When establishing a new enterprise in the Finnish market, it is possible to choose between buying an existing company and starting a new company. Both methods have their plusses and minuses. In this article we will provide a survey of which option would be most sensible for you.

In Finland the board of a limited company (Oy) must have at least one member and an alternate, whereas the latter would have the right of representation only if it is specifically granted to him or her. In order to grant an alternate the right of representation, only the corresponding box in the form must be checked and a separate document does not need to be drawn up.

At least one member of the Oy board of directors must be an EU citizen or possess an EU residence permit.

In both cases, €2,500 needs to be contributed to the share capital, the difference lies in when the payment needs to be made. When establishing a company, the payment must be made immediately. In the case of purchasing an existing Oy, an immediate payment is not necessary. The amount may remain in the till, but does need to be transferred to one’s account at the end of the year.

Since the share capital has to be paid immediately when establishing a new company, then a startup account must also be opened in a Finnish bank, and one must come to Finland to do this. After the payment of the share capital, it takes one to two weeks for the Oy to be entered in the register.

If an existing Oy is bought, immediate payment of the share capital is not necessary, and the sale can be concluded in writing without a notary being present. Therefore, you do not have to travel to Finland to purchase the company.  However, you do have to come to Finland to open the bank account. Once the purchase-sale transaction is completed and the documents signed, it will also take one to two weeks for the change to be entered in the register.

In summary, the time spent and the price of establishing a company is the same in both cases, but if it is impossible for you to come to Finland, purchasing an existing Oy is more sensible because you can conclude this transaction from abroad.  The purchase of an existing Oy is also more sensible if you cannot make the €2,500 payment immediately. An important plus of establishing a new Oy is that the company will not have any negative past history. If you wish to buy an existing company, you should ask to see the current balance sheet, annual report, and research the background of the company you plan to purchase in the registers and with the tax authorities.

Regardless of whether you decide to establish a new company or purchase an existing one, the next step is to decide whether to register the company with the Finnish tax authorities. The registrations to be made with the tax authorities include the registration of a VAT number and registering as an employer, and/or in the income tax prepayment register. Even if you buy a company that has a VAT number, you may still have to deal with the tax authorities. Therefore, it is sensible to file an initial application for your new company with the pertinent information.

1Office Finland Oy will be happy to help you establish a new company or sell you an off-the-shelf company, which has no prior activities.