FINLAND

ABOUT FINLAND

Finland at a Glance
Finland, officially known as the Republic of Finland is the eighth largest country in the entire Europe. Finland has a highly sophisticated industrial economy with an exuberant private sector coupled with a kind of business environment that many foreign investors may find attractive. The logistics and modern infrastructure are an added advantage for Finland. It has 24 airports and businesses are well served by its excellent railway lines and roads. It also has a huge network of canals, sea lanes and waterways. This top-rated infrastructure really makes the country a popular gateway to the East as it acts as the main direct route between Asia and Northern Europe.
Apart from having a state of the art infrastructure, Finland also has a huge reserve of natural resources. Finland has huge resources of copper, gold, timber, silver and limestone. Apart from these, the Finnish land is also blessed with natural resources such as iron, zinc, lead and chromium throughout the country.

Population: 5.48 million
Form of government: Republic
Official & spoken languages: Finnish (87%) and Swedish (5%), Spoken Russia 2% from population
Currency: EURO €
Time zone: UTC +2
GDP (PPP): $ 270 billion
GDP (PPP)/per capita: $ 49.146
Public debt: 57% of GDP (national debt clock)
Average salary: 3.508€/month
Unemployment: 8.1% (Oct 2016)
Major trading partners: Germany, Russia, Sweden, Netherlands, China, USA, UK, France, Estonia

Doing Business in Finland
Advantages of doing business in Finland
Well functioning and highly developed infrastructure
Advantageous taxation for multinational corporations and holding companies
Highly educated workforce easily available
Member of EU and EURO
Disadvantages of doing business in Finland
Large public sector and high public dept cause unpredictability when it comes to law changes and operational environment in general
Complicated bureaucracy slows down many business operations
High cost of work force and strong unions make hiring risky
Small home market and poor buying power in compared to many other western countries
High consumption of Alcohol, mental health problems and extremely low threshold for staying home when sick causes reduction of productivity.
Residence & Moving to Finland
Advantages
Finland is very safe
High social security
Free education
Disadvantages
High cost of living and taxes
Lots of rules and laws that affect directly to personal freedom
Difficult to operate without speaking Finnish
Taxation in Finland
Corporate taxation in Finland (Ltd and Plc)
Residence: A company is resident if it is registered (incorporated) or otherwise established under Finnish law. The Finnish tax authorities may register a foreign entity in Finland without any notice given.
Basis: Residents are taxed on worldwide income; non-residents are taxed only on Finnish-source income attribute to their Finnish permanent establishments. Foreign-source income derived by residents is subject to corporate tax in same ways as Finnish-source income. Branches generally are taxed according to the same principles applicable to subsidiaries.
Taxable income: Corporate tax is imposed on a company’s profits, which consist of business income, passive income and capital gains. Normal business expenses may be deducted in computing taxable income. Complex rules govern the deprecation of assets.
Taxation of dividends: Dividends received by a Finnish resident company from another Finnish company generally are exempt from tax with certain exceptions, as are dividends received by a Finnish company from a company in an EU/EEA country. Dividends received from all other countries generally are taxable.
Capital gains: Capital gains generally are treated as ordinary income and taxed at the standard corporate tax rate of 20%. However, gains on qualifying holdings are exempt in certain conditions are satisfied.
Losses: Losses may be carried forward for 10 years. The right to carry forward tax losses is forfeited if more than 50% of the shares of the company were transferred during or after the year in which the losses were incurred. Further, if more than 50% of the shares in a company that owns at least 20% of the shares in a the Finnish loss-making company have been transferred, the relevant portion of the shares in the Finnish loss-making company are deemed be transferred. The carryback of losses is not permitted.
Foreign tax credit: Foreign tax paid may be credited against Finnish tax assessed on same profits, but the credit is limited to the amount of Finnish tax payable on the income. The credit may be carried forward for five years.