Agencies (www.avi.fi/en/), operations
health care services
within the region of two or more AVI
Agencies: Valvira (www.valvira.fi/en/)
Private security services (private security
National Police Board, supervision of the
companies, security stewards and security Private security company licence
security sector (www.poliisi.fi/en/)
officers)
Private social welfare services (round-the- Licence to provide round-the-clock social Regional State Administrative Agencies
clock) welfare services (www.avi.fi/en/)
Private social welfare services (other than Notification of the provision of social welfare The municipality where the service is
round-the-clock) services provided (www.localfinland.fi)
Production of alcholic beverages for
Licence to produce alcoholic beverages Valvira (www.valvira.fi/en/)
commercial purposes
Application for approval of activity in a waste
Professional waste carriage and brokerage Transport and the Environment
management register
South Ostrobothnia Centre for Economic
Public transport services in Finland and Public transport licence • Community licence
Development, Transport and the
the EU for passenger transport
Refrigeration and fire extinguisher
Notification of operations Tukes (www.tukes.fi/en/)
operators
Regional State Administrative Agencies
Retail sales of alcoholic beverages Retail trade licence
(www.avi.fi/en/)
Permit for sales as well as signposts for the
Sales along the roads Transport and the Environment
seasonal sales operations
Regional State Administrative Agencies

Serving of alcoholic beverages Licence to serve alcoholic beverages
(www.avi.fi/en/)
Slaughterhouses and falitities connected Evira (www.evira.fi/en/), reindeer

thereto as well as game processing Approval of a food establishment as a facility slaughter facilities: Regional State
facilities Administrative Agencies (www.avi.fi/en/)
Finnish Transport Safety Agency
Technical inspection of vehicles Technical inspection license of vehicles
(www.trafi.fi/en/)
Telecommunications notification/Program
Telecommunications, programmes, video- Finnish Communications Regulatory
broadcasting notification/VOD notification/
on-demand ja pay TV services Authority (viestintavirasto.fi/en/)
Pay TV service notification
Finnish Competition and Consumer
Tour operators and retailers Registration of a travel agency
Authority (www.kkv.fi/en/ )
Registration application of trust and
Trust and company services, foreign company services as well as register Regional State Administrative Agency of
exchange transactions application for foreign exchange Southern Finland (www.avi.fi/en/)
transactions
Undertakings engaged in web server Data Protection Ombudsman
Notification of operations
renting (www.tietosuoja.fi/en/)
National Supervisory Authority for Welfare
Wholesale of alcoholic beverages Alcoholic beverage wholesale licence
and Health, Valvira (www.valvira.fi/en/)

Guide
PROFESSIONAL APPROVALS AND QUALIFICATIONS
Person(s) Approval/qualification Organisation/authority

HT examination as well as KHT and JHT Accounting supervision
Accountants
qualification examinationss (www.prh.fi/en/)
Trafi (www.trafi.fi). Service provider
Driving instructors Driving instructor permit
Ajovarma Oy (www.ajovarma.fi/en/)
Employees of several companies
Occupational safety card www.tyoturvallisuuskortti.fi
working at a shared worksite
Goods Inspection Board of Finland
Goods inspectors (HTT) HTT examination Chamber of Commerce
(www.kauppakamari.fi/en/)
Application to practice as a licenced
Health care professionals professionals/use a protected Valvira (www.valvira.fi/en/)
occupational title
Finnish National Rescue Association SPEK
Hot work professionals Hot work card
(www.spek.fi)
Board of Examiners for Real Estate
Letting agents (LVV) LVV examination
Agents (www.kauppakamari.fi/en/)
Person acting as the responsible Educational establishments offering the
License to serve alcohol (alcohol
manager or his substitute in licensed alcohol passport examination
passport)
premises (www.valvira.fi/en/)
Persons who handle unpackaged Food Hygiene Proficiency Certificate Proficiency examiners
perishable foodstuffs in their work (Hygiene passport) (www.evira.fi/en/)
Notification of private health care service Regional State Administrative Agencies
Private health care service providers
provision (www.avi.fi/en/)
Approval as a security guard (security
guard licence) • approval as a security
(Private) persons working in the Municipal police department (www.
officer (security officer licence)• approval
(private) security sector poliisi.fi/en/)
as a security steward (security steward
licence)
FISE Qualification of Professionals in
Professionals in Building, HVAC and Real Qualification of Professionals in Building,
Building, HVAC and Real Estate sector
Estate sector HVAC and Real Estate sector
(www.fise.fi)
Property Valuation Board of Finland
Property valuers (AKA and KHK) AKA and KHK examination Chamber of Commerce
(www.kauppakamari.fi/en/)
Board of Examiners for Real Estate
Real estate agents (LKV) LKV examination
Agents (www.kauppakamari.fi/en/)
Application for licensing / a protected
Social welfare professionals Valvira.fi (www.valvira.fi/en/)
occupational title
Supervisors of electrical work and lift Certificate of electrical and lift Henkilö- ja yritysarviointi SETI Oy
work qualification (www.seti.fi)
Applications to Ajovarma Oy
Taxi drivers Taxi driver licence (www.ajovarma.fi/en/) Trafi
(www.trafi.fi/en)
ADR training organisations
Transport of dangerous goods ADR licence
(www.trafi.fi/en/)
Other permits and notifications

Pirkanmaa Centre for Economic
Abnormal transport Abnormal transport permit Development, Transport and the
Work carried in the road area Permit for work carried in the road area Transport and the Environment

Permits and registrations of foreigners
T
he nationality of a foreigner de- for establishing a business or for hold- name (a self-employed person) or is sub-
cides which permits or registra- ing a managerial position in a business. ject to comparable corporate responsi-
tions (s)he needs to engage in en- bility. In most cases, entrepreneurs carry
trepreneurship when moving to Finland. Moving from another Nordic out a trade as a private trader, in a gener-
country al partnership or as a general partner in
Anyone moving to Finland must submit A citizen of another Nordic country a limited partnership. If a person acts as
a notification of the move to the Local (Sweden, Norway, Denmark, and Ice- a silent partner in a limited partnership
Register Office (www.maistraatti.fi) land) moving to Finland shall register and works in his/her own undertaking,
if the stay in Finland is to exceed three at the local register office, if the intend- (s)he will need a residence permit for an
months. The notification must be sub- ed stay is to exceed six months. For this employed person.
mitted within a week of the move. purpose, the person must visit the Local
Register Office of his/her place of res- If the immigrant has a limited liabili-
Citizens of EU/EEA Member States must idence in person. A passport/identity ty company (oy or oyj), whose shares (s)
register in Finland at a service point of card is needed to verify one’s identity. In he owns and where (s)he works, (s)he
the Finnish Immigration Service (www. addition, a notification of the move must will need a residence permit for an em-
migri.fi/en/) if they will be staying in the be submitted to the Population Informa- ployed person. A residence permit is not
country for more than three months. tion System (www.vrk.fi/en/). The mov- granted only on the basis of ownership of
ing notification can also be made with a shares but the person must also work in
Those moving from outside the EU/EEA form available at all post offices and lo- the company and the work must be per-
need, as a main rule, a residence permit cal register offices. formed in Finland.
granted by Finland in order to work or to
engage in a trade in Finland. If the per- Citizens of EU/EEA Member As a main rule, a residence permit shall
manent place of residence or municipal- States be applied for prior to entry into Finland
ity of residence is outside the EEA, a per- A citizen of an EU Member State, Switzer- from the Finnish embassy of the country
mit of the National Board of Patents and land or Liechtenstein who plans to stay where the person lives or resides legally.
Registration of Finland may be needed in Finland for more than three months
to work or run a business must regis- The first temporary residence permit
ter at a service point of the Finnish Im- and the new fixed-term residence per-
migration Service. A separate residence mit (continuation permit) will be grant-
permit is not required. At the local reg- ed by the Finnish Immigration Service.
ister office, the person to be registered
shall fill in and sign in person the regis- The handling of the application for a res-
tration form for foreigners as well as the idence permit for a self-employed person
notification of move for the Population is a two-stage process. First, the Centre
Information System. The stay in Finland for Economic Development, Transport
will be deemed permanent if the person and the Environment (www.ely-kes-
will reside in Finland for at least twelve kus.fi/en/) makes a partial decision
months. A person can request for tem- on the application. It shall evaluate the
porary registration if they will be living in profitability of the business and the suf-
Finland for less than 12 months. An iden- ficiency of income. The profitability of
tity card (with a photo)or a passport is business is evaluated on the basis of var-
needed to verify your identity. ious accounts received in advance, such
as a business plan, binding preliminary
Moving to Finland from outside agreements and financing. When the
the EEA Member States partial decision is made, the Finnish Im-
A person moving to Finland from out- migration Service or the police shall pro-
side the EEA Member States needs a res- cess the application and make a decision.
idence permit for a self-employed person
in order to engage in trade in Finland. A A municipality of residence or a tem-
person shall be deemed a self-employed porary address must be registered for
person if (s)he is engaged in trade or a person moving to Finland and they
practices a profession in his/her own must get a Finnish social security code.

Guide
The residence permit must be valid for at In practice, permits have been granted Please note!
least twelve months. At the local register only to people who have a permanent
office, the person to be registered must residence in Switzerland, i.e. a country
fill out and sign in person a registration that has signed the Lugano Convention.
form for foreigners as well as a notifica- • Citizens of a Nordic country:
tion of the moving for the Population In- At least one partner of a general partner- if you are going to stay in
formation System. As a general rule, you ship and the general partner of a limit- Finland for more than six
need a passport to prove your identity. ed partnership shall have his/her place months, you must register at
of residence or, if the partner is a legal a local register office. A visit
With regard to the registration of a mu- person, its domicile, in the EEA. In other to the local register office in
nicipality of residence, the registration cases, the permit of the NBPR shall be ap- person is required. You must
is subject to i.e. the residence permit of plied for to all partners in a general part- also submit a notification of
the person (permanent or temporary) as nership and to all general partners in a your move to the Population
well as to the grounds based on which limited partnership. The silent partners Register (www.vrk.fi/en/).
the permit was granted. Under the law, if of a limited partnership are not required
a person has a temporary residence per- to have their places of residence or dom- • Citizens of EU/EEA Member
mit for one year, an employee is required icile in the EEA. States: if you are going to
to have, in addition to the residence per- stay in Finland for more than
mit, employment for at least two years in The founders of a limited-liability com- three months, you must
Finland in order to receive a municipali- pany or a co-operative may also come register at a service point
ty of residence in Finland. from outside the EEA. However, at least of the Finnish Immigration
one member of the Board of Directors of Service and then at the local
A foreign national may also receive a a limited-liability company or a co-op- register office. A visit to the
Finnish personal identity number al- erative shall have his/her place of resi- local register office in person
ready when applying for a residence per- dence in the EEA; otherwise the permit is required.
mit with Finnish diplomatic missions or of the NBPR is required for all members
the Finnish Immigration Service. A pre- of the Board. The same requirement of • People moving to Finland
condition is that the applicant is granted place of residence applies also to depu- from a non-EU/EEA country:
a residence permit and (s)he himself/her- ty members of the Board. The situation is as a general rule, you must
self requests a personal identity number. calculated separately with regard to the apply for a residence permit
In that case, very concise personal infor- ordinary members and the deputy mem- before coming to Finland
mation and postal address in Finland or bers. from the Finnish embassy
abroad shall be registered on him. The at the country whose
registration as a permanent resident in The managing director of a limited liabil- legal resident you are.
Finland ( full personal information and ity company or a co-operative (and their The residence permit will
familial relationships) takes place only deputy, if any) must have their place of be granted by the Finnish
at the local register office on the basis of residence in the EEA or else a permit of Immigration Service. You
a personal visit. For further information, the NBPR is required. An exemption to must visit a local register
contact a local register office. people living elsewhere can be granted if office to register as a person
the Board of Directors includes at least permanently living in Finland.
PERMITS TO PERSONS one person who lives in the EEA (or Swit- A visit to the local register
RESIDING ABROAD zerland). A conditional permit will be office in person is required.
Whether a person from outside the EEA, granted to citizens of the US or Finland
who is establishing a business in Finland, living in countries other than Switzer- • People who permanently
needs a permit of the National Board of land or the United States in such a man- live outside the EEA: in some
Patents and Registration of Finland (NB- ner that the permit will be valid as long cases, a permit from the
PR) depends on the corporate form. Al- as there is at least one ordinary Board National Board of Patents
so holding a managerial position in a member who lives in the EEA (or Swit- and Registration of Finland
business may require a permit of the NB- zerland). Additional information on per- to establish a company or
PR. mits to persons from outside the EEA is run one may be required.
available at www.prh.fi/en/. Your citizenship is not the
The permanent place of residence of a decisive factor here, but your
private entrepreneur must be located in permanent place of residence.
the EEA; in other cases, the permit of the See www.prh.fi/en/.
NBPR is required to establish a business.

Establishing
a company
Your company will exist once it has
been registered. Before registering
the company, you must make a
decision on the company form.
“Anything is possible as
long as you believe in it
and work for it. Anything.”
Rebekka Lalli
CrossFit
Kirkkonummi Oy
• Rebekka Lalli, who
has previously been
a police officer and a
professional soldier, had
to choose a new career
because of a difficult
medical condition
involving her vertebrae.
In 2014, she established
her own crossfit gym
for the love of the sport.
When establishing the
company, Rebekka
was sparred by the
Espoo Region Finnish
Enterprise Agency.
Read Rebekka’s
on our website at

Guide
Stages of establishing a company

Path to entrepreneurship
1. Test and record your business idea.

What, for whom, how?
2. Draw up a business plan as well as a cash flow

statement, profitability calculation and sales
3. Check whether the business is subject to a li-

cence.
Any licences may be granted only after the en-
terprise has been registered and it has a Busi-
ness ID.
4. Choose the company form and trade name.
5. Arrange financing.
Please note: If you apply for a start-up grant
• Contact your local TE Office before applying
for the start-up grant
• Do not register the company before the TE Of-
You can submit a limited liability company notification (and es- fice has made a decision on the start-up grant
tablish the company) online or with a paper form; notifications
on other company forms must be made with paper forms. As
of the beginning of March 2017, private entrepreneurs can also
6. Prepare the establishment documents
• General partnership and limited partnership:
submit their notification of establishment online. Limited liabil- partnership agreement
ity companies and co-operatives can submit their establishment • Limited liability company: Memorandum of
documents with the establishment package available at www. Association, Articles of Association, Min-
ytj.fi/en/, provided that they only need to submit the stand- utes of the meeting of the Board of Directors
ard documents. Please fill in the forms in Finnish or in Swedish. (where necessary)
• Co-operative: Memorandum of Association,
With the same declaration, you can also enrol in the registers Rules of the co-operative, Minutes of the meet-
of the Finnish Central Tax Administration, comprising the reg- ing of the Board of Directors (where necessary)
ister for collection of tax at source, the register of employers
and the register for those liable to VAT. 7. Register the company
• In the Trade Register (Start-up notification, per-
Private entrepreneurs, general partnerships and limited part- sonal data form, establishment documents)
nerships can also submit the information needed to determine • Registers of the Finnish Tax Administration
their advance tax on the establishment form. (Prepayment register, VAT register and Em-
ployer register, if necessary)
• Fill out the shared start-up notification form
of the National Board of Patents and Registra-
tion of Finland and the Tax Administration. You
Personal data must be have to enclose the establishment documents
submitted to the Trade and and personal data form.
Register with a separate For instructions on how to submit the notifica-
personal data form. tions, the forms and templates, please see the
Business Information System at www.ytj.fi/en/.
8. Find suitable premises for your business.
42 Establishing a company
Forms of enterprise
I
n Finland, it is possible to carry out PRIVATE TRADER (OWN workplace and without external man-
business operations in the following FIRM) power. A self-employed person may be,
forms of enterprise: private trader, gen- An individual with permanent domicile for instance, a seamstress, carpenter or
eral partnership, limited partnership, in the European Economic Area (EEA) interpreter.
limited liability company, co-operative, may operate as a private trader in Fin-
branch of a foreign enterprise. The fol- land. A person who lives outside the EEA A trader is an entrepreneur who has a
lowing forms of enterprise are less com- needs a licence from the National Board permanent workplace or who can em-
mon: Societas Europaea, European of Patents and Registration of Finland ploy other staff.
co-operative society and European Eco- www.prh.fi/en/ for establishing a busi-
nomic Interest Grouping (EEIG). ness. Establishing your firm
Establishing the firm is simple. Separate
When determining the most suitable Operating as a private trader means that documents are not necessary. However,
form of enterprise for you, the busi- the person carries out business opera- you must notify the Finnish Trade Regis-
ness advisors and experts of the Finn- tions alone or together with their spouse. ter and the Finnish Central Tax Admin-
ish Enterprise Agency will help you. Even though the couple set up the busi- istration of commencement of your op-
ness together, the business is registered erations. This is done using the Y-3 form
Factors affecting which form of only in the name of one person. available from the website www.ytj.fi/
enterprise is selected: en/. In addition, a personal data form
• number of people establishing The entrepreneur him/herself makes de- shall be filled in. There is a charge for
the business cisions, and (s)he is fully liable for the registration, and for the year 2017 this
• the need for capital and its business’s commitments (concerning is €110. You may begin operating imme-
availability loans, for example) means all his/her as- diately once you have notified these or-
• responsibilities and decision sets are at risk. Thus, the entrepreneur is ganisations, unless your trade requires a
making personally liable for the business’s loss- licence or you are applying for business
• operational flexibility es, but (s)he will also receive any profits start-up funds.
• continuity of operations made from the business’s operations.
• attitude of finance providers As of the beginning of March 2017, pri-
• profit sharing and covering The firm will not have a Board of Direc- vate entrepreneurs can also submit their
losses tors or a Managing Director, and audits notification of establishment online, see
• taxation. are not required. www.ytj.fi/en/.
The entrepreneur may invest money in Who is a firm suitable for?

the business, but this isn’t compulsory ei- A firm is easy to establish and the sim-
ther. The entrepreneur is not able to pay plest of the forms of enterprise to estab-
a salary to him/herself, to his/her spouse lish. Often, a firm suits a small-scale en-
or to his/her children under the age of 14, trepreneur who is just starting off.
but money may be withdrawn from the
business account as so-called personal PARTNERSHIPS: GENERAL
drawings. Tax is paid annually based on PARTNERSHIP AND LIMITED
the business’s result for the period. PARTNERSHIP
To establish a partnership, you need at
Even though the entrepreneur owns the least two partners (i.e. people). General-
firm, his/her personal finances must be ly, these are natural people, but a partner
kept separate from the business’s financ- can also be a legal person (an enterprise
es with the help of bookkeeping. or organisation). There are two types of
partnership: general partnerships and
Private trader entrepreneurs can be di- limited partnerships.
vided into professionals and traders,
both of whom do work on their own In general partnerships, at least one part-
account. A self-employed person is an ner, and in limited partnerships, at least
entrepreneur who can operate in his/ one general partner must have perma-
her profession without a permanent nent residence, or if the partner is a legal
Establishing a company 43
Guide
person, domicile, in the EEA area. If they is €240 for the year 2017. The partnership
do not, for all partners that are not in the must be reported for registration with-
EEA area, a licence must be sought from in three months from signing the part-
the National Board of Patents and Regis- nership agreement, or else the formation
tration of Finland (www.prh.fi/en). of the partnership expires. A partnership
can be established by registering it in the
The partners invest a contribution in the Trade Register.
partnership, and this will consist of mon-
ey, assets or work. In a general partner- When are partnerships suitable?
ship, a contribution in the form of work Partnerships are suitable for family enter-
from partners will suffice as an invest- prises. You must remember that, in a gen-
ment. In a limited partnership, money eral partnership, the partners and, in a lim-
or other assets are required from a silent ited partnership, the general partners are
partner as a contribution. However, the liable for the partnership’s commitments
law does not specify how large this con- together equally. If one partner makes a
tribution must be. commitment, the others are also liable for
bution of the silent partner in euros. It is it. Therefore, there must be a very high lev-
In a general partnership, all the partners also possible to agree in the partnership el of trust among the partners. However,
are fully liable for the partnership’s com- agreement on, for example, who has the the liability of the partners can be limited
mitments, meaning their personal assets right to represent the partnership, con- in the partnership agreement.
are at risk, and they decide together on veyance of the partnership share, resig-
issues relating to the partnership unless nation from the partnership, distribution LIMITED LIABILITY COMPANY
agreed otherwise. of profit as well as on the manner of ter- (OY)
mination or cancellation of the partner- A limited liability company may be es-
In limited partnerships (ky), there are ship agreement. tablished by one or more people or or-
two kinds of partner: active and silent. ganisations. When the company is being
In a limited partnership, there must be The partners may also draft a separate set up, the founders register all the com-
at least one active and one silent part- partner agreement in writing in connec- pany’s shares. In a private limited liabili-
ner. General partners are fully liable for tion with the founding of the partner- ty company, the share capital must be at
the partnership’s commitments, mean- ship. The partner agreement may contain least €2,500. The Finnish Companies Act
ing their personal assets are at risk, and an agreement on the administration of does not specify anything about the res-
they decide together on issues relating to the partnership, the decisions requiring idence or domicile of the shareholders,
the partnership. unanimity of the partners, the non-com- i.e. the founding shareholders of a lim-
petition clause and the handling of dis- ited liability company may also be from
Silent partners invest money or assets of putes. The agreement also aims at reg- outside the EEA area.
monetary value in the partnership, and ulating the liabilities of the partners for
they receive agreed interest on the earn- the debts and commitments of the part- The shareholders are liable for the com-
ings. A silent partner does not have the nership. Such restriction shall not, how- pany’s commitments only to the extent of
right to participate in the partnership’s ever, be binding on a third party. the capital that they have invested in the
decision-making, and they are not liable company, unless they have guaranteed
for issues relating to the partnership, un- The partner agreement shall not be en- loans on behalf of the company.
less otherwise specified in the articles of closed to the start-up notification. The
association. agreements shall be made with great Issues relating to a limited liability com-
care with the help of a legal expert. pany are decided on by the sharehold-
Establishing a partnership ers. A person who has more shares also
The partners shall draw up a written The partnership agreement must be reg- gets more decision-making power (and
partnership agreement, which, in ac- istered in the Finnish Trade Register and more voting power). A limited liabili-
cordance with the law, shall specify the with the Finnish Central Tax Adminis- ty company must have a board of direc-
trade name of the partnership, the place tration. This is done using the Y2 form. tors that the shareholders appoint. The
of registered office in a Finnish munici- In addition, a personal data form shall board takes care of management of the
pality, the line of business and the part- be filled in. These are available from the company, and it represents the compa-
ners. The partnership agreement of a lim- website, www.ytj.fi/en/. Notification of ny. The board may elect a managing di-
ited partnership shall also state which the partnership must be accompanied rector for the company, who takes care
partners are general partners and which by the original partnership agreement. of its day-to-day management. However,
are silent partners as well as the contri- There is a charge for registration, which the appointment of a managing director
is optional. The managing director shall
be indicated in the Memorandum of As-
sociation, if the limited liability compa-
ny has a managing director.
If the board of a limited liability compa-

ny comprises less than three ordinary
members, at least one deputy member
must also be appointed. At least one of
the board ordinary members and one of
the deputy members (calculated sepa-
rately) must have permanent residence
in the EEA area. If they do not, a licence
must be sought from the National Board
of Patents and Registration of Finland for
all ordinary members or deputy mem-
bers who are from outside the EEA area
(www.prh.fi/en/).
A limited liability company must be reg- the non-cash asset capital contribution
Establishing a limited liability istered with the Finnish Trade Register and on whether the assets had a finan-
company before it becomes legally valid. This is cial value to the company that was at
In order to establish a limited liability done using the Y1 form and its appen- least equivalent to the price. This state-
company, a Memorandum of Associa- dix. In addition, a personal data form ment may be given either by a chartered
tion is created, to which the Articles of shall be filled in. There is a charge for accountant (KHT or HT) or a chartered
Association are appended. The Articles registration, and in 2017, this is €380, auditing firm.
of Association comprise in their minimal €330 online in the Finnish Business In-
form three items: the name of the busi- formation System (BIS). The Trade Regis- If the company has more than one found-
ness, its domicile (municipality) and the ter must be notified within three months ing member, it is worthwhile creating
line of business. The line of business may of signing the Memorandum of Associa- a written shareholders’ agreement. A
be shown as general commercial activ- tion, otherwise the establishment of the shareholders agreement is a contractual
ities, which includes all lawful business company will become null and void. The agreement between the shareholders of
operations (i.e. you do not have to indi- notification of establishment can be sub- the company regulating the mutual rela-
cate a specific line of business). mitted in electronic format at www.ytj. tionships between the shareholders and
fi/en/ or with a paper form. The neces- their rights and obligations in the com-
The Memorandum of Association of a lim- sary forms are available from the website pany.
ited liability company shall always state www.ytj.fi/en/. Notification of founda-
the date of the contract, all shareholders tion must also be accompanied by the The shareholders agreement may pro-
and the quantity of shares subscribed for original Memorandum of Association vide, for example, for the division of
by each shareholder, the price to be paid to and a duplicate copy of the Articles of As- tasks, the restriction of the circle of
the company for each share, the time when sociation, if these do not form part of the shareholders or the arrangement of op-
the shares are to be paid and the members Memorandum of Association. erations of the company. Also the re-
of the Board of Directors of the company. demption of shares in cases, where a
The financial period shall be determined Before registration of a limited liability shareholder conveys them to a third par-
either in the Memorandum of Association company, the share capital must be paid ty, may be agreed upon if the Articles of
or in the Articles of Association. to the bank account of the new compa- Association do not contain a redemption
ny. If shares are paid for using non-cash clause. Also the distribution of profit, the
The Memorandum of Association shall assets, there must be a term in the Mem- non-competition clause as well as what
also state, where necessary, the Man- orandum of Association stating that the happens to shares upon the death of a
aging Director, the members of the Su- share subscriber has the right or duty to shareholder may be agreed upon in the
pervisory Board and the auditors of the pay the subscription price using non- shareholders agreement.
company. The chairman of the Board cash assets. Also, in the Memorandum
of Directors may also be named in the of Association, there must be a descrip- A company may also be a party to the
Memorandum of Association. tion of the non-cash assets. In the Finn- shareholders agreement; the agree-
ish Trade Register, there must be an au- ment may also provide for the mutual
ditor’s statement on the description of relationships between the company and
Guide
the shareholders. In that case, the com- tion share if a member resigns or is dis- riod shall be provided for in the Memo-
pany must also decide on matters sub- missed from the co-operative. randum of Association or in the Rules.
ject to the shareholders agreement in its
appropriate bodies. The members decide on issues relating The Memorandum of Association shall
to the co-operative, and each member state the Managing Director, the mem-
A shareholders agreement should be pre- generally has one vote. The members bers of the Supervisory Board, the au-
pared carefully and prudently. Amend- elect the board of the co-operative. The ditors and the performance auditors if
ing the agreement after the commence- board takes care of management of the such an organ exist in the co-operative.
ment of operations may be very difficult co-operative, and it represents it. The co- The Memorandum of Association may
if disputes have arisen, as an amendment operative may elect a managing director name the Chairman of the Board.
thereto requires a unanimous decision of for the co-operative, who takes care of
all the parties to the agreement. its day-to-day management. However, The internal affairs of a co-operative
the appointment of a managing director should no be included in the rules but
When is a liability company is optional. they should be entered in a separate
suitable? membership agreement. The member-
All types of business are suited to being As an independent legal person, the co- ship agreement may provide, i.a., for the
a limited liability company. operative is liable for its debts. The lia- administration of the co-operative, the
bility of a member of a co-operative is division of tasks, the responsibilities as
The limited liability company can be limited to the amount invested in the well as for the handling of disputes. Use
established by a single person. In this co-operative (participation share). When the help of a legal expert when drafting
case, a second person is required as a borrowing, the members may, where the rules and the member agreement.
deputy member of the board. An advan- necessary, be required to give an abso- The member agreement shall not be en-
tage of limited companies is the limited lute guarantee the same way as share- closed to the start-up notification.
liability, which is restricted to the shareholders of a limited liability company if
holder’s capital holding, unless a guar- other collateral is not sufficient. The co-operative must also be registered
antee has been given on behalf of the in the Finnish Trade Register. Notification
company. The net assets and the surplus belong of the co-operative must be made with-
to the co-operative. The rules may pro- in three months of the Memorandum of
For large enterprises, a public limited li- vide for its distribution and the basis Association being signed, otherwise the
ability company is a suitable form of en- for distribution. It may be, for example, establishment of the co-operative will be-
terprise. For this, the minimum possible a payment of interest on the co-opera- come null and void. This must be done us-
share capital is €80,000. With public lim- tive capital or a refund to the members in ing a Y1 form and its Appendix 2. In addi-
ited companies, their shares are offered proportion to the services used by them. tion, a personal data form must be filled
to the public and traded on the stock However, the main goal is not to produce out. The forms are available at www.ytj.
markets. a surplus. fi/en/. The original Memorandum of As-
sociation and a copy of the rules must be
CO-OPERATIVE Establishing a co-operative enclosed with the notification of estab-
A co-operative is an association, which In order to establish a co-operative, a lishment. There is a charge for registra-
has one or more members. The members Memorandum of Association is created tion, and in 2017, this is €380. A co-opera-
may be private individuals, undertakings to which the Rules of the co-operative tive can be established by registering it in
or other associations. are appended. The rules must specify, as the Trade Register.
a minimum, the name of the co-opera-
Founding of a co-operative does not re- tive, its domicile (municipality), the line For whom is a co-operative
quire a minimum capital. A co-operative of business. Model rules for a co-opera- suitable?
is a flexible form of business where the tive are available in the address perusta- A co-operative is at its best when the
number of members may increase or de- janopas.pellervo.fi. members have genuinely committed to
crease during the operations as required. the goals and are active actors.
The co-operative shall decide on its par- The Memorandum of Association of a co- A co-operative is especially suitable in sit-
ticipation shares in its rules. The partic- operative shall always state the date of the uations where the members change and
ipation share need not have a nominal incorporation, all incorporators and the when there is a need to ensure continuous
value and its subscription price may vary. shares devolving on the incorporators, mutual equality. A co-operative is an asso-
The payment may be made in cash or as the amount payable to the co-operative ciation of members, new members will be
a capital contribution if capital contribu- of a share, the payment period of a share decided on together and the membership
tions are provided for in the rules. The and the members of the Board of Direc- and the voting rights tied thereto cannot
co-operative shall refund the participa- tors of the co-operative. The financial pe- be bought or sold.
A co-operative is also a flexible form of benefit of a foreign organisation or foun- Notification must be given before opera-
business. Matters, rules and tasks can be dation. The name of the branch must in- tions commence. There is a charge for reg-
defined together. Any costs arising from clude the name of the foreign trader in istration, and in the year 2017, this is €380.
work and operations as well as the oper- the registered form together with an ad-
ating facilities may be divided and acqui- dition that indicates it is a branch of- If the foreign organisation or foundation
sitions made in a sensible manner. Each fice. The addition can be, for example, is from outside the EEA area, a licence
member, with his/her own input, can in- “sivuliike Suomessa” (branch in Finland), must be sought from the National Board
fluence both his/her own salary and the “filial i Finland” or “filial”. of Patents and Registration of Finland to
share of the co-operative. establish a branch in Finland (www.prh.
When a branch is established, notification fi/en/).
BRANCH OF A FOREIGN of this must be sent to the Finnish Trade
ENTERPRISE Register. This is done using a Y1 form
A branch of a foreign trader shall mean and its appendix 3. In addition, a per-
the part of a foreign organisation or foun- sonal data form shall be filled in (www.
dation that runs a continuous business ytj.fi/en/). In addition, a personal da-
or trade from a permanent place of busi- ta form shall be filled in. The appendices
ness in Finland in the name and for the to the notification cf. www.prh.fi/en/.
PLEASE NOTE!
Statutory Responsible for
Minimum number Minimum Supreme decision-
decision-making the company’s
of founders capital making body
bodies commitments
Private trader Only the None. The entrepreneur The The entrepreneur
entrepreneur. herself or himself. entrepreneur herself or himself.
The herself or
entrepreneur’s himself.
spouse may also
be involved in the
business.
General Two. No monetary The partners None. The partners (also
partnership investment; together or in the for each other’s
only work input. manner laid commitments).
down in the
partnership
agreement.
Limited Two, of which The silent The general partners None. The general partners
partnership one is the active partner will together or in the (also for each other’s
partner and the have to make manner laid commitments). The
other is the silent a monetary down in the silent partner is only
one. investment or partnership responsible to the
an investment agreement. extent of the capital
in the form of invested.
other assets.
Limited One. €2,500 The shareholders in Board of The shareholders in
companyt the annual general Directors relation to the capital
meeting. The annual with at least they have invested,
general meeting must one ordinary unless they have given
be held within six member and one securities.
months of the end of deputy member.
the accounting period.
Co-operative One. The number None. Changing The members in Board of The members with
of members may capital. the co-operative Directors the capital they have
vary. meeting. The annual with at least invested (usually the
general co-operative one ordinary co-operative payment),
meeting must be member and one unless they have given
held within six deputy member. securities to cover the
months of the end co-operative’s loans.
of the accounting
period.
Guide
Registering a company
FINNISH TRADE REGISTER The name is registered either in the Finn-
The Finnish Trade Register (www.prh. Registration fees for ish language or the Swedish language.
fi/en/ > Trade Register) is the official, businesses in 2017 The name may include, in addition to
public register for information about en- the Finnish- or Swedish-language iden-
terprises. Generally, all businesses must Private trader €110* tifier for the form of enterprise, identifi-
enrol in the Finnish Trade Register. ers in other languages, for example, Ab
General partnership and limited Finntex Oy or Oy Finntex Ltd. The name
The mandatory registration does not ap- partnership €240 may also include parallel business names
ply to private entrepreneurs who do not in different languages, i.e. translations of
practice any business for which a per- Limited liability company, co- the Finnish- or Swedish-language name.
mit/licence is required, who do not have operative, branch, European The possible parallel business names
any business premises outside their own Economic Interest Grouping for a limited liability company must be
home and who do not employ any peo- (EEIG): €380 included in the articles of association.
ple outside their own family. In addition, The parallel business names for a gener-
entrepreneurs who practice agriculture Limited liability company, online al partnership or a limited partnership
or fishing do not have to register in the in the Finnish Business Informa- must be included in the articles of as-
Trade Register. tion System (BIS) €330 sociation, and those for a co-operative
must be included in its regulations.
Registration of a company in the Trade * As of the beginning of March 2017,
private entrepreneurs can also submit
Register is subject to a charge. their notification of establishment on- Auxiliary business name
line. See www.prh.fi/en/. An entrepreneur may carry out part of
With the same declaration, you can also their operations using an auxiliary busi-
enrol in the registers of the Finnish Cen- ness name. This is convenient when the
tral Tax Administration, comprising the same enterprise has operations in com-
register for collection of tax at source, from other names and trademarks that pletely different fields. The industry of the
the register of employers and the register are in the register. Using your own name auxiliary business name must be included
for those liable to VAT. There is no charge or place name in the name of the busi- in the industry of the company, however,
for enrolment in these registers. ness will help ensure that it is individu- meaning that the business done under the
al. Registering the name of the business auxiliary company name may not be the
Business ID gives the exclusive right to that name sole industry of the business.For exam-
The business and organisation ID is a throughout the country, i.e. no-one else ple, the owner of “Jokinen’s florist’s” may
unique ID that the authorities give to may use this name. run cleaning operations under the name
businesses and organisations. The busi- “Näppärä”. There is a charge for registra-
ness ID is provided once the foundation The form of enterprise is also apparent tion of an auxiliary business name, and
of a business is recorded in the Finnish from the name of the business. A private this name can only be used for those ac-
Business Information System www.ytj. trader may use the identifier “tmi” or “to- tivities that it is registered for. Several aux-
fi/en/. A business ID consists of seven iminimi”, but this isn’t mandatory. Limit- iliary business names may be used. How-
numerical digits, a hyphen and a check ed partnerships use the abbreviation “ky”. ever, an auxiliary business name cannot
digit, for example 1234567-8. The busi- The identifier for a limited liability com- be used for the operations of the whole
ness ID is required on invoices and con- pany is “oy” and for a public limited lia- business. Thus, by using auxiliary busi-
tracts, and when using the Finnish Trade bility company, “oyj”. The identifier for a ness names, the same enterprise may
Register or dealing with the Finnish Cen- general partnership is “avoin yhtiö” – the comprise different operations with dif-
tral Tax Administration, among other abbreviation “ay” may not be used. The ferent business names. This can help with
things. name of a co-operative shall include the operations and marketing. However, there
term “osuuskunta”, a part of the term in a will only be one set of accounts and one
Name of the enterprise compound “osuus” or the corresponding business ID for all of the enterprise’s op-
It is essential to choose a good name abbreviation “osk”. The name of a branch erations. Contracts concluded by the en-
for the business. The name must be suf- will include the term “sivuliike Suomessa” terprise cannot be signed using the aux-
ficiently individual. The name can not (branch in Finland), “filial i Finland” (in iliary trade name alone. If the auxiliary
just contain general words or a service Swedish) or “filial”. trade name is used upon signing a con-
description and the names of people or tract, also the actual trade name must be
places. The name must differ sufficiently mentioned.
Line of business
The line of business of an enterprise is
always declared when the enterprise is
registered with the Finnish Trade Regis-
ter and the Finnish Central Tax Admin-
istration. It is also possible to register so-
called “general commercial activities”
with the Finnish Trade Register, meaning
that the business may engage in all kinds
of lawful business activities that are ac-
cordant with good practice. However, it
is advisable to state the line of business
explicitly so that the nature of the busi-
ness’s operations is clear.
It is also possible to include the follow-

ing type of declaration in the Finnish
Trade Register: “yleistoimiala” (gener-
al commercial activities), including re-
pair, servicing and trade of motor vehi-
cles, amongst other things. In this case,
the customers will understand more eas-
ily which areas the business operates in.
However, you must notify the Finnish

Central Tax Administration of your main
line of business. The enterprise may have
only main line of business, and this must
clearly describe what field the enterprise
operates in along with the form of the
operations: for example, repair, servic-
ing and trade of motor vehicles. It is not
possible to record a main line of business
in the register that is too general.
PREPAYMENT REGISTER
Starting up business operations general-
ly requires that the business enrols in the
Prepayment register maintained by the
Finnish Tax Administration (www.tax.
fi). A company that only sells goods is
not obligated to register, but registration
is recommended in case the operations
will be expanded to services. You can en-
rol in the Prepayment register using the responsible persons have no history of company and a co-operative shall request
same form that is used for notifying the neglect of tax. calculation of taxes to be prepaid using a
Finnish Trade Register of your new busi- separate form available in the website of
ness. When a business is in the Prepay- TAX PREPAYMENT the Tax Administration www.tax.fi.
ment register, the business commission- A starting enterprise pays tax prepay-
ing work does not need to withhold tax ments on the basis of the taxable income The Tax Administration shall calculate
from the remuneration paid by it. A busi- estimated by the enterprise for the first the tax prepayment for a new enterprise
ness that is in the Prepayment register financial period. A self-employed per- on the basis of its own estimate and send
takes care of its taxes itself by paying tax son and a partnership may present an the decision on the tax prepayment as
levied in advance. Prepayment registra- estimate of the taxable income in the well as the bank transfer forms thereto.
tion is available if the enterprise or its start-up notification. A limited liability
Guide
It is advisable to follow the income de- tration’s register (www.tax.fi) via their Please note!
velopment and to request adjustment declaration of foundation. At the same
to the prepayments if the estimate dif- time, such businesses also state the date
fers materially from the actual income. of commencement of their operations
If the profit/loss for the year shows that that are subject to VAT. It is possible Registering a new company
the amount of prepaid taxes is too low, it to enrol in the VAT register even when
is possible to pay supplementary prepay- the business is not liable to charge VAT • As a general rule, all
ment of taxes. The tax prepayment and based on the law, for example if sales companies must be registered
the supplementary prepayment shall be for the accounting period are less than in the Trade Register. The
observed in the final taxation for the fi- €10, 000. A business that is in the regis- registration is subject to a
nancial period. ter may deduct the VAT included in the charge.
business’s purchases from the VAT pay-
REGISTER OF EMPLOYERS able on sales. • Registers of the Finnish Tax
The Register of Employers is maintained Administration: advance
by the Finnish Central Tax Administra- A foreign business is subject to VAT in collection register, value added
tion www.tax.fi. Finland if it has a fixed place of business tax register and employer
in Finland. A foreign business is record- register (if necessary). The
The business must enrol in the ed in the register of businesses subject registration is free of charge.
Register of Employers, if it has: to VAT in the same way as Finnish busi-
nesses are. A foreign business may also • Social security codes and
1. at least two permanent employ- apply to be subject to VAT in Finland. In people’s home addresses
ees during the calendar year, or some special situations, a foreign busi- must be submitted to the
2. at least six temporary employ- ness is always liable to charge VAT. Trade Register with a separate
ees at the same time. personal data form. They may
If, in the opinion of the entrepreneur, not be included in the other
If payment of salaries and wages is tem- the business is not subject to VAT, (s)he notification forms.
porary, or these are paid to only one em- should mark a cross on the declaration
ployee, the business does not need to en- of foundation against “Ei katso olevan- • You can register your company
rol in the Register of Employers. sa arvonlisäverovelvollinen” (I do not be- into all the registers with
lieve I am liable to charge VAT) and (s)he the same notification of
VAT REGISTER should explain the reasons for this. establishment form; select
Businesses that are subject to VAT en- the form for your company
rol in the Finnish Central Tax Adminis- form (www.ytj.fi/en). Please
fill in the forms in Finnish or in
Swedish.
Agreements
for a new
company
A
s a general rule, companies can
enter into agreements with the
terms and conditions of their
choice.
However, restrictions on the freedom of

contract are included, for example, in
legislation on labour, consumer protec-
tion and environmental issues.
GENERAL INFORMATION ON
AGREEMENTS
It is recommended that all contracts be
concluded in writing although the law
does not usually require written form
or predetermined form. The contracts
should be drafted so that the terms leave
no room for interpretation or commer-
cial practice. In conflicts of interest, the
text of the contract is deemed decisive. It
is worthwhile to study the contract care-
fully before signing and turn to a legal ex-
pert, where necessary.
cannot solve in negotiations. The choices inspection in the premises together with
Especially when starting a new busi- are handling in a district court or in arbi- the lessor. Any deficiencies and defects
ness relationship, a background check tration. Arbitration is usually a quicker so- shall be recorded at the time. Also any tar-
of the contracting partner should be lution for a dispute than a general court. gets requiring immediate repair and the
made. Credit ratings can be checked repair schedule shall be recorded. If the
from companies selling credit rating da- LEASE OF BUSINESS tenant himself/herself wishes to make re-
ta. Information on the entry of the ser- PREMISES pair and alteration work, they shall also be
vice provider in the Prepayment Register The lease of business premises is one of agreed on as any renovation as well as re-
is available from the BIS (Business Infor- the first contracts of a starting entrepre- pair and alteration work require the per-
mation System) service www.ytj.fi/en. neur because usually operations are commission of the property owner. The distri-
menced in leased premises. The lease of bution of costs arising from the repair and
Before signing, especially when conclud- business premises shall be governed by alteration work should also be agreed on
ing significant contracts and when the the Act on Lease of Business Premises. in this connection.
other contracting party is a legal entity, it Before signing the lease agreement, it is
is important to find out who has compe- necessary to check with the municipal The inspection record shall be dated and
tence and qualifications to represent the building supervision that the premises signed and each party shall get his/her
legal entity. The persons authorized to may be used for the planned business. If own copy which must be kept during the
represent the company can be checked such a check cannot be made for some lease until the final inspection.
from a Trade Register extract. An elec- reason, the lease agreement may be add-
tronic Trade Register extract is available ed with a term relating to the approval of Validity of the agreement
from the PRH pages www.virre.prh.fi. the premises. A lease agreement may be concluded
for a fixed period or until further no-
A contract should always contain a course Inspection of business premises tice. The lease agreement may be made
of action for conflicts, which the parties The tenant should conduct a preliminary in free form but model forms for lease
Guide
agreements are also available and by us- equipment or machine to be acquired and equipment, vehicles and machinery. The
ing one it can be ensured that all mate- leases it further to an enterprise. Owner- object of purchase may be new or used.
rial matters are agreed on. A lease agree- ship of the target remains with the financ-
ment should always be made in writing. ing company. The lessee enterprise pays The expenses, interests and deprecia-
rent items, which are entered as expens- tions relating to the acquisition are de-
If a lease agreement is concluded for a es and are deductible. Thus the own assets ductible in the bookkeeping of the enter-
fixed term, it shall always be made in and guarantees of the enterprise are saved prise. The VAT included in the purchase
writing. If it is not made in writing, it to other acquisitions and current assets. price may be deducted in one go when
shall be deemed to be in force until fur- Leasing agreements may be used by an the acquisition has been made. The loan
ther notice. enterprise to acquire almost all movable period varies between two and five years.
assets from office furniture to production
Each party to the agreement may give no- equipment and vehicles.
tice to terminate a valid non-fixed-term
lease upon expiry of the notice period. The lease period may be optimized in ac-
The statutory notice period shall be three cordance with the economic useful life of
months when the lessor gives notice and the lease target. Usually the duration of
Please note!
one month when the tenant gives notice the leasing agreement is 2 to 5 years.
on the lease agreement. These may be
derogated from by agreement. HIRE PURCHASE AGREEMENT Keep the following in
A hire purchase is a loan-type form of fi- mind before signing an
A fixed term lease agreement shall be nancing of a specific length. In the pur- agreement
binding on the tenant during its validi- chase, a deposit of approximately 30
ty and it can not be terminated by giv- percent is usually paid of the acquisi- • Companies have the freedom
ing notice during the lease period but it tion price including VAT. It can be paid of contract, meaning that they
is terminated upon the end of the dura- in cash or a used machine or equipment can, as a general rule, sign
tion of the lease agreement without sep- may be given in exchange. The seller con- agreements with the terms
arate measures. veys the object of purchase to the buy- and conditions of their choice.
er who pays the purchase price in two
Rent or more installments. The object of pur- • However, the freedom
The rent of business premises may be chase functions as collateral for the loan of contract is limited by
agreed upon freely between the parties in during the financing. legislation in the case of
compliance with the principle of equity. employment contracts,
Rent increase may be bound, for example, The financing is arranged either by the agreements falling under
to the real estate maintenance expense in- seller himself/herself of by a financing the scope of consumer
dex, i.e., the cost of living index. The ex- company, to which the seller transfers the protection and environmental
pense indices may be checked at the web- hire purchase agreement. As a rule, the protection issues.
site of Statistics Finland at www.stat.fi. seller or the financing company retains
ownership of the object of purchase until • All agreements should be
Usually a tenant is liable to put up a se- the purchase price has been fully paid. It made in writing. You should
curity for the lease in favor of the lessor. usually also has the right to repossess the read them thoroughly before
It is usually an amount corresponding to goods if the buyer neglects his/her obliga- signing.
three months’ rent, for example, a secu- tions referred in the agreement.
rity deposit. The use of a rental guarantee • The background of the
is also possible. A hire purchase agreement is governed contracting party, such as
by the Act on Hire Purchase. In accord- their credit status and right
The tenant should establish informa- ance with the Act, a hire purchase agree- to sign agreements,should
tion and the right to sign of his/her con- ment shall always be made in writing. always be checked in advance.
tracting partner prior to concluding the
agreement. It is customary that (s)he les- Hire purchase is a suitable form of fi- • Disputes will be solved in
sor acquires credit data of his/her future nancing when an enterprise wants pay- arbitration proceedings or
tenant. ment time for an investment and be- by a public court of law. The
lieves that the equipment to be acquired agreement text determines
LEASING AGREEMENT has a long use value. An enterprise may this.
Leasing is a long-term lease of movable use hire purchase to finance movable
fixed asset. A financing company buys the property, such as, inter alia, transport
Knowledge
adds security
– protection
brings a
competitive
advantage
TRADE NAME
INDIVIDUALISES YOUR
BUSINESS
A business is known for its name and
therefore it is worthwhile to plan the
name with care.
When you have decided on a suitable

name, you should check before submit-
ting the registration application to the
Trade Register that the name is not al-
ready used by another company as a
business name, trademark or domain
name.
In the name service of the Nation-

al Board of Patents and Registration of
Finland (nimipalvelu.prh.fi), you can
study whether the name you are think-
ing about for your company can be regis-
tered. The service is offered free of charge
and it is open 24/7.
The National Board of Patents and Regis-

tration will not study whether the name own expertise, business idea and out- ment of the core expertise forms a good
you propose can be registered until the come of your product development so foundation for the decisions on protec-
processing of your notification has start- that the competitors cannot benefit at tion.
ed. your cost without your permission.
If your business idea includes technical
You can check from the website of the The basic idea of immaterial legislation solutions which you want to protect, do
Finnish Communications Regulatory Au- is to provide protection for the fruits of not publish them before discussing with
thority (FICORA) at www.viestintavi- intellectual work. Each business has thus an expert. The publication will prevent
rasto.fi/en/ whether the domain name possibilities to utilise the existing system you, for example, from obtaining patent
you want is available. and find the means of protection already protection.
when planning the business operations.
PROTECT THE CORE A patent, trademark, utility model and TRADEMARK DISTINGUISHES
EXPERTISE OF YOUR design rights bring competitive advan- YOUR PRODUCT ON THE
BUSINESS tage when used together and separate- MARKET
It is easy to copy ideas. Therefore it is im- ly. A written plan based on the business Trademarks hold the central position in
portant to plan how to best protect your strategy of the company for the manage- the marketing strategies of businesses
Guide
PLEASE NOTE!
Form of protection Usage Validity
Patent Protects a product, equipment or method. 20 yrs, in some cases 25 yrs.
Utility model Protects a product or equipment. 10 yrs (4+4+2).
Trademark Distinguishability on the market. Perpetual, renewal at 10-year intervals.
Design right Protects the design of a product. 25 yrs (5+5+5+5+5).
Trade name Protects the name of the business. Perpetual if business in operation.
Copyright Protects an intellectual work. Lifetime + 70 yrs.
Trade secret Protects information of economic significance. Until published.
because, as a result of trademarks, the ple. The Finnish country code is .fi (other INFORMATION
businesses and their products can be dis- available options include .com, .net and ON COMPETITIVE
tinguished from the competitors. .org, for example). A domain name can ENVIRONMENT
contain letters or numbers, or a combi- When planning a business, the free-of-
Trademarks are thus the basis for build- nation of the two: for example, in www. charge databases of the National Board
ing a brand. uusyrityskeskus.fi, the domain name is of Patents and Registration in Finland
“uusyrityskeskus”. (www.prh.fi/en/) offer an easy and
You should protect your trademarks by swift way to check the industrial rights
applying for their registration from the The domain name need not be the same of other actors: trade names, trademarks,
National Board of Patents and Registra- as the company name; instead, it can be design rights, utility models and patents.
tion. When you register a trademark, you an abbreviation that describes the prod- There you can check inter alia where and
will have an exclusive right to use it as ucts sold which the customers will eas- what has been protected, is the protec-
the identification of your products and ily remember, for example. The domain tion still in force, in other words, are
services. name may not infringe any protected there any obstacles for the manufacture
names or trademarks, however. The us- or marketing of your product or service
A trademark can be a word, a pattern or ers of .fi domain names are obligated to or is the solution invented by you brand
a combination of the two. It can also be ensure from the name and trademark new and possibly patentable.
a slogan, a combination of letters or a registers that there are no obstacles for
sound, or any other symbol that can be registration of the domain name.
represented in graphic format.
A good domain name is part of the com-
A trademark granted in Finland will pro- pany’s brand. It is the same as the com-
tect your products only in Finland, how- pany’s registered company name, auxil-
ever. If you want to protect your products iary company name or trademark, and it
abroad, you can apply for the protection cannot be confused with any other do-
using the national or international sys- main name. You can apply for a .fi do-
tems, such as an international registra- main name via a domain name broker. A
tion by virtue of the Madrid Agreement list of companies that practice domain
or the EU trademark registration system name brokerage can be found on the
that covers the EU. For additional infor- website of the Finnish Communications
mation on how to apply for trademarks, Regulatory Authority (FICORA). Usually,
please see www.prh.fi/en/. the domain name broker also offers oth-
er services for the domain name, such as
DOMAIN NAME WILL BRING email, a website or domain name servers.
YOUR BUSINESS WITHIN THE For more information, please see www.
REACH OF CUSTOMERS viestintavirasto.fi/en/> FI-domain.
A domain name is the verbal form of an
IP address. The domain name is used by
websites and email addresses, for exam-
Starting the Cafe Il Mondo
(Nebes Oy)
business • Mahmut Tekes

established café-
restaurant Café Il
Mondo (Nebes Oy) in
operations Hämeenlinna in 2009

via the Häme Finnish
Enterprise Agency. Now
there is another Café
”If you aim higher and take Il Mondo in Lahti. For
risks, you will succeed sooner Mahmut, who grew
up in an entrepreneur
or later.”
family, becoming an
Mahmut Tekes entrepreneur was a
natural choice.
Read Mahmut’s
on our website at
When you are starting your business operations,

you must take out the statutory self-employed
person’s pension insurance (YEL). An entrepreneur’s
unemployment insurance policy is recommended
but not mandatory.
Guide
Starting the business operations

Actions
Arrange the bookkeeping. Take the necessary optional insur- General partnership and limited
Choose your accounting firm. ances, such as the self-employed partnership
person’s voluntary insurance cover- Application for prepayment and for
Take entrepreurs’ pension insurance ing the working hours, legal expens- change in withholding tax percent-
YEL within six months from the comes insurance and personal liability in- age VEROH 5010e or the e-Service
mencement of the business opera- surance. “Tax Card Online 2017”.
tions.
File your application for inclusion Limited liability company
Join an entrepreneurs’ unemploy- in the advance tax register with the Income tax prepayment applica-
ment fund within three months from Tax Administration (unless you al- tion form/corporate taxpayer VEROH
the commencement of the opera- ready did this with the notification of 5017e.
tions. establishment form).
Co-operative
Arrange your (entrepreneurs’) occu- Private trader Income tax prepayment applica-
pational health care (voluntary). Application for prepayment and for tion form/corporate taxpayer VEROH
change in withholding tax percent- 5017e.
age VEROH 5010e or the e-Service
“Tax Card Online 2017”.
56 Starting the business operations

Insurance
ENTREPRENEUR’S PENSION or employees’ pension insurance. Business-interruption insurance
INSURANCE (YEL) • the aim is to safeguard against
The only form of insurance that entrepre- People between the ages of 18 and 67 who a loss of income arising from
neurs must take is entrepreneurs’ pen- are entrepreneurs in Finland are included interruptions to the business.
sion insurance (i.e. YEL insurance). This is in the scope of the YEL insurance scheme.
available from pension insurance compa- The entrepreneurship in Finland must last Personal liability insurance
nies. An entrepreneur shall be paid old-age for an uninterrupted period of at least • compensates, with certain
pension and disability pension as well as four months. The estimated earned in- conditions, losses caused to a
rehabilitation allowance based on the Self- come must be at least €7,645.25 per year third party as well as rectification
Employed Persons’ Pensions Act. The en- (2017 figure). The YEL insurance premi- of the loss and any legal expenses
trepreneur’s work income shall also form um is 24.10 % of the YEL earned income • often a customer, for example in the
the basis for all allowances payable by Ke- for entrepreneurs between the ages of 18 construction and cleaning sectors,
la (the Social Insurance Institution of Fin- and 52 or over the age of 62 and 25.60 % will require that the supplier has
land), such as the sickness allowance and of the YEL income for entrepreneurs be- personal liability insurance.
maternity and parental allowances. The tween the ages of 53 and 62. A new entre-
YEL work income must match that sala- preneur will receive a discount of 22 % for Legal-expenses insurance
ry that should be paid to professional indi- the first 48 months. Thus, the insurance • covers legal expenses that may
viduals for similar work. Also, the entrepre- premium for new entrepreneurs between arise from, for example
neur’s unemployment-fund membership the ages of 18 and 52 and over the age » supply agreements, sales
fee and any earnings-linked daily allowance of 62 is 18.798 %, and for new entrepre- contracts or piecework
are determined on the basis of YEL work in- neurs between the ages of 53 and 62 it is contracts
come. YEL insurance also affects depend- 19.968 % of the YEL earned income. » disagreements on the validity of
ents’ pension security, which is paid to rel- balances payable or receivable
atives after the death of an entrepreneur. The insurance premiums can be paid 1, » disputes on dismissal of staff or
2, 3, 4, 6 or 12 times per year. wages and salaries
YEL insurance must be taken from a pen- » rentalagreement relationships.
sion insurance company at the latest when OPTIONAL INSURANCE
six months have elapsed from the com- Optional insurance includes the follow- It is also good to insure property and
mencement of the business operations. ing, among others business premises against theft, bur-
glaries, fire and water damage. Ask for
Just owning a business does not entitle you The entrepreneur’s voluntary quotes from various insurance compa-
to a self-employed person’s pension. In- accident insurance of working nies, thoroughly familiarise yourself with
stead, the pension insurance requires that hours the terms of their policies and only then
you actually work as an entrepreneur. Al- • a leisure-time accident insurance make a final decision on what insurance
so, the status of ownership and the differ- may be added you will take.
ent forms of enterprise impact on whether • this is a deductible cost for the
the entrepreneur must take YEL insurance business.
YEL Entrepreneur’s pension insurance A person working in a

managerial position who alone owns
more than 30 % or, together with his/her
family, more than 50 % of the shares or
Active partner votes (or of shares of a co-operative)
Sole trader General Limited partnership Limited company (Oy)
partnership (Ky)
/ firm (Tmi) (Co-operative (Osuuskunta)
Silent partner A person working in a managerial position
who is paid salary who alone owns 30 % or less and,
together with his/her family, 50 % or less
of the shares or votes (or of shares of a
co-operative) as well as a shareholder
(or a member) in a non-managerial
TyEL Employee’s pension insurance position
Starting the business operations 57

Guide
Entrepreneur’s unemployment benefit

WHO IS AN ENTREPRENEUR
IN TERMS OF
UNEMPLOYMENT SECURITY?
An entrepreneur is considered to be in-
cluded in the scope of unemployment se-
curity if they employ themselves in such a
manner that the earned income on which
the pension insurance scheme is based
(the YEL, the agricultural entrepreneur in-
surance or MYEL, or the employee pension
insurance in the case of a family member
of an entrepreneur/a part owner of the
company) is at least €12,564 per year.
If the person’s main occupation is paid

labour and the entrepreneurship is part-
time, they should usually take out unem-
ployment insurance through an unem-
ployment fund for salaried employees.
In terms of unemployment
security,
• a person who is obligated
to take out YEL or MYEL is
considered an entrepreneur
(excluding grant recipients).
A part-owner of an enterprise
and a family member of an
entrepreneur insured under
TyEL shall also be deemed an
entrepreneur if (s)he
• works in a senior position
(Managing Director or a
member of the Board of
Directors) for a company of
which (s)he holds at least 15
% or of which his/her family
members or (s)he together
with his/her family members
holds at least 30 % or works Indirect ownership through another is based on an annual income of at least
as an employee for a company company is taken into account if the per- €12,564, may join an unemployment
of which (s)he alone, his/ son owns, alone or together with a fam- fund for entrepreneurs.
her family members or them ily member, at least 50 % of the interme-
together hold at least 50 % of diary company. A full-time entrepreneur should not re-
the company. main in an unemployment fund for sala-
• A spouse (including a common- EARNINGS-RELATED DAILY ried employees because the membership
law one), a child or a parent ALLOWANCE FOR FUND will not accrue their right to receive un-
of the entrepreneur who lives MEMBERS employment benefit; furthermore, their
in the same household as the An entrepreneur, who resides perma- already earned rights will expire when
entrepreneur is considered a nently in Finland and whose statutory they have been an entrepreneur for more
family member. pension insurance (YEL, MYEL, TyEL) than 18 months.

Membership of an unemployment fund
is not mandatory. There are two entre-
Entrepreneurs who are not members of
a fund may apply for an unemployment
Amount of the
preneurs’ unemployment funds, the Un- allowance from Kela. In that case, the al- daily allowance of
employment Fund for Entrepreneurs and lowance is the size of a basic allowance.
the Self-Employed (AYT, www.ayt.fi/en) an entrepreneur
FROM EMPLOYEE
and the Finnish Entrepreneurs’ Unem-
ployment Fund (SYT, www.syt.fi). TO ENTREPRENEUR-
shall be determined
UNINTERRUPTED on the basis of
The amount of the daily allowance of an UNEMPLOYMENT SECURITY
entrepreneur shall be determined on the AND RIGHT TO POST the work income
basis of the work income chosen upon PROTECTION
when joining a fund in accordance with A precondition for entitlement to earn-
chosen upon when
the level of insurance chosen. The insur- ings-related daily allowance is the fulfill- joining a fund in
ance level of the fund may, however, not ment of the entrepreneur’s employment
exceed the annual income for the retire- condition. accordance with the
ment pension insurance.
A member of an employees’ fund has the
level of insurance
Check the size of the membership fee in right to uninterrupted unemployment chosen.
the websites of funds (ayt.fi/en/, www. security if (s)he transfers into an entre-
syt.fi). The membership fees are deduct- preneurs’ unemployment fund within
ible in personal taxation. three months from the start of the en-
trepreneurship. Thus the entrepreneur’s

Guide
FULFILLMENT OF THE
EMPLOYMENT CONDITION
The employment condition shall be ful-
filled when the entrepreneur has been a
paying member of a fund for a period of
at least 15 months.
In order for the period of membership

to be included in the employment
condition, the entrepreneurship
shall, in accordance with the law, be
relevant in scope. The activities shall
be deemed relevant in scope when
the annual income forming the basis
for the statutory pension insurance of
the entrepreneur (the confirmed work
income of those insured under YEL) is
at least €12,564. The pension insurance
contributions must also be paid.
THE RIGHT TO
UNEMPLOYMENT BENEFIT
An entrepreneur is entitled to daily al-
lowance when (s)he has fulfilled the em-
ployment condition of an entrepreneur
and verifiably terminated his/her entre-
preneurial activity. The entrepreneurial
activity shall be deemed fully terminat-
ed if the enterprise has been placed in
bankruptcy or liquidation or if an agree-
ment has been concluded between the
partners on the dissolution thereof or if
it is otherwise clear that the production
and financial activities of the enterprise
have ended.
The entrepreneurial activity shall

usually be deemed terminated
• when the production and
financial activities of the
enterprise have ended and
• the entrepreneur has given up
his/her YEL or MYEL insurance
as well as
• filed a notification with the Tax
15-month employment condition, which preceding entrepreneurship if the entre- Authorities
_MG_6162
is a precondition for entitlement to earn- preneurial activity is terminated within - for removing the enterprise
ings-related daily allowance, starts to ac- the post-protection time. The post-pro- from the prepayment register
crue immediately. tection time of a wage-earner transfer- - for removing the enterprise
ring into entrepreneurship is usually 18 from the employer register and
A wage-earner who becomes an entre- months from the commencement of en- - for removing the enterprise
preneur shall usually also have the right trepreneurship.The right to employee- from the VAT register or
to post-protection time. This means en- fund based daily allowance ends when interrupting its VAT liability.
titlement to daily allowance on the ba- the entrepreneur’s 15-month employ-
sis of the earnings from employment ment condition has been fulfilled.

Please note!
Entrepreneur is An entrepreneur who has become unem-
ployed shall report to the Employment
entitled to daily and Economic Development Office (TE
Issues to be kept in mind
allowance when she Office) as an unemployed jobseeker . The
local employment authority shall submit about an entrepreneur’s
or he has fulfilled to the unemployment fund a statement unemployment security
of the unemployment of the entrepre-
the employment neur. The fund may not make a decision • You must be a member
condition of an derogating from the statement of the TE

Office.
of an entrepreneurs’
unemployment fund in order
entrepreneur to receive earnings-related
PART-TIME ENTREPRENEUR unemployment allowance.
and verifiably A person who is a part-time entrepre-
terminated his or neur or who is an entrepreneur for a
maximum of two weeks may be entitled
• Your unemployment security
will remain in force without
her entrepreneurial to receive adjusted unemployment bene- interruptions if you transfer
fit. The income from the business will be from an unemployment
activity. taken into account in the amount of the fund for salaried employees
daily allowance. to an entrepreneurs’
unemployment fund within
An entrepreneur may receive the daily al- A member of the fund may be entitled to three months after having
lowance even if the enterprise remained adjusted daily allowance if (s)he has met started your business.
in the Trade Register as long as the pre- the employment and membership con-
conditions referred to above are met ditions. In addition, the applicant must • The amount of the
register as an unemployed job seeker earnings-related
with the TE office, be able-bodied and unemployment allowance
The business operations of a available at the labour market. for an entrepreneur will be
private entrepreneur shall be determined based on the
deemed terminated also when For further information, please contact insurance level they choose
• the production and financial the local TE Office, see www.te-servic- when joining the fund, but it
activities have ended in es.fi. may not exceed the annual
accordance with a notification income used as the basis for
by a job-seeker deemed reliable the YEL. The income must be
or if it is otherwise clear that the a minimum of €12,564 per
activities will not continue and year, however.
• the person has given up any
pension insurance under YEL or
MYEL.
The daily allowance shall be paid

without terminating the entrepre-
neurial activity
• if the work capacity of
the person has decreased
permanently and materially or
• if the activity is considered
seasonal due to natural
conditions or
• if the entrepreneur is a person
comparable to a wage-
earner and working for few
clients without a fixed place
of purchase or sales or a
corresponding place of business
for the entrepreneurial activity.

Guide
To-do list for a new entrepreneur

Business plan Agreements
• Written business plan • Memorandum of association (mandatory)
• Necessary calculations • Other agreements related to the establishment (such
as partner agreement, shareholders’ agreement or
Done ¨ membership agreement)
• Any other necessary agreements (lease for business
premises, delivery agreements, leasing agreement,
Assesment of Profitability employment contracts)
• Fixed costs • Always read the agreements before signing to make
• Variable costs sure that you know what you are promising.
• Personal earnings
• Gross margin % Done ¨
• Critical profitability point (= the sales volume at which
all costs will be covered and the company will not
make any profit or loss) Registration to the Trade Register
• Not before you have received the decision on your
Done ¨ start-up grant
• If you are establishing a limited liability company, the
share capital must be paid before registration.
Surveying the markets • See www.ytj.fi/en/.
• Demand
• Competition and competitors Done ¨
• Price level
• How unique the product/service is when compared to
the competition Licences
• Advertising • Disclosure /registration obligation
• Requirement of licence
Done ¨
Done ¨
Start-up grant
• Application for a start-up grant to the TE Office Business premises
• Certificate of tax liability • Lease or ownership
• Business plan and calculations • Location, location and, once more, location
• The statement procedure with the Enterprise Agency • Suitability/ possible inspections of the premises by
the authorities
Done ¨
Done ¨
Financing
• Capital requirements (investments/working capital) Money transactions
• Self-financing of investments • Opening of an account
• Finnvera/bank/other outside investor • Payment terminal
• Support possibilities • Invoice templates
• Guarantees
Done ¨
Done ¨
Accounting
• Single-entry bookkeeping
• Double-entry bookkeeping
• Buy the service e.g. from an accounting agency unless
you are an accounting professional
Done ¨

Taxation Personnel
• Registration at the VAT register • Registration as a regular employer in the Tax
• Registration in Prepayment register Administration's Employer Register
• Tax prepayment • Obligations (collective agreements, Employment
• Appointment with an Enterprise Agency tax Contracts Act, Working Hours Act, Annual Holidays
consultant Act…)
• Costs for the company ( wages + fringe benefits)
Done ¨ • Possibilities for a pay subsidy
Done ¨
Insurance
• Basis for the self-employment person´s pension
insurance (YEL) Meetings with experts
• Accident insurance (not mandatory but • Bank
recommended) • Insurance company
• Liability insurance/legal expenses insurance • Accounting firm
• Property insurance • Marketing
• Other insurance • Others
• Offers from several insurance companies
Done ¨
Done ¨
Entrepreneur’s support network
Unemployment security • Entrepreneur networks
• Entrepreneur association or organisation of your own
• transfer from an employees’ unemployment fund to industry
the unemployment fund for entrepreneurs as soon as
possible after starting entrepreneurial activities (at the Done ¨
latest within three months from the start).
• SYT (www.syt.fi) / AYT (www.ayt.fi/en/)
Join trade organisations
Done ¨ • Entrepreneur organisations, www.yrittajat.fi/en/
• Industrial federations, www.ek.fi/en/, www.mtk.fi,
www.yrittajat.fi/en/
• Chambers of commerce, www.kauppakamari.fi/en/
• Employer organizations, www.ek.fi/en/
Done ¨
Guide
Ten instructions to success
3
The business can only
work when supported by
products for which there
is a big enough market.
1
You must be familiar
with the line of business
in which you intend to
establish an enterprise. Don't
forget to monitor changes in
your industry.
4
Look after your
image and your
intellectual
2
property rights.
You must study entrepreneurship.
The Employment and Economic
Development Offices (TE offices)
and the Finnish Enterprise Agencies,
for example, organise courses for
entrepreneurs.
Also you can get help from business
advisory experts.

5
Marketing alone is not
enough: you must
also know how to sell
your products.
Take the initiative and try
to address your customers’
changing needs.
10 Look after your own

well-being.
6
As an entrepreneur, you can
Always do your work
arrange occupational healthcare
as agreed with the
for yourself.
customer, or do it
The Social Insurance Institution
even better.
of Finland (Kela) will reimburse
the entrepreneur for any
necessary and reasonable costs
arising from occupational
healthcare.
8
Pay special
9
attention to your
best customers. Continually develop
your business
7
operations.
Pay attention to your
Eliminate products that is
commitments as
not worth selling.
prescribed by the law.
Try to reduce your costs and
Pay taxes and official
increase your visibility.
payments by the due date,
and submit returns to
authorities on time.

Guide
Important links On the website of the Finnish Tax Administration, you will find in-
formation on taxation and other obligations of new businesses and
entrepreneurs. The most important information has been com-
The National Board of Patents and Registration of Finland serves
piled in the subpages of the company forms in accordance with the
you in all issues pertaining to the Trade Register, housing compa-
lifecycle of a company. The website includes information on, for
nies, business mortgages, auditing regulation, associations and
example, registration into the different registers, a company’s em-
the register of associations. The National Board of Patents and
ployer obligations, notifications, taxes and payments.
Registration studies and grants trademarks, design copyrights,
patents and utility patents. Furthermore, it offers advice, infor-
mation, research and training services for the different stages of a www.tax.fi
company’s lifecycle.
The Team Finland network brings together all state-funded actors
www.prh.fi/en/ and the services they offer to promote the internationalization of
Finnish enterprises, to attract investments to Finland, and to pro-
The experts at the local Centre for Economic Development, Trans- mote Finland’s country brand. Information, tools and expert assis-
port and the Environment (ELY Centre) will assist you in funding tance are available.
and development services and other public services to businesses.
www.ely-keskus.fi/en/ team.finland.fi/en/
Tekes provides funding especially to SMEs seeking material growth

A person interested in entrepreneurship and an entrepreneur start-
in the international markets and which have the ability and will to
ing a business may, under certain conditions, receive a startup
succeed. Tekes provides support for the growth of the enterprise
grant. With certain prerequisites, a person who is becoming an en-
during its entire life cycle together with the Team Finland partners.
trepreneur may receive a start-up grant during the startup and es-
tablishment stage of their full-time business. TE Offices arrange in-
formation events and themed events for people who are thinking www.tekes.fi/en/
about starting a business.
ProAgria comprises services which you need to attain
www.te-services.fi the goals of your business, to improve its profitability
and to develop its competitiveness. The services are
The Enterprise Finland on-line services offer free information and meant for all rural entrepreneurs.
services for launching, expanding, developing and internationalising
a business. The My Enterprise Finland (www.enterprisefinland.fi) of www.proagria.fi
a registered user of the Enterprise Finland on-line services is an elec-
tronic workspace based on the user’s profile for attending to mat-
ters regarding entrepreneurial activities. You can search for forms Financial Advice (Talousapu) is a confidential and free telephone
under the heading ‘Forms and e-services’ by entering a search word, and web service for entrepreneurs. Experts in the
organisation name, form name or form ID in the search field. development and reorganisation of business
The chat service of Enterprise Finland offers advice on weekdays activities are at your service.
from 1 pm to 4 pm.
www.yrityssuomi.fi/en/
www.enterprisefinland.fi
In the Company Search service on the joint Business Information
Finnvera is a specialized financing company owned by the State System pages of the Finnish Patent and Registration Office and the
of Finland. It offers to its customers, inter alia, loans, guarantees Tax Authorities you can search basic information on all companies
and capital investments. Finnvera provides financing for enterpris- that have a Business ID. The search criterion can be either the busi-
es with a good business idea and the potential for successful business ID or the company name. Furthermore, you can use the Busi-
ness. ness Information System (YTJ) to submit electronic change no-
tifications and the notification of the establishment of a limited
www.finnvera.fi liability company. As of the beginning of March 2017, private entre-
preneurs can also submit their notification of establishment online.
Finpro helps Finnish SMEs go international, encourages foreign di-
rect investment in Finland and promotes travel to Finland. Partners www.ytj.fi/en/
at Finpro are Export Finland, Visit Finland and Invest in Finland. Fin-
pro is a public organisation whose 300 experts work at 36 offices in
31 countries and six offices in Finland. Yrityspörssi is a nation-wide service of the Federation of Finnish
FinPro – Growth in Finland Enterprises (Suomen Yrittäjät) for the sellers and buyers of enter-
prises.
www.finpro.fi/en/
www.yritysporssi.fi
Business plans in the web:
www.enterprisefinland.fi
www.business-plan.fi
www.onnistuyrittajana.fi

Running a company
To successfully run a
company, you must properly
arrange invoicing and
bookkeeping, and take
care of all the statutory
obligations.
”If you are taking care of

the administration of your
business alone, you should
suddenly know everything
about everything.”
Ville Moilanen
Hetitec Oy
• Ville Moilanen
established Hetitec Oy,
a company that sells
3D printouts, in 2013
via the Tampere Region
Finnish Enterprise
Agency. Established
in Valkeakoski, the
company is the first one
in the Nordic countries
to offer sand mould
printing services.
Read Ville’s
entrepreneurship story on
our website at

Guide
Invoicing and debt collection
U
nless your company will do busi- Send the invoice in the form the invoice is drafted well, the customer
ness with cash only, you must de- requested by the customer. can easily check that (s)he has been in-
cide how you will arrange the in- As an electronic invoice, if the customer voiced as agreed upon.
voicing. You must also take care of debt so wishes, by e-mail, if so agreed upon,
collection, unless you decide to sell your or as a traditional paper invoice, if you General information that must be
invoices to a financing company. are not sure how the customer wishes to included on invoices according to
be invoiced. Remember to send also in- the Value Added Tax Act:
INVOICING voice appendices. • Invoice date
When a customer orders a product, it • Consecutive identification num-
may take 1–5 days, depending on the Before sending an invoice, you must ber
company, before the product is deliv- check that all the requirements includ- • Seller’s VAT number (business
ered to the customer. Often the invoice ed in the Value Added Tax Act on invoice ID)
for the product is sent 1–5 days from the markings are met. and that the customer • Buyer’s VAT number in the case
delivery. information and the invoice data are cor- of reverse charge procedure or
rect. The customer is not obliged to pay intra-community supply
In business-to-business sales, the pay- the invoice if the information is faulty. • Names and addresses of seller
ment period may be agreed on. Usually and buyer
payment periods from 14 to 30 days are Remember to file the invoices. • Number and type of goods or
applied. In accordance with legislation, The entrepreneur is liable for the keeping scope and nature of services
the payment period may exceed 30 days and storing of the accounting records. • Delivery date of the goods, date
only if expressly agreed upon. In other The accounting records shall be stored on which the service was per-
words, even in the best-case scenario, it for six years from the end of the calendar formed or advance payment
will take several weeks, even over a month year during which the financial period date
from the order, before the money reaches ends. If the financial period has ended, • Tax base for each tax rate, unit
the bank account of the company. for example, on 30 April 2017, the records prices without VAT, refunds and
must be stored until 31 December 2023. discounts (unless included in
Try to invoice ready products or the unit price)
services as soon as possible. Never alter an invoice already • Tax rate
For invoicing, enter the invoice in the sent. • VAT to be paid
bookkeeping as an offer, a sales order or If a mistake is detected in an invoice al- • Justification for exemption from
as a draft invoice as soon as possible. A ready sent to the customer, the invoice taxes or reverse charge proce-
one-week delay in invoicing may result in shall be credited and a new invoice draft- dure
a one-week delay in getting the payment. ed to replace it. You may alter the invoice • In the case of an amended in-
Swift invoicing gives the customer a pos- up to the moment when you forward it to voice, a reference to the previ-
itive indication of professionalism. your customer and your bookkeeping. If ous invoice.
example
Example of the schedule according to which the business gets money from its sales:
Customer Business sends Business sends Customer pays Money

orders the the product to an invoice to 25.10 arrives in the
product the customer the customer business’s
15.9. 20.9. 25.9. account
26.10.
68 Running a company
Less information is required if Penalty interest the website of the Association of Finn-
• Total sum of the invoice, includ- According to the Interest Act, penalty ish Debt Collection Agencies at www.
ing VAT, is a maximum of €400 interest may be charged from a debtor suomenperimistoimistojenliitto.fi.
• The simplified requirements al- starting from the due date of the invoice.
so concern retail sales and oth-
er similar sales where almost all If the debtor is a consumer customer, the Please note!
the buyers are private individu- penalty interest may be at the most the
als. reference rate that is set by the Bank of
• The invoice refers to catering Finland every six months plus 7 % and if Don’t forget debt
service or passenger transport, the debtor is a company, the penalty in- collection
but not any services to be re- terest may be the reference rate plus 8 %.
sold • Follow the regulations of the
• It is a receipt printed by a park- If the debtor is a company, the payment Consumer Protection Act
ing meter or a similar device. must be available to the recipient at the and the Debt Collection Act
latest on the due date for the debtor to when sending invoices and
In such cases, the following infor- avoid the penalty interest. collecting your receivables
mation is required: from consumer customers.
• Invoice date The Consumer Protection Act states that
• Seller’s VAT number and busi- it is sufficient if the consumer pays the • Sign an agreement with a
ness ID invoice on the due date. debt collection agency early
• Number and type of goods or on, unless your company
scope and nature of services Using a debt collection agency will be only doing business
• VAT to be paid for each tax rate If your customer has not paid their in- on cash.
or tax base for each tax rate. voice even after you have sent them a re-
minder, you should transfer the invoice • Compare the prices and
DEBT COLLECTION to a debt collection agency. services of several debt
Debt collection is a means to obtain collection agencies.
amounts due to the company. You can sell your receivables to a financ-
ing company, in which case you will no
Determining invoice due date longer have to send payment reminders
If your customer fails to pay their in- and collect your receivables. If you do
voice, you must send them a payment this, the financing company will pay you
reminder. If the recipient of the invoice the total sum of your receivables minus
is a consumer, there must be a period of a financing provision, usually in one to
a minimum of 14 days between the date two days. This will also reduce your cred-
the invoice is sent and the due date. If it risk and improve your liquidity.
the invoice has not been paid, a remind-
er subject to a charge may be sent to a Most debt collection agencies sign an-
consumer at the earliest 14 days after the nual agreements that cover, for example,
original due date. the sending of collection letters and draft
debt collection between companies. The
There are no time limits for debt collec- client company must pay an annual fee,
tion between companies. but the debtors will pay the debt collec-
tion agency’s actual costs. If the debt col-
If your customer fails to pay their invoice, lection fails, the client company will have
you must send them a payment remind- to pay an agreed fee.
er. Usually, businesses send one or two
payment reminders before transferring Professional debt collection is subject to
the invoice to a debt collection company. a licence in Finland. The Regional State
Penalty interest may be charged starting Administrative Agency of Southern Fin-
from the due date. land grants the licences for debt col-
lection in the whole of Finland. A list of
licensed debt collection agencies is avail-
able at www.avi.fi/en/. Reliable debt
collection agencies are also listed on
Running a company 69
Guide
Bookkeeping and financial statements

for the company
A
ccording to the Finnish Account- accounting period, is based on corrob- preneur and the firm of accountants use
ing Act, all businesses have a le- orative documents. These include sales their own softwares, the bookkeeping
gal obligation to keep accounts. invoices, purchase invoices, payslips material shall be sent as receipt copies
It is worthwhile for entrepreneurs to out- and bank statements. The accounting or as summary reports. The chosen man-
source their bookkeeping, i.e. to pay for a records may be either paper or electron- ner shall also define the responsibilities
service from an accounting firm, so that ic records. of the entrepreneur and the accounting
they can concentrate on earning their firm of the final bookkeeping.
income. When choosing an accounting The firm of accountants usually attends
firm, you should also keep in mind the to bookkeeping and payroll manage- A self-employed person and a private
fact that you carry the ultimate respon- ment. The tasks of the entrepreneur shall trader shall not be liable to apply double
sibility for the correctness of the books, include the writing of the sales invoices entry bookkeeping if no more than one of
even if they were done by an accounting and the payment of the purchase invoic- the preconditions is met during both the
firm. Therefore, you must understand at es as well as the monitoring of the ac- financial period last ended and the pre-
least the basic concepts of the financial counts receivable. Even these tasks are ceding financial period:
management of a company. more and more often outsourced to an
accounting firm. The entrepreneur shall • Balance sheet total exceeds
In the Accounting Act, enterprises are be liable for the legality of the vouchers. €100,000
divided into micro enterprises, small en- • Turnover or corresponding
terprises, medium-sized enterprises and Financial management systems provide income exceeds €200,000
large enterprises. Here we handle most- good help for the entrepreneur for draw- • On the average, more than
ly micro enterprises and small enterprising up the accounting records. At its sim- three employees.
es. The amended Accounting Act con- plest, the financial management solution
tains the financial statement regulations is software for writing invoices. In addi- Single-entry bookkeeping basically just
drawn up for them. The following thresh- tion to the traditional paper invoices, means entering your income and ex-
olds apply to the categories: the software should enable the sending penses to create an income statement.
of invoices also in electronic form. At its
Small enterprise best, the financial management solution Other entrepreneurs than the above must
• Balance sheet €6,000,000 produces the bookkeeping documents apply for double entry bookkeeping. Dou-
• Annual turnover €12, 000,000 directly to the firm of accountants as a ble-entry bookkeeping means that each
• On the average, 50 employees report or as records to a compatible sys- business transaction is entered into two
(during the accounting period). tem. accounts, i.e. the debit account and the
credit account. This will create the in-
If no more than one of the thresholds is You should agree with your account- come statement and the balance sheet.
exceeded in two consecutive financial ant as clearly as possible on which tasks
statements, the enterprise is deemed a will be done by you and which by the ac- ACCOUNTING PERIOD
small enterprise in accounting. countant as well as on the manner in A business’s accounting period is nor-
which you must deliver the bookkeeping mally 12 months. The first accounting
Micro enterprise materials. You should always demand an period may be longer than 12 months
• Balance sheet €350,000 agreement in writing; the KL2004 con- but can never exceed 18 months. Also,
• Annual turnover €700,000 tractual terms are often used in the in- the first accounting period may be short-
• On the average, 10 employees. dustry. Delivery of the bookkeeping ma- er than 12 months. Also, a business’s ac-
terials to the accountant should be easy counting period does not have to be a
If no more than one of the thresholds is or even automatic. If the entrepreneur calendar year ( for example, 1 April –
exceeded in two consecutive financial and the accountant use the same soft- 31 March). The accounting period may
statements, the enterprise is deemed a ware, the information need not be sep- be changed during the operations, in
micro enterprise in accounting. arately sent and the bookkeeping re- which case its length will deviate from
ceipts need not be re-entered separately. the 12-month period.
DAY-TO-DAY BOOKKEEPING In that case, the bookkeeping is contin-
Day-to-day bookkeeping (monthly book- uously up-to-date and the work of the The financial period of a self-employed
keeping), which is dealt with during the accountant is made easier. If the entre- person and a private trader is, however,
always a calendar year (1 January – 31
December) if (s)he does not apply dou-
ble entry bookkeeping and prepare a fi-
nancial statement at least in accordance
with the provisions on micro enterprises.
FIRMS OF ACCOUNTANTS
It is always worth entrepreneurs using
a firm of accountants or an accountant
to deal with the bookkeeping, so that
they can use their own time for earn-
ing income. Generally, firms of account-
ants are experts in statutory bookkeep-
ing, VAT and business taxation. A firm
of accountants may also, when nec-
essary, take care of payroll computa-
tion and payroll accounting. Expertise
in cash-flow planning is also important
for small businesses. In choosing a firm
of accountants, it is worth paying atten-
Financial operative, the members ratify the finan-
cial statements and annual report in the
tion to all of these matters. Further in- statements general meeting or with a written doc-
formation on pages www.taloushallin-
toliitto.fi. comprise a profit ument. In a partnership, a formal meet-
ing is not required, as the financial state-
FINANCIAL STATEMENTS
and loss account, ments are signed by the general partners.
The same applies to private traders.
Financial statements must be prepared a balance sheet
within four months of the end of the
company’s accounting period, or earli- and the notes An entrepreneur shall not have to pre-
pare a financial statement if, during the
er if the submission of the tax return re- to the financial last ended financial period and the pre-
quires. Large enterprises must draw up ceding financial period, no more than
an annual report. statements. one of the thresholds is exceeded:
The financial statement of a small enter- • Balance sheet total exceeds

prise shall include an income statement, €350,000
a balance sheet and notes to the finan- • Turnover exceeds €700,000
cial statement as well as a list of books • On the average, 10 employees
and records. employed during the financial
The Board of Directors and managing di- period.
When the accounting period has end- rector of a company or co-operative, the
ed, the financial statements and annu- general partners of a partnership and a AUDITS
al report are created. The financial state- private entrepreneur must approve the The requirement to have a regular audit
ments for a small business comprise a financial statements with their signa- applies to general partnerships, limited
profit and loss account, a balance sheet ture. In the case of large enterprises, the partnerships, limited companies and co-
and the notes to the financial statements. annual report must also be approved by operatives. Private traders, i.e. firms and
All these documents should comply with signing it. entrepreneur professionals do not need
the specific formal requirements of the to appoint an auditor. However, when re-
Finnish Accounting Act (KPL), the Finn- If the business has an auditor, (s)he will quired, it is still possible to appoint an
ish Accounting Decree and community check the bookkeeping and the govern- auditor.
law (KPA) or the Government Decree on ance of the company, and (s)he will write
the information presented in the finan- an auditor’s report. However, according to the Finnish Audit
cial statements of a small undertaking Act, an auditor does not need to be ap-
and micro-undertaking (PMA) and the In a limited liability company, the share- pointed in small businesses, if no more
specific format requirements in the com- holders ratify the financial statements than one of the following has been ful-
munity law. and annual report in the general meet- filled in the last accounting period and
ing or with a written document. In a co- the period that immediately preceded it:
Guide
• Total sum of the balance sheet auditing firm. Information is available at Registration of Finland. The notification to
exceeds €100,000 www.prh.fi/en/ > Auditor Oversight the Trade Register must be submitted with-
• Net sales or the corresponding and www.suomentilintarkastajat.fi. in two months of the ratification of the fi-
income figure exceeds nancial statements, and the financial state-
€200,000 or If a co-operative has not appointed an au- ments must be ratified within six months
• On average, there are more ditor, it must have a performance auditor of the end of the accounting period.
than three employees. appointed by the Co-operative Meeting.
The Rules may provide otherwise. Other parties with a legal obligation to
Thus, an audit is mandatory in those keep books, such as private entrepre-
companies and co-operatives where the If a company has appointed an audi- neurs and partnerships and limited part-
limit(s) given above are exceeded. tor, the auditor must add a note about nerships, must register their financial
the audit to the financial statements af- statements if two of the following limits
A provision concerning the use of an au- ter having reviewed the financial state- were exceeded during the accounting pe-
ditor can be included in the Articles of ments. Furthermore, the auditor must riod or the previous accounting period:
Association, regulations or Memoran- prepare a dated and signed auditor’s re-
dum of Association for a new enterprise, port about the financial statements. • Net sales at least €12,000,000
even when the law does not require the • Balance sheet total €6,000,000
use of an auditor. However, if you do not REGISTERING FINANCIAL • Average number of employees
wish to appoint an auditor, there is no STATEMENTS 50 people.
point in including provisions about the The obligation of a company to submit its
use of an auditor. You can still appoint financial statements to be published in The notification must be submitted with-
an auditor if you like. the Trade Register depends on the compa- in six months of the end of the account-
ny form. Limited liability companies and ing period. For further information on
If an auditor is appointed by virtue of co-operatives must submit their financial registering financial statements, please
the law or voluntarily, an approved au- statements to the Trade Register either see www.prh.fi/en/ > Trade Register
ditor must be appointed, i.e. a chartered with their tax return or by sending them > How to file financial statements.
accountant (KHT or HT) or a chartered directly to National Board of Patents and
Please note!
After the end of the accounting period
• Prepare financial statements end of the accounting period. to the Trade Register via the Tax
that consist of an income In the case of a partnership Administration.
statement, a balance sheet and or a private entrepreneur, the
notes, as well as a list of the financial statements may simply • Other parties with a legal
accounting books and materials. be signed without a separate obligation to keep books and
The financial statements meeting. submit their financial statements
must be completed within to the Trade Register must
four months of the end of the • Register the financial statements submit their financial statements
accounting period. in the Trade Register. Limited and their annual report for
liability companies and co- registration within six months
• The financial statements of a operatives must always submit of the end of the accounting
limited liability company or a their financial statements to the period.
co-operative must be ratified Trade Register. The notification
in an annual general meeting, a must be submitted within two • If the company has appointed an
meeting of the co-operative or months of the ratification of the auditor, the auditor must review
with a written document. The financial statements. Most of the the financial statements and
financial statements must be financial statements of limited prepare an auditor’s report.
ratified within six months of the liability companies are submitted
Income taxation
T
he business pays income tax based if the total sum of wages and earned in- made. It is considered tax-free income for
on its taxable income. Income tax come is more than €14,000 (in 2017). the entrepreneur.
is paid in advance and, when nec-
essary, in arrears and as supplementary TAXATION OF INCOME In the year of foundation of the business,
payments. The form of the enterprises IN DIFFERENT FORMS OF the capital-income share is calculated
impacts on the taxation of income. ENTERPRISE according to net assets on the last day
of the first accounting period. In many
VAT is generally paid monthly on the ba- Private trader (firm) cases, the earned income of the entrepre-
sis of sales and purchases. The form of The income earned from a private trad- neur is taxed lighter than capital income.
the enterprise is not relevant when con- er’s business is taxed as his/her own in-
sidering VAT. come. The business’s income is divided If spouses work in the business together,
into earned income and capital income the business income is divided between
In the entrepreneur’s income tax calcu- on the basis of the net assets of the en- them. The earned-income share of the
lation, there may be both earned income terprise (net assets = assets relating business’s income is divided between the
and capital income. to the business and trade - liabilities spouses in proportion to their work con-
of the enterprise). The capital-income tribution, and the capital-income share
Capital income means income from sales share is calculated as follows = 20 % x according to their share of net assets.
of assets, rental income or returns on (net assets of the previous financial pe- The tax on the capital-income share of
capital. Such income includes, for exam- riod + 30 % x salaries paid during the the business’s income is 30 %, if the total
ple, interest income and rental income, last 12 months). of the capital income of the entrepreneur
capital gains and dividends received does not exceed €30,000, and 34 % for the
from public listed companies. Also, part The rest of the business income is earned share exceeding €30,000.
of the business income of self-employed income. Alternatively, the entrepreneur
persons and entrepreneur traders, the in- can decide that capital income will on- The earned-income share is added to
come share of partners in general part- ly be 10 % of net assets or that all of the other earned income of the entrepre-
nerships and limited partnerships and business income will be earned income. neur, and the entrepreneur pays tax on
the dividends issued by a normal limit- Before dividing the income from the busi- the total earned income figure according
ed liability company are regarded as cap- ness operations, a 5 % entrepreneur de- to the progressive tax scale.
ital income. It depends on the business’s duction from the business income will be
assets how big this proportion is. The tax
on capital income is 30 % for capital in- example
come not exceeding €30,000 and 34 % for
the share exceeding it. Taxation on income of private traders, example
(All capital income of the private trader per year is not more than €30, 000)
Earned income includes, amongst oth-
er things, wages and salaries, pensions, + Total revenue, €40,000
Net assets, €15,000
benefits ( for example such as study grant
and child home care allowance) and oth- - Costs, €15,000
er payments (such as unemployment ben-
efit). Tax on earned income is progressive,
i.e. the tax percentage rises as income rises. Business income to be distributed,
In other words, high earners are charged a €25,000 -5 % (€1250) = €23 750 e
higher percentage of tax than lower earn-
ers. The tax deducted from earned income
comprises state tax, municipal tax and
Capital income, Earned income, €20 750
possibly church tax. The levels of munici-
20 % x 15,000 = €3,000 Earned-income tax % x € 20 750
pal tax and church tax depend on the mu-
Tax on capital income,
nicipality and the parish. In addition, there 30 % x €3,000 = €900
are two further forms of taxation.
As of the beginning of 2017, entrepreneurs, self-employed persons and partners
Furthermore, a daily allowance of 1.58 of a partnership will receive a 5 % entrepreneur deduction from their entrepreneur
% of the YEL earned income will be paid income in their taxation.
Guide
General partnership and limited Taxation of income in a limited company

partnership
A general partnership and a limited part- Taxation of income in a limited company
nership are not regarded as separate tax- Net sales – costs = profit
payers for the taxation of income. They do
submit their own tax return, according to
which the taxable income of the partner-
ship (the income on which tax must be Salary (cost) Corporation tax of 20 % A limited company
(scale tax %) is payable
paid) is calculated. This income is split may decide to split
amongst the partners, and the partners this as follows:
pay tax on this. However, the partners are 1. Dividend = dividend
income
not taxed on the personal drawings made Dividend 2. Leave money in the
by them or the share of profit belonging to
company = boost
them according to the accounts. Partners the assets
of a partnership will receive a 5 % entre-
preneur deduction from their entrepre-
neur income in their taxation.
If at most 8 % of the mathematical value If no more than 8 % of the
Part of each partner’s income share is of a share is distributed as dividends, mathematical value of a share
capital income and part is earned in- 1. up to €150 000, 75 % shall b enon- is distributed as dividends,
come. The earned income is divided in- taxable and 25 % taxable capital a) 25 % tax-free
to the earned income and capital income income b) 75 % according to the
on the basis of the net assets of the busi- 2. of the element exceeding €150 000, earned-income tax %
ness in the previous year and the asset a) 15 % shall b enon-taxable and
share belonging to each partner. An en- b) 85 % taxable capital income
trepreneur deduction, 5 % from the com-
pany's result, is made before dividing the
business income into capital income and
earned income. It is tax free income for
a partner. own income, and the company’s income utes and what the mathematical value
does not affect the taxation of individu- of its shares is. The taxation of dividends
The tax on the capital-income share of al shareholders. At the moment, a limit- paid by a limited liability company de-
the business’s income is 30 %, if the total ed liability company pays tax of 20 % on pends on whether the company distrib-
of the capital income of the entrepreneur its income. utes more or less than 8 percent of the
does not exceed €30,000, and 34 % for the mathematical value of a share as div-
share exceeding €30,000. The earned-in- A limited liability company’s shareholders idends. In the case of a limited liability
come share is added to the partner’s oth- can withdraw funds from the limited lia- company, all of the company’s assets are
er earned income, and the partner pays bility company either as a salary or as divi- considered part of its net assets, includ-
tax on the total earned income figure ac- dends. In addition, the company can issue ing assets that serve the business as laid
cording to the progressive tax scale. a loan to shareholders, but the loan is re- down in the Act on Business Income Tax-
garded as capital income in the taxation ation. Assets that serve the business are
A silent partner in a limited partnership of the shareholder, if it has not been paid property of the company and the Tax Ad-
generally receives interest from the part- back by the end of the year. Tax-free draw- ministration deems them as fixed part of
nership on the capital invested by him/ ings are not possible in a limited liabili- the company’s business operations. Oth-
her. This kind of income is capital in- ty company. Monetary shareholder loans er assets may include shares in housing
come for the silent partner. A silent part- from the company are usually in violation companies or savings that are not re-
ner may also get a salary from the part- of the Limited Liability Companies Act. quired to fund the business operations.
nership or the partnership agreement
may determine the share of the profits A company may distribute its profit to If the dividend falls within the 8 percent
of the partnership payable to him. its shareholders as dividend. The taxa- in its entirety, 25 % thereof shall be re-
tion of dividends depends on how much garded as taxable capital income for the
Limited liability company dividend is paid and what is the value of shareholder and 75 % thereof as non-tax-
A limited liability company is regard- the company’s shares. able. For any element of the dividend ex-
ed as an independent taxpayer. This ceeding 150,000 EUR/shareholder, 85 %
means that the limited liability compa- Taxation of dividends depends on how is regarded as taxable capital income and
ny’s income is taxed as the company’s much in dividends a company distrib- 15 % as non-taxable income. If a compa-
Entrepreneur’s ployer does not need to send the tax de-
ducted from remuneration paid. The
connected. An application form is avail-
able on the www.tax.fi website.
customer is entitled right to a household deduction is only
to receive tax given when the entrepreneur receiving

remuneration for work has been entered
Payments made using the reference
number for unprompted taxes are pri-
credit for domestic in the Prepayment register. It is possible
to check whether someone is listed in the
marily used to cover overdue unprompt-
ed taxes. If some payments or returned
help only if the Prepayment register using the free YTJ taxes are not used, they can be used to
entrepreneur is (Business information system) data ser-

vice www.ytj.fi/en/ or telephone ser-
cover other overdue taxes or statutory
outstanding payments to other author-
included in the vice of the Finnish Tax Administration. ities (such as recovery proceedings or
payments to the Customs). Any unused
advance collection An entrepreneur entered in the prepay- payments and returned taxes will be re-
register. ment register shall attend to his/her tax-

es by himself/herself by paying prepay-
turned to the customer company.
ment tax usually monthly. MY TAX ESERVICE

ny distributes more than 8 % of the math- In the My Tax eService (www.vero.fi/
ematical value of a share as dividends, of REPORTING AND PAYING mytax), you can study the details of
the element exceeding 8 percent, 75 % UNPROMPTED TAXES your company, submit notifications and
shall be deemed taxable earned income Unprompted taxes include value added make payments. You can report and pay
and 25 % non-taxable income. tax and employer payments, for example. unprompted taxes, such as value added
The company must regularly calculate, tax or employer payments, and respond
The tax withheld in advance from divi- report and pay them to the Tax Admin- to additional information requests re-
dends must be reported and paid to the istration according to the company’s tax garding them. You can also submit your
Tax Administration for the tax period period. The notification must be submit- new bank account number in the My Tax
during which the dividend is payable, ac- ted if the company is included in the val- eService.
cording to a decision of the annual gen- ue added tax or employer register even if
eral meeting. The actual date on which there are no payments for the period be- To log into the My Tax eSrvice, you will
the dividend was paid does not matter. cause the company has not been active need a Katso ID for your company. A per-
or has not paid any wages, for example. son who, according to an extract from the
PREPAYMENT REGISTER Trade Register, has the right to sign the
An individual or enterprise that carries As a general rule, the tax period is a cal- company name can obtain the Katso ID.
out business activities is entered in the endar month. The regular due date for The Katso service is available at www.
Prepayment register of the Finnish Cen- both the notifications and the payments yritys.tunnistus.fi. With the Katso ID,
tral Tax Administration. The notification is the 12th day of the month. The notifi- the company can also provide authorisa-
shall take place by filing the start-up no- cations must be submitted in electronic tion for an agent to submit the electronic
tification or a notification of change if format and the payments can be made notifications on behalf of the company. A
the enterprise already has a Business ID. in My Tax eService of the Tax Adminis- power of attorney for electronic commu-
tration, for example. nications can also be given.
The enterprise is admitted to the Pre-
payment register if the enterprise or the A company may apply for a longer tax
people managing the enterprise have not period. The application limit for a long-
demonstrated negligence in taxation is- er tax period is determined based on the
sues. The Tax Administration can remove net sales of the calendar year or corre-
an enterprise from the Prepayment regis- sponding profit as laid down in the Ac-
ter if that business does not take proper counting Act. A tax period of one quar-
care of its payment of taxes or it does not ter of a calendar year is possible for both
fulfil its accounting obligations or other value added tax and employer payments
obligations relating to taxation. The on- if the estimated net sales are a maximum
ly company for which registration in the of €100,000. In the case of value added
Prepayment register is not mandatory tax, a tax period of a calendar year is al-
is a company that only practices barter so possible if the estimated net sales are
trade. a maximum of €30,000. The selected tax
period is binding on the company for one
When an entrepreneur has been entered year. The tax periods for value added tax
in the Prepayment register, his/her em- and employer payments are not inter-
Guide
Value added tax (VAT)
V
AT is a tax on consumption, which Those liable to VAT are almost all busi- As of the beginning of 2017, companies
the seller adds to the sales price of nesses that sell goods or services. The whose net sales during an account-
goods or services. Almost all busi- sale of services includes, for instance, ca- ing period is a maximum of €500,000
nesses who sell goods or services are obli- tering, consulting and transport services. have the opportunity to pay the VAT
gated to pay value added tax. Services infor their sales and deduct the VAT for
clude catering, consulting and transport BUSINESS OPERATIONS NOT their purchases based on the payments
services, for example. SUBJECT TO VALUE ADDED made. This way, companies can allo-
TAXATION cate the VAT to be paid and the VAT
Operations to which the value added tax- to be deducted based on purchases to
ation is not applied are separately listed the month during which the company
in the Value Added Tax Act. The share of receives the payment for the goods or
VAT may not be deducted for any relat- services sold or pays the goods or ser-
VAT rates (VAT %) ed acquisitions either. vices bought.
Such operations include, for ex- This means that the company may
THE GENERAL RATE
ample: choose whether it wants to pay VAT
• Most goods and services
• Sales and rental of properties based on performance or based on pay-
24 % and apartments ments. On the other hand, entrepre-
• Healthcare and social welfare neurs and self-employed persons with
services a microenterprise can pay value added
• Training services separately tax based on the payments made, as the
named in the Value Added Tax Accounting Act does not require any fi-
Act nancial statements from them. The se-
• Foodstuffs • Financing and insurance lected procedure will influence the de-
• Animal feed services duction savings and the way in which
• Restaurant and catering • Copyright and performance the financial statements are processed.
services fees separately named in the
However, alcoholic beverages and tobac-
co products Value Added Tax Act If the net sales of a business for an ac-
• General postal services. counting period of 12 months do not
14 % exceed €10,000, it does not need to reg-
If a company only sells these goods or ister itself as liable for VAT. It is worth
services, it is not obligated to pay value the entrepreneur being realistic when
added tax and it does not have to register (s)he estimates the level of the busi-
in the value added tax register. ness’s net sales. If the €10,000 limit is ex-
• On subscriptions of newspa- ceeded, even though the entrepreneur
pers and periodicals If a company practices foreign trade, the has estimated that net sales would be
• Books VAT for the sales is usually 0 %, but the lower, (s)he must pay VAT backdated
• Pharmaceutical products company is entitled to deduct the VAT from the start of the accounting peri-
• Physical exercise services from acquisitions. od. In addition, delayed-payment fees
• Film showings will be charged. Neither can the VAT of
• Entrance to cultural and enter- The entrepreneur shall pay to the State purchased products be deducted if the
the VAT (s)he has collected in connec- business is not liable to pay VAT. The
tainment events
tion with sales and of which (s)he has entrepreneur can also apply to be sub-
• Passenger transport services
deducted the VAT of his/her own pur- ject to VAT even though net sales will
• Accommodation services
chases. Sales on goods and services are remain below €10, 000 for an account-
• Operations relating to TV and generally subject to VAT. ing period of 12 months.
public broadcasting against a
fee As a general rule, the Value Added Tax Act With VAT, lower-limit relief is availa-
10 % requires a performance-based approach, ble if the enterprise’s net sales for an
i.e. the value added tax is linked to the time accounting period fall below €30,000.
when the transaction actually takes place. When the enterprise’s net sales for
an accounting period do not exceed
€10,000 the enterprise gets relief on the TAX DEBT REGISTER is available only to registered users. Log-
whole tax chargeable for the accounting The Tax Debt Register is a public service ging in takes place with the Katso user
period. When calculating the sales qual- from which you can check the tax debt ID. Search using a name or a company ID.
ifying for VAT relief, the share of the VAT of any company or private entrepreneur The limit for publishing a tax debt in the
shall not be included.If net sales exceed and whether they have neglected to pay Tax Debt Register is €10,000.
€10,000 but fall below €30, 000 the relief any unprompted taxes.
is calculated as follows:
The information in the Tax Debt Regis-
(net sales - 10 000) x tax ter can be found at the Business Informa-
Tax –
20 000 tion System (BIS) site (www.ytj.fi/en).
For example: Information on businesses is available to
everyone. However, tax-debt information
Net sales are €19,000, and the VAT on self-employed persons (trade names)
that should be paid is €3,426.
The relief is calculated as Calculating the amount of VAT

(19 000 - 10 000) x 3 426
3 426 - Including tax Net of tax VAT 24%
20 000 Monthly
EUR EUR EUR
So, the relief is €1,884.30. Sales 6 200 5 000 1 200
Purchases 1 860 1 500 360
If an entrepreneur who is liable to VAT VAT payable 840
buys goods or services from anoth-
er who is liable to VAT and VAT is in-
cluded in the price, (s)he may deduct Please note!
this VAT from the tax that (s)he pays
to the state. This can be done provid-
ing these goods or services are used
in business operations subject to VAT. Taxation of company
forms
In that case, the entrepreneur must
have an invoice or a purchase receipt • Limited liability companies
that shows the tax included in the and co-operatives are
price itemised in accordance with the independent taxpayers, and
different tax rates. their profit is taxed as the
For more company’s income.
There are separate regulations about information on
VAT for imports, exports and other in- taxation, please • General and limited
ternational business. In these cases, it visit www.tax.fi. partnerships are not
is worth clarifying matters with your independent taxpayers.
tax office or an accountant. Instead, the taxable income
of the company is divided
The so-called reserve charge system according to the partnership
is applied in Finland in the sales of agreement into the partners’
construction services and scrap met- income shares, and each
al. No VAT is added to the seller’s in- partner is obligated to pay
voice and the buyer adds the VAT in tax for their share.
the VAT payable by him/her and de-
ducts it in the deductible VAT if the • The income of a private
acquisition is used for a purpose en- entrepreneur is considered
titling to a deduction. as their personal income in
taxation.
Further information about taxation is
available from www.tax.fi.
Guide
Becoming an employer
I
n an employment relationship, an em-
ployee performs work under the em-
Recruiting employees and
ployer’s direction and supervision in employer obligations
return for pay or some other remuner-
ation. An employment relationship aris-
es when the employer and the employee 1. Define the criteria for the task (know-how, experience and motivation).
agree on the performance of the work. Decide on the form and duration of the employment relationship.
CONCLUSION OF AN 2. Be prepared to submit further information and study the applications.

EMPLOYMENT CONTRACT
As a rule, employment contracts are free 3. Arrange job interviews and make the decision.
of form. An employment contract may be
written, oral or electronic. It is, however, 4. Sign the employment contract. Check for a collective agreement, see
recommended always to conclude a writ- www.finlex.fi/en/. Show the tasks to the employee.
ten contract.
5. Seek registration in the Tax Administration’s Employer Register if your
The employment contract may be made company will begin to pay out wages regularly and if you will pay wages on a
for a fixed term or with an indefinite va- regular basis to at least two permanent employees or at least six temporary
lidity. A fixed-term employment contract employees. The notification is filed using the start-up notification form or
must always have justifiable grounds for the form for notification of changes.
it. Such may be, for example, acting as
a substitute, seasonal work or one-time 6. Take out statutory Workers’ Compensation Insurance as well as
work or training period. Employees’ Group Life Assurance prior to the start of the work if the
estimated wages exceed €1,200 per calendar year.
However, the signing of a temporary em-
ployment contract does not require any 7. Take out Employees’ Pension Insurance TyEL within the month following
justified reason if the person to be hired the payment of wages.
has, according to a report by the TE Of-
fice, been unemployed and seeking for 8. Apply for the determination of the unemployment insurance contribution
work for a continuous period of twelve from the Unemployment Insurance Fund if the total wages will exceed
months before the signing of the em- €1,200 during a calendar year.
ployment contract. A fixed-term employ-
ment contract may be valid for a maxi- 9. Arrange occupational healthcare if you hire an employee in an employment
mum of twelve months. relationship, see www.kela.fi.
An employment relationship is subject to

minimum terms based on legislation (in- A trial period starting from the begin- WRITTEN INFORMATION ON
ter alia the Employment Contracts Act, the ning of the work may be agreed on in TERMS OF WORK
Working Hours Act and the Annual Holi- the employment contract. The trial pe- If no written contract has been drawn up,
days Act) and collective agreements. An riod may usually be a maximum of six the employer shall, without a separate
employer belonging to an employers’ fed- months. In the case of a fixed-term em- request, present written information on
eration must comply with the collective ployment contract, the trial period may the principal terms of work, which have
agreement concluded by his/her employ- be a maximum of half of the fixed term not been agreed on in a written contract.
ers’ federation. Even an unregistered em- and always a maximum of six months. The information shall be presented to the
ployer is liable to comply with the general- employee at the latest by the end of the
ly applicable collective agreement if one is During the trial period, the employment first pay period.
concluded for the sector. Prior to conclud- contract may be cancelled by either par-
ing an employment contract, it is therefore ty. The cancellation may not, however, The duty to provide information applies
necessary to find out if a generally applica- take place on grounds that are inappro- to all employment contracts valid indefi-
ble collective agreement has been conclud- priate with regard to the purpose of the nitely or for a term exceeding one month.
ed for the main business sector of the en- trial period. The duty to provide information applies
terprise (cf. www.finlex.fi/en/). also to the employer if the employee is
repeatedly in employment relationships • the regular working hours; changes (www.ytj.fi/en), if the under-
of less than one month on the same • the manner for determining taking already has a Business ID. The Tax
terms with the same employer. annual holiday Administration shall send the undertak-
• the period of notice or the ing instructions for the use of the Tax Ac-
If the terms of the employment relation- grounds for its determination. count in the payment and reporting of
ship change, the new terms must be pre- tax withholding and employer’s health
sented in writing at the latest by the end In the case of work performed abroad for insurance contribution.
of the pay period following the change. a minimum period of one month, the in-
formation must include the duration of PAYMENT OF THE PAY
The information may consist of one or the work, the currency in which the mon- The minimum pay payable to an employ-
several documents or it may be present- etary pay is to be paid, the monetary re- ee shall be indicated in the generally ap-
ed by referring to the Act or collective munerations and fringe benefits applica- plicable collective agreement. In the ab-
agreement applicable to the employ- ble abroad as well as the terms for the sence thereof, the pay shall always be a
ment relationship. In temporary work, repatriation of the employee. reasonable remuneration for work con-
the information shall be provided upon sidered normal in the sector with regard
request of the temporary agency employ- HIRING AN EMPLOYEE to the nature of the work. A minimum
ee even if the employment contract has At the beginning of the operations, the pay is not provided by law. A pay meeting
been concluded for a fixed period of less need for work force may be unclear or the employee’s work requirement, avail-
than one month. undefined. There may not be guarantees able at the website of Kela (www.kela.
for the continuity of the operations. In fi), may be considered a type of mini-
The employment contract or that case, a more flexible way to acquire mum pay.
information shall include at least work force than to employ one oneself is
the following information: to buy the necessary resources from an- The wages must be paid on the last day of
• the domicile or business other undertaking. The staffing enter- the pay period unless otherwise agreed.
location of the employer and prise pays the salary of the employee and The employer must ensure that a payslip
the employee attends to all other employer obligations. is submitted to the employees in connec-
• the date of commencement of It complies with the collective agreement tion with each payment of wages. The
the work binding on the user enterprise. The us- wages must always be paid to a bank ac-
• Duration of the fixed-term er enterprise shall be liable to direct and count; payments in cash are only possi-
employment contract, ending guide the employee; it also supervises the ble in very rare exceptional cases.
date or estimated ending date work carried out by the employee.
of the employment, justification It is usually worth while to let an ac-
for the employment contract EMPLOYER REGISTRATION BY counting firm take care of the calcula-
being a fixed-term one or a THE TAX ADMINISTRATION tion of wages and the submission of em-
notification that it is a fixed-term If an enterprise pay out wages or salaries ployer notifications.
employment contract with a long- regularly, the enterprise are expected to
term unemployed person as laid seek registration as a regular employer in PAYMENT OF TAXES
down in chapter 1, section 3 a of the Tax Administration’s Employer Reg- WITHHELD AND
the Employment Contracts Act. ister. HEALTH INSURANCE
• the trial period (if any agreed CONTRIBUTIONS
upon) The enterprise are an employer paying The employer shall always be liable to
• the place where the work is wages regularly if wages or salaries are withhold tax on wages and compensa-
performed or, if the employee paid to at least two employees on a regu- tions for work paid. The employer shall
has no primary fixed workplace, lar basis or wages or salaries are paid to at pay the health insurance contribution
an explanation of the principles least six employees at the same time on a on the basis of the total amount of wages
according to which the temporary basis, i.e. under temporary em- paid. The health insurance contribution
employee will work in various ployment contracts with short durations. shall, however, not be paid of wages paid
work locations to employees under the age of 16 or over
• the employee’s principal duties; If payment of salaries and wages is tem- the age of 68. The employer reports the
• the collective agreement porary, or these are paid to only one em- amounts withheld and the health insur-
applicable to the work ployee, the business does not need to en- ance contribution (employer's contribu-
• the grounds for the rol in the Register of Employers. tions) by filing a Periodic tax return, usu-
determination of the pay or ally monthly, to the Tax Administration
other remuneration as well as Notification takes place by filing the on the 12th day of the calendar month
the pay period start-up notification or a notification of following the month of wage payments.
Guide
The payment of the amounts takes also Employer shall written agreement as well as a plan of ac-
place on the same day. tion with the service provider. The plan of
always be liable action must be based on the workplace in-
FILING OF THE ANNUAL
INFORMATION RETURN
to withhold tax vestigation performed.
Every employer must report annual in- on wages and An entrepreneur who is an employer may,
formation to the Tax Administration con- based on the Health Insurance Act, apply
cerning the wages paid and other pay- compensations for for compensation from the Social Insur-
ments made (such as mileage and daily
allowances). The information must be giv-
work paid. ance Institution (Kela) for necessary, rea-
sonable costs from the arrangement of
en in the annual information return. The occupational healthcare services. The oc-
return must be filed by the end of January cupational healthcare services are offered
following the calendar year of payment. • The occupational accident free of charge to the employee.
insurance premium is 0.1–7.0 % of
INDIRECT STAFF COSTS the salary depending on the line of INSURING AN EMPLOYEE
(in 2017) business. The average is 0.8 %.
• For salaried employees, • The group life assurance premium TyEL Insurance
employees’ pension insurance is on average 0.07 % of the salary. An employer who employs staff on a reg-
(as specified by the Finnish ular basis (a contractual employer) shall
Employees’ Pensions Act) must KEEP IN MIND take a separate employment pension in-
be taken, if a salary of €58.19 a • The collective agreement may surance. The insurance must be taken
month or more is paid to them. provide for a holiday bonus. during the month following the payment
The pension contribution of small of wages. If the wages paid by the enter-
employers paid to the pension • Annual-leave earning in the 1st prise fall below €8,334 (in 2017) with-
insurance company is 25.10 % year is 2 days/month, after that 2.5 in six months and the enterprise has
of the employee’s salary. In the days/month. The average number no permanent employees, the pension
case of temporary employers, the of workdays is 258 in a year. insurance contributions may be paid
pension contribution is 25.10 % of without a separate insurance contract.
the wages. The employee’s part of • The employer shall pay wages In that case, the contributions shall be
the employee pension insurance also during a sick leave of the paid to the selected pension insurance
contribution that the employer employee in accordance with company by the 20th day of the month
withholds from the wages is the legislation and the collective following the payment of wages.
6.15 % for employees between agreements.
the ages of 17 and 52 or 63 and Statutory workers’
67, and 7.65 % of the wages for • The collective agreement may compensation insurance
employees between the ages of provide for the payment of wages An employer has a statutory obligation
53 and 62. also during a motherhood leave to insure his/her employees against oc-
• The employer’s health insurance and during a short-term absence cupational injuries and occupational dis-
contribution is 1.08 % of the due to a sudden illness of a child. eases if the wages paid or agreed to be
wages. paid for work performed during a cal-
• The unemployment insurance OCCUPATIONAL HEALTH endar year exceed €1,200. The insurance
contribution is 0.8 % of the CARE must be taken prior to the commence-
salary when the employer pays An employer shall be liable to arrange pre- ment of the work.
no more than €2,059 500 in ventive occupational health care for his/
wages and salaries in a year. her employees in an employment rela- Group life insurance
The insurance contribution is tionship. In addition, the employer may The employees’ group life insurance is
3.30 % of that part of wages organize medical treatment of gener- based on a mutual agreement between
and salaries that exceeds this. al-practitioner level. The Occupational labour market organisations. With cer-
The employee’s unemployment- Health Care Act applies to work which is tain exceptions, it applies to all employ-
insurance contribution is 1.6 %. governed by the Occupational Safety and ees in employment relationships gov-
The unemployment insurance Health Act and performed in Finland. Oc- erned by the Employees Pensions Act.
contribution shall be paid to the cupational health care services may be The insurance shall be taken in connec-
Unemployment Insurance Fund acquired, for example, from a municipal tion with the statutory workers’ compen-
(www.tvr.fi/en/). health care centre or from a private med- sation insurance through a non-life in-
ical centre. The employer shall draw up a surance company.
Unemployment insurance Please note!
An employer shall pay the unemployment
insurance contribution if the wages paid
during a calendar year exceed €1,200. The
employer shall, however, always withdraw Employer obligations
the employees’ unemployment contribu-
tion share from the wage. The Unemploy- • Follow the working hour legis- on longer tax periods, please
ment Insurance Fund shall determine the lation and the industry’s collec- see page 75.
prepayments of unemployment insur- tive labour agreement. • Pay the statutory insurance pre-
ance contribution, which the enterprise • Pay the wages on time into the miums, including the shares
may apply for in the electronic services bank account of the employee. withheld from the employees,
at www.tvr.fi/en/ after the total sum of • Withhold the tax from the wag- as agreed to the employee pen-
wages can be estimated. es. Don’t forget to withhold the sion company, the Unemploy-
employee’s share of the em- ment Insurance Fund or your in-
ployee pension insurance con- surance company.
tribution and the employee’s • Submit the annual report on
unemployment insurance con- wages paid and employer pay-
tribution. ments to the Tax Administration
• Give the employee a payslip af- by the end of January the fol-
ter each payment. lowing year.
• Report and pay the employer • Apply for compensation from
payments (the tax withheld in Kela for the costs arising from
advance and the health insur- the occupational healthcare ser-
ance contribution) to the Tax vices within six months of the
Administration by the 12th day end of the company’s account-
of the payment month in the ing period.
MyTax eService (www.tax.fi/
mytax). For more information
EXAMPLE
CALCULATION LABOUR EUR
COSTS
ENTREPRENEUR’S KEY DATES
Monthly wages 3, 000.00
Employer´s social 12th day
security contribution 32.40
1.08 %
Finnish Central Tax Administration
Small employer with • pay VAT, tax deducted at source and social security
insurance contract, contributions and submit returns for these.
pension contribution
25.10 %, of which the 568.50 20th day
share of the employer
is 18.95 % (employees
under 53 years) Insurance company
Occupational accidents, • pay TyEL and YEL contributions (employees and self-employe
injuries and diseases pension contributions) and other insurance premiums.
24.00
insurance premium, on
the average 0,80 % 23rd day
The employer´s
unemployment insurance 24.00 Finnish Central Tax Administration
contribution 0.80 % • pay the business's tax prepayments.
The group life insurance
premium in the private
2.10
sector on the avarage
0.07 %
TOTAL 3,651
Guide
Environmental responsibility of
the business
W
hen you decide on the line ducer’s responsibility to arrange the re- guidance on recycling is available from
of business for your compa- covery, recycling and other waste man- www.kierratys.info.
ny and begin operations, you agement of waste generated from
should take environmental matters into products as well as to pay any costs aris- Respect the environment if you use
account. All operations will have an im- ing therefrom. With regard to packaging, dangerous materials.
pact on the environment. Laws, Govern- producers mean enterprises which pack Hazardous waste contains substances
ment decrees and other regulations ob- or import packaged products to Finnish which, already in small quantities, may
ligate companies to take into account markets and whose turnover exceeds €1 be harmful or hazardous both to people
environmental issues in their business million. The product responsibility ap- and the environment www.vaarallinen-
operations. In addition, monitoring of plies to all packagings as well as the pack- jate.fi. A list of different types of hazard-
electricity consumption, for example, aging waste generated from their use. For ous waste and their collection points can
and sorting of waste also save business further information, contact Suomen Pa- be found in kierrätys.info.
costs. kkauskierrätys RINKI Oy, rinkiin.fi.
Chemicals and other hazardous materi-
Environmentally responsible operations Identify harmful environmental im- als must be used and stored as provid-
are also a marketing tool and a compet- pacts. Establish how they can be re- ed for. For further information on chem-
itive factor for small businesses. Nowa- duced. icals, see www.tukes.fi/en/.
days, consumers are very informed, and A business does not necessarily have to
they respect enterprises that take ac- make large investments. Instead, it can Think about the environment when
count of environmental matters in their just implement changes to existing prac- you make purchases.
operations. Everyday purchasing deci- tices to create the desired impact. For ex- Use eco-label products that have been
sions may be made in accordance with ample, electrical appliances consume a produced nearby, and try to use Fair-
these values. lot of energy while on standby: a comput- trade or organic products. Buy products
er’s electricity consumption may reduce that are in economy-size packs or that
TAKE CARE OF THE by as much as 60 % when energy-saving are recycled. You can also buy green (en-
ENVIRONMENT measures are introduced (source: Moti- vironmentally friendly) electricity. New
va). Monitor energy consumption in your fridges, freezers and dishwashers are
Establish what environmental legis- business systematically, so that you notice more energy efficient than old ones. Sav-
lation there is concerning your busi- any areas of unnecessary consumption. ings can also arise by using less electric-
ness. ity, water or even detergent. Familiarise
As an EU country, Finland has a lot of Familiarise yourself with waste-dis- yourself with the eco-friendly labels such
environmental legislation and regula- posal regulations in your business’s as the Swan mark, the Flower mark, the
tions that concern businesses and vari- area. Energy mark, as well as “Luomu” (Organ-
ous industries. For example, does it im- The sorting and reduction of waste gen- ic), the EU organic mark, Demeter, Eko-
pact on your business’s operations that a erated by business operations is real- energia and the “Reilu kauppa” (Fair-
manufacturer and importer of products ly important. Waste that has been well trade) marks.
is responsible for organising and paying sorted and delivered to the waste collec-
for the waste disposal of products when tion point can be used again. Generally
products are taken out of use? Further speaking, the same sorting regulations
information is available from the envi- apply to businesses operating in a resi-
ronmental authority for your own mu- dential building as they do to residents.
nicipality and from www.environment. If a business operates in its own business
fi and www.yrityssuomi.fi/en/yrityks- premises or property, it will create an in-
en-ymparistotieto. dependent waste-disposal agreement.
Fulfil the producer responsibility of The best solution for the environment
your enterprise also with regard to is the reduction of waste; mixed waste
packaging. that has not been sorted is money that
Producer responsibility refers to the pro- is pointlessly carried to a waste tip. More
Business culture
in Finland
T
o succeed in business it is impor- In Finland, businesses encounter little All people are
tant to know Finnish business bureaucracy. Decisions are made quick-
culture, attitudes and customs. ly, and businesses act efficiently after valued as equal
Then it is possible to serve customers
better and also understand what your
careful planning and preparation.
regardless of age,
customers expect. Finland is among the world’s least cor- gender, profession
rupt countries, so gifts, of either goods
The Finns like to use their time effec- or money, must never be offered to of- and religion.
tively. They happily plan timetables and ficials or business partners. However,
stick to the times agreed. In written a small reminder of a good acquaint-
Finnish, the 24-hour clock is used. It is ance is allowed, such as giving a card or
still good to check agreed meeting times a small gift of minor value, for example
by e-mail for instance. at Christmas.
The working day generally starts in the

morning around 8 a.m. and ends in the
afternoon around 4 p.m. Lunchtime is
around 11 a.m. – 1 p.m.
All people are valued as equal regard-

less of age, gender, profession and reli-
gion. Women are equally involved both
in corporate life and as public servants.
Addressing people using the familiar
form of “you” in Finnish is very com-
mon. It is good to remember to be po-
lite when talking to people in meetings,
phone conversations and e-mails.
It is good to thoroughly prepare your-

self for meetings and to arrive on time.
On arriving at a meeting, a firm hand-
shake while looking at your colleague’s
eyes creates a trustworthy first impres-
sion. Finns drink a lot of coffee, and it
is also often provided in business meet-
ings. At the end of a meeting, people
shake hands.
83
Guide
Business dictionary
BALANCE This is the difference between the BUSINESS ANGEL This is an individual who in- COMPETITION In its marketing, a business
sums of the debit entries and the credit entries vests his/her own money in growth enterpris- can use various means by which it differenti-
in the bookkeeping for a business. The balance es. A business angel may, in addition to mak- ates itself from other similar enterprises. These
of the accounts payable and receivable states the ing capital investments, act, for instance, as a may be, for instance, location, products, quali-
amount of receivables or payables and the bank member of the board of directors or as a busi- ty, price and availability. The opposite of compe-
statement shows the amount of cash in the ac- ness mentor or help in finding contacts and cre- tition is a monopoly where only one enterprise
count or the credit used of the credit account. ating collaborative relationships. engages in a specific activity and thus it is able
to set prices for its products at the level it wish-
BALANCE SHEET This is a statement of ac- BUSINESS IDEA A business’s operations are es because there is no competition. Economic
count forming part the financial statements of based on a business idea, which is a description competition is regulated by competition legis-
a business. It shows the assets and debts of the of the benefit of a product or service, its market- lation. See also Direct and indirect competition.
business at a certain point in time. In the bal- ing and the line of business, along with how the
ance sheet, the assets owned by the business are idea will be commercialized. COST An expense or part of an expense allocat-
listed under the Assets heading (debit) while ed to a certain accounting period, most often
the shareholders’ equity and the business’s BUSINESS INCUBATOR This helps a new busi- for a financial period.
debts are listed under the Liabilities heading ness so that it can grow and develop. A business
(credit), the same as the accumulation of ap- incubator provides an enterprise with, for ex- CREDIT In bookkeeping, financial transac-
propriations and the provisions. ample, premises, advisory and expert services, tions are entered in accounts for whose right
mentoring, training and networking opportu- side the term “credit” is used and for whose left
BANKRUPTCY is where the business’s oper- nities. The entrepreneur creates an agreement side “debit” is used.
ations end and all distrainable assets are con- with the business incubator for a fixed period,
verted into cash to pay debts that have arisen usually two years. CROWDFUNDING is a practice for collecting
from the business’s operations. Bankruptcy pro- funding for entrepreneurial activity via crowd-
ceedings may be initiated by the debtor itself or BUSINESS OPERATING MODEL This shows funding platforms in the Internet.
the creditor. what happens in a business, so that a product
or service can be delivered. It is a description of CUSTOMS CLEARANCE When goods are im-
BENEFIT This is generally money to which an the different functions in the business and how ported or exported, tax-related and administra-
individual has a right on the basis of legislation, they interact. tive procedures are associated with this. Cus-
for example. Benefits include pension benefits, toms clearance is taken care of by the customs
amongst other things. BUSINESS PLAN This is a written plan of the authority (www.tulli.fi/en > Businesses). For cus-
implementation of the business idea in practice. toms clearance, a declaration form is completed,
BOOKKEEPING It includes an assessment of the factors affect- where the authority is provided with information
- Double-entry bookkeeping means that eve- ing profitability as well as estimates of sales, in- about the goods, such as their value and quantity.
ry business transaction is recorded in two vestment requirements and sources of finance.
accounts, i.e. a debit (charges) and a credit CUT-RATE PRICE means an unreasonably low
account (income). The account entries in dou- BUSINESS-TO-BUSINESS means between price level compared to production costs and
ble-entry bookkeeping explain on one hand the businesses. For example, a marketing campaign current market prices.
reason for the movement of money an may be just directed at businesses, i.e. business-
A self-employed person and private trader shall to-business. DAILY CONSUMER GOODS are consumer
not be liable to apply double entry bookkeeping goods used on a daily basis, such as all food
if no more than one of the preconditions is met CAPACITY means ability to perform or pro- products, soap and toilet paper.
during both the financial period last ended and duce. For example, how many goods a business
the preceding financial period: is able to produce in a certain time period. DEBIT In bookkeeping, transactions are record-
1) balance sheet total exceeds EUR 100,000 ed in different accounts. Charges are shown on
2) turnover or corresponding income exceeds CAPITAL Money or assets (property given as the left (debit) and income on the right (credit).
EUR 200,000 a capital contribution) that the entrepreneur
3) on the average, more than three employees. him/herself or another investor transfers to a DEGREE OF SOLVENCY The more equity an
- Single-entry bookkeeping In single-entry business. Capital can be divided into sharehold- enterprise has in relation to loan debt, the more
bookkeeping, expenditure, income, interest, ers’ equity and liabilities. In addition to equity solvent the enterprise is.
taxes and personal use of goods and services are that has been invested in the business, share-
recorded on the basis of movement of cash (the holders’ equity comprises capital that has ac- DEPRECIATION AND WRITE-DOWNS The
cash-payment basis). This describes the busi- cumulated from operational income or valua- cost of acquisition of fixed assets subject to
ness’s income and expenditure. tion of the balance sheet assets at a value higher wear and tear, such as machines and applianc-
that the acquisition cost. Liabilities comprise es, is reduced in the accounts with depreciation
BREAK-EVEN POINT means the theoreti- capital which an external party has invested in and write-downs over that period during which
cal level of net sales where the business has the business and which must be paid back. De- the assets give rise to an economic benefit (op-
a zero result, i.e. it makes no profit and no pending on the terms of the loan, a subordinat- erating economic life of the asset).
loss. ed loan may be either equity or liabilities.
DIRECT AND INDIRECT COMPETITION Di-
BUDGET This is an operational plan that the busi- CASH FLOW is money that comes into the en- rect competition means that another business
ness aims to fulfill during the period in question. terprise’s funds from products or services sold competes openly with your business and offers
In this, the profit and cost targets are presented and also money that flows out. the same products and services. Indirect com-
numerically, in euros, for instance. petition means that another business offers
COMMITMENT This is a binding promise. It different products and services from your busi-
BUSINESS ACTIVITY This is a way that some- means that the person must do what (s)he has ness, but they can fulfill the same needs. For ex-
one earns money to live off. Businesses include, committed to do or what (s)he promised to do. ample, a pizzeria will compete indirectly with a
for example, transport, hotel and bookkeeping fast-food outlet selling hamburgers but directly
services and catering activities. with another pizzeria.
84
DISTRIBUTION OF PROFITS refers to the Spain, Ireland, Great Britain (the United King- limited company and Societas Europaea. The
share of the distributable assets of a company dom of Great Britain and Northern Ireland, and form of enterprise affects limitation of the en-
decided to be distributed. The amount of the Gibraltar)*, Italy, Austria, Greece, Cyprus, Croa- trepreneur’s liability, the minimum number of
distributable assets in the balance sheet may be tia, Latvia, Lithuania, Luxembourg, Malta, Por- people founding the enterprise, taxation and
distributed to the shareholders of a limited-li- tugal, Poland, France, Romania, Sweden, Ger- distribution of profits as well as registration
ability company. many, Slovakia, Slovenia, Finland, Denmark, the payments in the initial stages and the minimum
Czech Republic, Hungary and Estonia. In 2016, capital required.
DOUBLE-ENTRY BOOKKEEPING See Book- the United Kingdom decided to leave the EU.
keeping. The negotiations on the separation will start in GAINFUL EMPLOYMENT Work via which fi-
2017. nancial income or income with a monetary val-
DUE DATE is, for example, the last date of pay- ue is sought.
ment on an invoice. FAMILY BUSINESS This is that type of business
where mainly family members or close relatives GENERAL COMMERCIAL ACTIVITIES means
E-COMMERCE is commerce conducted via in- work in the business either as shareholders, ac- that the enterprise engages in, or that it is able
ternet. Purchases by consumers shall be gov- tive partners or as individuals assisting the en- to engage in, all kinds of lawful business activ-
erned by the provisions on distance selling; it is trepreneur. ity. General commercial activities can be re-
worth while to examine them carefully before corded in the foundation documents for an en-
establishing an online store. FINANCE Starting up a new business always terprise and they are declared in the Finnish
requires money. Finance may include the en- Trade Register. (Thus, no particular line of busi-
EEA AREA This includes Iceland, Liechtenstein trepreneur’s own money, operational income, ness is specified, such as construction or clean-
and Norway, plus the member states of the Eu- loans or state subsidies. ing.)
ropean Union. EEA means European Econom-
ic Area. FINANCIAL PERIOD This is an accounting GOODS Bread, milk and other products that
period (usually 12 months) for which the busi- are used directly are consumer non-durables.
E-INVOICE means an invoice in electronic ness’s result (profit or loss) is determined. In Consumer durables include, for example, wash-
form which the consumer has ordered in his/ some (exceptional) circumstances, the busi- ing machines and televisions whose operating
her Netbank from the invoicer and which may ness’s financial period may be shorter or longer life is long. With the help of capital goods, these
also be placed in direct debiting. than 12 months (but no more than 18 months), consumer goods are produced, or new capital
when operations are commenced or terminat- goods. Capital goods include, for example, raw
ELECTRONIC BILLING means the sending ed or the date of the financial statements is materials, machines and fuel.
and receipt of an invoice in electronic form. changed (Finnish Accounting Act). The finan-
The invoice data is transmitted directly from cial period of a self-employed person and a pri- GRAPEVINE is a term for unofficial informa-
the system of the invoicer to the data system vate trader must be a calendar year unless (s)he tion that people pass on to each other. The
and accounts ledger of the recipient’s financial prepares a financial statement and applies dou- grapevine may be, for example, chitchat in the
management solution, where the invoice may ble entry bookkeeping. workplace or writing in an internet discussion
transfer directly to approval, payment, account- forum. Some people may spread false informa-
ing and finally to archiving. Electronic billing FINANCIAL STATEMENTS These are state- tion on purpose.
in different forms may be sent with most of ments of account that are prepared for the fi-
the financial management and invoicing solu- nancial period. They show the financial result GROSS PRICE The total price without any dis-
tions. Public administration has, for the most for the business and its financial position at the counts and including tax.
part, transferred to electronic billing. You can end of the accounting period. It includes the in-
send e-invoices also by using free invoicing ap- come statement and the balance sheet for the GUARANTEE This means that another per-
plications or electronic billing forms provided financial period as well as their notes and the son (the guarantor) promises to pay a person’s
by operators as well as through netbank. The list of books and records. It shall be prepared debts to the creditor, if the debtor is not able
transfer of an e-invoice is always subject to an at the close of each financial period. The finan- to pay his/her debts. The guarantee may be, for
invoice-specific charge but nowadays no start- cial statements are checked by an auditor, if the example, a personal guarantee, a joint guaran-
ing or monthly debiting is made. Public admin- business is obliged by law to have its accounts tee, a blanket guarantee or a conditional guar-
istration has, for the most part, transferred to audited or if the business chooses voluntarily to antee.
electronic billing. have an audit.
A self-employed person and private trader shall INCORPOREAL RIGHTS protect immaterial
ELECTRONIC INVOICE is the general term not have to prepare a financial statement if, rights, such as technology, design, trademarks
for an invoice in electronic form. The electron- during the last ended financial period and the and other characteristics. An incorporeal right
ic invoice may be the consumer’s E-invoice, preceding financial period, no more than one of is an exclusive right, i.e. only the holder of the
electronic billing between companies or even a the thresholds is exceeded: right or someone licensed by him/her may use,
PDF invoice transmitted via E-mail. 1) balance sheet total exceeds EUR 350,000 for instance, a patented invention or a utility
2) turnover exceeds EUR 700,000 model in commercial operations. Incorporeal
EMPLOYEES’ PENSION INSURANCE is ob- 3) on the average, 10 employees employed dur- rights can be generally divided into copyrights
tained from pension insurance companies. The ing the financial period. (written or artistic works) and industrial prop-
entrepreneur must take out such a policy when erty rights ( for example, patent rights, utility
an employee’s wages and salaries exceed EUR FIXED COSTS are the costs of a business that models, design rights, trademarks and rights
58.19 a month (2017 figure). are not dependent on the level of production to use a business name).
over a short time period and instead remain
ENTREPRENEUR This is an individual, who constant. Typically, fixed costs include, amongst INDIRECT PERSONNEL COSTS are statuto-
alone or together with others, engages in busi- other things, rental of premises, monthly wag- ry payments that a business must make to the
ness operations via an enterprise. The aim of es and salaries, bookkeeping and costs arising Finnish Tax Administration and to the pension
the operations is to make a business opportu- from the use of machines. and accident insurance company as well as to
nity profitable whilst being subject to various the unemployment insurance fund in addition
risks. Entrepreneurs are divided into self-em- FORM OF ENTERPRISE The forms of enter- to the gross salaries payable to employees. Indi-
ployed persons and traders. prise that can be registered in Finland are a rect personnel costs include social security, em-
private trader ( firm), general partnership, lim- ployee pension insurance, worker’s compensa-
EUROPEAN UNION MEMBER STATES (in ited partnership, limited company and co-oper- tion insurance, unemployment insurance and
2017): The Netherlands, Belgium, Bulgaria, ative, as well as the less common forms, public group life assurance contributions.
85
Guide
INNOVATIVE means new, novel or fresh. from day-to-day business income to be used to 7 percent. In commercial contracts, the penalty
cover the expenses of the enterprise. interest rate is the reference rate + 8 points. Be-
INTEREST is income, presented as a percent- tween 1 January and 30 June 2017, the said pen-
age, that is charged for use of money given as a NET OPERATING PROFIT is an item on the alty interest rate may be 8 percent.
loan. As a borrower and payer, it is worth choos- profit and loss account that is calculated by de-
ing as low an interest rate as possible, while as ducting variable costs, fixed costs and depre- PREPAYMENT OF TAX can happen when tax is
a depositor, it is worth searching for as high an ciation and write-downs from net sales. Net withheld from an employee in accordance with
income as possible for your money. A fixed in- operating profit is the profit on the business’s the personal withholding rate shown on the tax
terest rate stays the same for the whole loan pe- operations before distribution of profits. The card, or it may be an advance payment made on
riod, but a variable interest rate is linked to the distribution of profit shall here mean interests, receipt of an advance-tax bill.
reference rate of interest so that it is reviewed at taxes and dividends.
specific time intervals. The reference rate of in- PRICE Compensation payable in money for
terest may be, for example, the Euribor rate. Eu- NET PRICE The price of the product, from goods themselves, for use of them or for a ser-
ribor is a reference rate of interest that is pub- which all discounts have been deducted, or vice.
lished daily and that the banks use when they from which no further deductions are intended.
offer unsecured loans to other banks on the eu- PRODUCT LIFE-CYCLE A business’s products
ro money market. In practice, Euribor is the NET PROFIT (profit for the financial period) is have a life cycle which begins with development
interest rate used when a bank receives loans the profit of the enterprise after taxes and be- work and ends when sales of the product fall
from other banks, and the bank then lends fore appropriations. In other words, the turno- and keeping it as part of the range of products
these funds to others using an interest rate that ver shall be deducted with variable costs, fixed becomes unprofitable.
is higher than Euribor (Euribor + margin). costs, write-offs, depreciations, interest expens-
es and taxes. The net income may be a profit PROFIT Net operating profit is an item on the
INVESTMENT Long-term expenditure that is or a loss. profit and loss account that is obtained by de-
expected to generate income over a period of ducting variable costs, fixed costs and depreci-
more than one accounting period. An intan- NET SALES is the amount of money (net of ation and write-downs from net sales. Net oper-
gible investment may be in training, research VAT) that the business will earn from its operating profit is the result for business operations
or environmental protection. Tangible invest- ations, such as the sales of goods and services before the profit is distributed.
ments may be in machines and equipment, for during a given time period, for instance, in one
example. month or one year. Net sales is expressed with- PROFIT AND LOSS ACCOUNT This is part of
out any deduction for the variable or fixed costs a business’s financial statements. The other el-
LEASING FINANCE refers to long-term rental caused by sales. ements are the balance sheet, the annual re-
of fixed assets, i.e. a machine or appliance that port and the notes to the financial statements.
is acquired is not transferred into the user’s as- NETWORKING A network refers to collabora- The profit and loss account presents the income
sets. Instead the user pays for its use, and then tive partners who bring added value to an en- earned in the financial period, and the costs re-
it is returned to its owner. With leasing finance, terprise. You can also collaborate with compet- lating to the financial period, in the form of a
you are able to use a machine or appliance with- itors, and create, for example, a joint newspaper subtraction calculation. The profit and loss ac-
out committing a lot of money to it at the time advertisement. count shows the result for the financial period
of acquisition, i.e. it is cheaper than buying it. specified (profit or loss).
NOTES TO THE FINANCIAL STATEMENT
LINE OF BUSINESS This indicates what kind Notes are a statutory section of the annual ac- PROFITABILITY A business’s operations are
of business operations an enterprise engages counts complementing the numerical informa- profitable when the difference between the
in, for example, catering activities or retailing tion in the income statement and balance sheet business’s income and expenditure is positive,
of textiles. of the operations and financial position of the i.e. money is left for the business (profit).
company during the financial period that end-
LIQUIDITY means the ability of the business to ed. Small and micro enterprises are governed PROMISSORY NOTE A document issued for
meet payments when they become due. by a separate Decree (Decree on Information to a loan that shows the parties involved, the
be Presented in the Annual Accounts of Small amount lent, the payment schedule and the in-
LOGO This is the registered or established sym- and Micro Enterprises) explaining the contents terest payable on the loan.
bol for a business, via which customers distin- of the notes and the layout of the income state-
guish the enterprise from its competitors. ment and the balance sheet to be used in the PROPERTY GIVEN AS A CAPITAL CONTRI-
annual accounts. BUTION means assets put into a business as
MANAGING DIRECTOR or CHIEF EXECU- a non-monetary investment. Property given as
TIVE OFFICER (CEO) This person manages OFFER This is a binding proposal made to an- a capital contribution may only be assets that
the day-to-day administration of an enterprise other party (vendor or purchaser) to work out have a financial value to the enterprise. A com-
in accordance with the directions and regula- an agreement or deal, with the proposal con- mitment to perform work for the enterprise can
tions given by the board of directors. (S)he is taining the terms of the deal (such as price and not be regarded as property given as a capital
responsible for ensuring that the accounting is time of delivery). contribution. The subscription price of shares
in accordance with legislation and that the fi- can be paid as property given as a capital contri-
nancial management is organised in a reliable PENALTY INTEREST ON LATE PAYMENTS bution when a limited company is established.
way. The managing director or CEO must pro- The interest payable after the invoice payment Valuable work tools and a car to be used in the
vide the board and its members with the infor- date, i.e. the due date. This is an additional business, for example, can also be property giv-
mation that is necessary for them to take care charge that is levied if the initial sum has not en as a capital contribution.
of their duties on the board. been paid on the due date, at the latest. Accord-
ing to the Finnish Interest Rate Act, the con- PUBLIC RELATIONS A continuous activity
MISSION STATEMENT This is a description of sumer must not be charged a penalty interest via which an enterprise tries to gain the under-
the aim of the business’s operations, i.e. why the rate that is higher than the general, statutory standing and support of important groups, such
enterprise exists. The business idea is an opera- penalty interest rate. The penalty interest rate is as collaborative partners and customers. This is
tional plan that explains how the mission state- the reference rate specified every six months by abbreviated as PR.
ment will be implemented in practice. the European Central Bank + 7 % points. This is
the highest rate of interest that a business may PUBLIC SECTOR Municipal and state bodies
NET CASH FLOW FROM OPERATIONS This re- charge its consumers. Between 1 January and 30 that are responsible for tasks relating to man-
fers to the difference between income receivable June 2017, the said penalty interest rate may be agement of the country as well as teaching,
86
national defense and healthcare, amongst oth- SHARE This is a part of a limited company’s UNEMPLOYMENT BENEFIT Unemployed job-
er things. share capital. The shareholders own a certain seekers can be paid unemployment assistance,
number of shares, i.e. a part of the business. a basic daily allowance or an unemployment-
REFERENCE This gives details of the results of They have voting rights in the company accord- fund earnings-linked daily allowance by the So-
one’s previous work and of former or current ing to their ownership, and they can receive a cial Insurance Institution of Finland (Kela).
customers as evidence of one’s competency. dividend consistent with their shareholding, i.e.
compensation for the capital invested by them UNEMPLOYMENT FUND This pays its unem-
RETAILER This is an importer of goods or a in the company. The articles of association of ployed members an earnings-linked daily allow-
business that handles retail sales of products a limited company may specify what the vot- ance. It means that the size of the daily allow-
of industrial enterprises. ing rights of the shares are or the right to a div- ance depends on the previous salary earned.
idend. Joining an unemployment fund is voluntary.
SALES MARGIN Sales margin is that quanti- In Finland, there are separate unemployment
ty of money that the vendor has left when the SINGLE-ENTRY BOOKKEEPING See Book- funds for employees and entrepreneurs.
direct (variable) costs relating to creating the keeping
product or service have been deducted from VALUE ADDED TAX (VAT) is a tax on con-
the price paid by the customer. The sales mar- SME means small- or medium-sized enterpris- sumption which the consumer pays to a busi-
gin does not take account of the fixed costs of es. ness as part of the price for a product or ser-
the business. The lower the sales margin per- vice. The VAT is paid by the business to the
centage, the higher the net sales required by START-UP MONEY is discretionary support for Finnish Central Tax Administration. The entre-
the enterprise, so that operations are profitable. new full-time entrepreneurs. The support can preneur adds the VAT to the sales price of the
be applied for in Employment and Economic product or service. The general rate of tax (tax
SECURITY By obtaining a security, a lend- Development Offices. The application must be percentage) is 24 % in Finland. Businesses can
er tries to ensure that it will receive a balance made before commencement of the new busi- deduct the VAT on products or services bought
owed to it. An example is a two- or three-month ness’s operations. by them in their own accounting if the acquisi-
security deposit paid on a lease of premises. Se- tion is deductible in accordance with the leg-
curities can be divided into real securities and STATUTORY There is legislation that relates to islation. Only businesses listed in the register
personal guarantees. A real security relates to specific matters and explains how you should of those liable to VAT can make the deduction
an object-specific liability for debts where spe- act. For example, there are forms of voluntary mentioned above.
cific property has been entered as assets. insurance where the individual can decide for
A specific asset is assigned to cover the debt. A him/herself whether he/she takes out a policy, VARIABLE COSTS are material and outsourc-
personal guarantee means that a specific per- but statutory insurance is compulsory for eve- ing-service costs that vary according to the vol-
son becomes liable for the debt of another. ryone. ume of the product or service being sold. This
means that amount of money that is needed
SEGMENT This is a part of a specific entity. For STREAMLINING means reorganization of an when, for example, raw materials are bought
example, customers can be grouped into differ- enterprise. When a business is streamlined, for the product to be sold.
ent segments according to age, education and costs are cut back, for example, by reducing the
income level. Using segments, services or prod- labour force and trying to increase earnings WARRANTY During the warranty period, the
ucts and the marketing of these can be focused and improving the flow of capital. Corporate re- seller shall be liable for any defects or flaws in
on a specific customer group, and thus a com- structuring is a measure sanctioned by a court, the goods. Generally, the vendor gives the cus-
petitive advantage can be gained. via which the operations of a legal person that is tomer a new product in place of the faulty one
overburdened with debts are reorganized. Reor- or it returns to the customer the amount paid
SELF-EMPLOYED PERSON is an entrepreneur ganization proceedings may concern a private for the product. Warranty is not statutory but
who operates in his/her profession without a trader, a general partnership, a limited partner- giving a warranty is a voluntary benefit. If no
fixed workplace and without external manpow- ship, a limited company or a co-operative. warranty is given or if the warranty period has
er. Examples of people who might operate as a lapsed, the seller shall be liable for defects in ac-
self-employed person are a masseur/masseuse, SUBCONTRACTING is work procured from an cordance with the provisions on the liability for
a seamstress or a carpenter (NB: See definition independent manufacturer or supplier outside defects of the Consumer Protection Act.
of trader and double-entry-bookkeeping). the business.
WORKING CAPITAL Business operations re-
SELF-EMPLOYED PERSONS’ PENSION IN- TAX DEDUCTED AT SOURCE is a deduction of quire working capital. This is needed to pay
SURANCE (YEL insurance) is a mandatory form tax made from a salary or work remuneration. fixed costs, such as leases and wages & salaries.
of pension insurance for entrepreneurs, accord-
ing to which an old-age pension is paid to en- TERMS OF PAYMENT establish in an agree-
trepreneurs, as well as sickness benefit from the ment when and how the sales price is paid to
Social Insurance Institution of Finland (Kela, the vendor.
www.kela.fi), and maternity, special maternity
and paternity allowances and parental benefit TERMS OF SALE These concern the details to
or rehabilitation allowance. The entrepreneur’s be arranged for a deal, such as price, quality and
YEL insurance contribution is based on his/her time of delivery.
YEL work income. The YEL work income must
at least match that salary that would be payable THE FORCE OF LAW means that some deci-
to an individual possessing similar professional sion – a verdict of a court or some other resolu-
skills, if (s)he were employed in that work. Thus, tion of an authority – will become final and nor-
the YEL work income is not taxable income for mally it is not possible to appeal against this.
the entrepreneur or earnings generated by the
business. The minimum limit for YEL insurance TRADER This is an entrepreneur who has a
work income is EUR 7,645.25 per year (2017 fig- fixed workplace or who employs other staff.
ure). Guidelines on the determination of the A trader must use double-entry bookkeeping
entrepreneur’s work income are available from (NB: compare with a self-employed person). See
the website of the Finnish Centre for Pensions: Double-entry bookkeeping.
www.etk.fi > Pension Insurance > Insuring
in Finland > The Self-Employed..
87
Guide
Enterprise Agencies in Finland at

your service
ESPOO l YritysEspoo (Espoon Seudun Uusyrityskeskus ry)
HELSINKI l NewCo YritysHelsinki (Helsingin Uusyrityskeskus ry)
HYVINKÄÄ AND RIIHIMÄKI REGION l YritysVoimala Oy
HÄMEENLINNA l Hämeen Uusyrityskeskus ry
IMATRA l Imatran Seudun Kehitysyhtiö Oy
JOENSUU l Pohjois-Karjalan Uusyrityskeskus ry
JYVÄSKYLÄ l Keski-Suomen Uusyrityskeskus ry
KEMI-TORNIO l Meri-Lapin Startti ry
KESKI-UUSIMAA REGION l Keski-Uudenmaan Uusyrityskeskus ry
KOKKOLA l Keski-Pohjanmaan Uusyrityskeskus ry Firmaxi
KOUVOLA l Innovation Oy
KOTKA-HAMINA REGION l Cursor Oy
KUOPIO l Kuopion Seudun Uusyrityskeskus ry
LAHTI l Lahden Seudun Kehitys LADEC Oy
LAPPEENRANTA l Wirma Lappeenranta Oy
LOVIISA-PORVOO REGION l Kehitysyhtiö Posintra Oy
LOHJA-RAASEPORI REGION l Novago Yrityskehitys Oy
MIKKELI l Mikkelin seudun Uusyrityskeskus ry Dynamo
OULU l Oulun seudun Uusyrityskeskus ry
PIETARSAARI l Pietarsaaren Seudun Uusyrityskeskus Concordia
PORI REGION l Pizztech Oy
SAVONLINNA l Itä-Savon Uusyrityskeskus ry
SEINÄJOKI l Etelä-Pohjanmaan Uusyrityskeskus Neuvoa-Antava
SISÄ-SAVO l Kehitysyhtiö Savogrow Oy
TAMPERE l Tampereen Seudun yrityspalvelukeskus ry Ensimetri
TURKU l Turun Seudun yrityspalvelukeskus Potkuri
VAKKA-SUOMI l Ukipolis Oy
VAASA l Vaasanseudun Uusyrityskeskus Startia
VANTAA l YritysVantaa (Vantaan Uusyrityskeskus ry)
VARKAUS l Wäläkky Keski-Savon Uusyrityskeskus ry
There are 30 Enterprise Agencies in Finland with

altogether 84 service locations..
People contemplating or starting entrepreneurship may turn to 125 business
advisors and 1 300 experts for help. The network is supported by 1 000
undertakings and 270 associations. The advisory services have achieved ISO
9001/2008 quality certification.
The quality criteria of the Enterprise Agencies requires that of the enterprises
that have started through Enterprise Agencies over 90 percent are still in
operation after two years and 80 percent after five years.

NOTES
89
Guide
NOTES
90
NOTES
91
Guide
Operating model of
Enterprise Agencies
w Contacting
the Enterprise Agency
w w w w w
Advisor meetings
Expert visits
Business plan
Summaries and statements
Establishing a company
(or abandoning the idea)
w
Follow-up and possibly

development
Enterprise Agency
will assist you in creating
sustainable and profitable business!
www.uusyrityskeskus.fi

Becoming An Enterpreneur in Finland

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Starting the Running

• Starting te business • Invoicing and debt collection ... 68 uusyrityskeskus

Guide – Becoming an Entrepreneur in Finland 2017

PUBLISHER Suomen Uusyrityskeskukset ry/SUK-Palvelu Oy PRINTING Forssa Print

Should I become an entrepreneur? 7

In the case of unemployment benefits, an

8 Should I become an entrepreneur?

Should I become an entrepreneur? 9

Where to get the business idea?

Manage Your risks! them requires active following of the cor-

Completely new business idea or

10 Should I become an entrepreneur?

However, the acquisition of a working Answers by

The options are:

Anu Lehtola, Tampereen Seudun

Should I become an entrepreneur? 11

The various forms of entrepreneurship

12 Should I become an entrepreneur?

Should I become an entrepreneur? 13

Turning an enterprise idea into

Consider the following:

• CUSTOMER BENEFIT: What

14 Should I become an entrepreneur?

Everybody has ideas,

Before establishing a company 15

The plan goes through the features of

16 Before establishing a company

Model plan: It is worth

Before establishing a company 17

10. Estimates: Funding, Profitability and Sales

EXAMPLE OF AN INVESTMENT CALCULATION

18 Before establishing a company

EXAMPLE OF A PROFITABILITY CALCULATION (private trader)

** Entrepreneur’s unemployment benefit, minimum annual income.

Before establishing a company 19

EXAMPLE OF A SALES CALCULATION (MONTHLY)

Example of a SWOT analysis:

• strong expertise • insufficient personal funds

• globalization • entrepreneur’s ability to run the

Risk management 1 Set

22 Before establishing a company

Before establishing a company 23

• the person who applies for the

24 Before establishing a company

With Holvi’s business current from banking to invoicing and

Funding for a new business start-up

26 Before establishing a company

Before establishing a company 27

Several parties included in the net- Please note!

For more information on the Team Fin-

How can I assess how much

Timo Lehmusmetsä, Kouvolan Seudun

28 Before establishing a company

When developing your business idea,

Before establishing a company 29

Sales work is based on