Establishing a company in Finland and business plan creation

A business plan is one of the most important and useful tools for a beginner entrepreneur who is just planning to start his own business and for an active businessman who is looking for ways to find investors or get an additional financing to develop his own business.

The business plan allows you to think ahead about future actions for the implementation of your project. Developing a good business plan is not quite difficult: creating a business plan and its structure, analyzing the market and competitors, finding a break-even point and determining profit taking into account various risks.

What is a business plan?

1. A written plan of business
2. Describes how to start a business idea in practice
   • the company's operating environment
   • modes of operation and
   • objectives.
3. Comprehensive, detailed and time-limited presentation
   • longer-term goals
   • quantitative targets, for example in the form of earnings budgets and financial statements
4. A planning tool for the entrepreneur himself
5. Negotiating tool when discussing with potential investors, financiers, business partners, landlords or suppliers

With a business plan a starting entrepreneur can:

• prove that the company is successful
• show the company's profitability and prospects and makes it easier to get funding
• get start-up money from TE's office or business support from the ELY Center. Read more about Funding a new business and find all the useful links on our website in the section Resources. How to set up and start business in Finland.

In the business plan you can:

1. go through:
   • business idea
   • entrepreneur's knowledge and education
   • product / service features
   • customer groups / markets
   • market competition / competitors
   • marketing
2. estimate using calculation:
   • the funding needed to start a business (investment need)
   • profitability, sales
   • risk factors that may affect the company's success
   • other factors affecting entrepreneurship

Finding a business idea and its testing

Finding the right business idea is a crucial point in successful entrepreneurship. The things you might always remember and take into account when you have decided to start a new business:

• The most important thing for an entrepreneur is to keep the eyes open and know how to follow the most significant trends in the scope of their businesses.
• What kind of gaps and problems exist in the sphere of your business now?
• Could your company solve that problem and how you are going to do it? How your company can solve that problem?
• There must be a well-marked reason for the company to exist.
• The new product or service must be so useful for potential customers that they are willing to buy it.
• The potential customer base must be large enough for getting a profitable business.

Business idea testing

The content of the business idea can be described, for example, with the following questions:

• What does the company produce, what kind of services does it has? What benefit does the customer receive and what types of needs the idea can fulfill? What are the markets?
• For whom the company services are intended, and which target groups will use them. Who are your customers?
• How does the company work, what are the company’s principles? How a business idea can help you to earn money?

Business Concept Model

Using the Business Concept Model, you can picture how your business will operate. A business concept is a connecting link between your idea and future business plan.

Protecting the business idea

Did you get the idea? Did you make the invention? You have to think how to protect your business idea! The idea cannot be patented if it is just a wish or a dream about a product. You can consult your nearest ELY center or PRH (Finnish Trade Register) for advice.

You got a brilliant idea. You wonder if you can patent it so that others will not benefit from your good idea. If your idea is at intention stage, you still do not have the invention for which you could get a patent. When you have thought about the details of your invention up to the technical solutions, you can apply for patent protection.

1. Method of protecting the business idea №1 - Patent

• The exclusive right granted to the inventor prohibits others from using a patented idea; time-limited, up to 20 years of protection
• The patent is only granted to the new invention
• Find out if your invention is the new one
• Data search can be started at Google and continue with patent information from the Espacenet database
• PRH (Finnish Trade Register)

2. Method of protecting the business idea №2 - Design right

• The form of design protection, which protects from the appearance of the same product and gives you exclusive rights for it.
• The object of protection is always visible
• The goal is to encourage designers to design and support those who are willing to invest in design results
• PRH (Finnish Trade Register)

3. Method of protecting the business idea №3 - Utility Model

• The holder is entitled to prohibit the professional exploitation of his invention by others.
• The utility model can be, for example, a technical solution.
• PRH (Finnish Trade Register)

4. Method of protecting the business idea №4 - Trademark "TM"

• It allows the goods to be distinguished from similar products which produced by other traders
• If you have invented a name, immediately start using the trademark symbol TM-symbol, even if the trademark application is pending!
• PRH (Finnish Trade Register)

5. Method of protecting the business idea №5 - ® sign

• Should only be used with registered brands
• A trader can protect his brand by seeking registration
• PRH (Finnish Trade Register)

The New Finnish Trademarks Act (in Finnish, Tavaramerkkilaki 544/2019) entered into force on 1 May 2019. Read about the changes at PRH (in English) or at Finlex (in Finnish)

Different forms of entrepreneurship in Finland

To start a new business, you have to choose the entrepreneurial form. There are several forms of entrepreneurship in Finland:

What kind of company would I set up? Company forms

The nature of the company's future operations will have a major impact on the choice of business form. The necessary starting capital and the number of people involved in the company establishment have their own significance. The limited liability company, the general partnership, the limited partnership and/or private entrepreneur have different terms of taxation.

When choosing a business form, you must take into account the following:

• The size of the company / its scope
• Capital needs
• Risks
• Distribution of profit
• Taxation
• Reliability (Imago)

Which business form? There are two company forms:

1. Companies where there is an entrepreneur's personal responsibility for the company's commitments:

• Private trader
• General partnership
• Limited partnership

Private traders (“toiminimi", “tmi" or “yksityisliike")

• No needs in the charter / constitutional documents or authorized capital to set up firm
• The notice to Trade Register is enough
• The trader makes commitments and concludes all contracts under his own name
• The trader/entrepreneur is responsible for the commitments he has made both by the property of the company and by his personal property
• The code (Y) is not required. In practice, "Tmi" or "Toiminimi" is often used
• Private traders: "Tmi" or "Toiminimi” forms is the most natural for a small business when an entrepreneur works alone or with his / her spouse and has a fixed purchase or sales place or other working place and is engaged in the business enterprise.
• All measures related to the establishment are simple and take a little time; registration fee as well as the Y3- form of the taxpayer announcing about the starting of operations is sufficient to do

General partnership (Avoin yhtiö or AY)

• General partnership company is created when two or more partners agree to pursue a business to achieve a common purpose and conclude a partnership agreement
• One partner cannot set up such a company
• If the number of shareholders falls, for example when the shareholder leaves or dies, the company may operate for a maximum of one year as an General partnership company
• A partner can be either a natural person or an entity, for example a company
• All the partners are personally responsible for the company's debts and other obligations both of their own and other partners
• The partners’ surnames, for example “Kultanen & Sjölund" are accepted as a company name. You should not give such a name as " General partnership company". Capital is not needed

Limited partnership (Kommandiittiyhtiö or KY)

• A limited partnership is established by a written agreement signed by all shareholders
• The contract is almost identical to a General partnership company
• The additional instructions deal with the silent partner's contribution and dividends payable to him
• There is at least one responsible partner and one silent partner
• The silent partner's responsibility is limited to his capital investment
• The Limited partnership company or Ky. The company name cannot get the name of the silent partner

2. Companies with authorized capital

• Limited liability company
• Co-operative

Limited liability company (Osakeyhtiö or OY)

• The most common forms of business in Finland
• The shareholders are only responsible for the company's obligations within the amount that they invested into the company
• The shareholders certify to the number of shares by signing a treaty
• Limited liability company or OY
• According to the law, a limited liability company may be either Private or Public
• The Limited liability company Act (Osakeyhtiölaki) applies to both public and private limited liability companies
• The special features of a public limited company are mentioned only in some parts of rules that concerns limited liability company

• The shares of a private limited company cannot, by law, be subject to public trading
• A private limited liability company is typically owned by defined owners and free transfer or convertibility of the shares into the ownership is restricted by the terms and conditions of the charter
• The private limited company has a minimum of 2 500 € share capital.
  _{Update: From 1 July 2019, the mandatory share capital requirement of 2500 euros is not required}

• Public limited company shares may take part in public trading, so their free sale and convertibility must not be restricted
• A public limited liability company's law stipulates a minimum capital requirement of 80,000€

Co-operative (Osuuskunta or OSK)

• The formation of co-operative requires at least three founding members
• The co-operative is a community in which the number of members and the amount of capital are not predetermined
• The purpose of cooperatives is to support the livelihoods of members. The members of the cooperative can use the services provided by the company
• The membership fee is the same for all members
• Co-operative (Osuuskunta), briefly "osuus” or osk
• The name must not contain the person name

There are two other еntrepreneurship forms more detailed: Franchising and Freelance

Franchising

• Franchising companies are the chain companies in which an entrepreneur work according to predetermined business concept
• The entrepreneur usually pays an ongoing franchise fee or royalty. As a result, he gets the ready and developed business idea
• All the skills needed for business can be purchased
• Joint marketing, brand and internal purchases
• May be a joint financial administration or other support function

Freelance

• An independent worker who perform short-time work
• One or more employers simultaneously
• Can be either an entrepreneur, an employee or
• Can get a so-called labor compensation without being an entrepreneur or in an employment relationship
• The temporary job and the freedom of the freelancer to work quite freely with the various contractors
• The performance of work can be purchased from the freelancer when needed without any commitment to a regular payroll

The establishment of the company. Select a company name

Read the Company name instructions. Naming your business can be a difficult process that take a lot of time. How to choose the memorable and powerful name that will best represent your company brand? Here are some tips for choosing the perfect name. The Good names have to be:

• Short (minimum 4 letters)
• Creates positive images (Meri-Eira, Terveystalo)
• Personal (Dell, Ford, Heinz)
• Combines product and company (Noiro = Lumene)
• Sufficiently surprising
• Refers to product category (Rautia)
• Rhythmic (Coca-Cola)
• Available from the beginning of the alphabet (a, e-, i-beginning)
• Name associated with story (Mehiläinen)

10 conditions of the Business name

1. The name must be unique and correspond to the specified rules of registration
2. Spoken (Merlot wine)
3. Pronounce in Finnish; easily changeable
4. Pronounce in English; without Scandinavian characters
5. No double meaning, "Nothing sucks like Electrolux"
6. No misrepresentation
7. The name may not be a number
8. The name may not be general
9. The name should to be consistent with prevailing fashion and should not restrict your business (e.g. do not give the name according to the district where your office is situated, because you can move in the future)
10. The name must be relevant (should not be childish or too playful)

If you have invented a name, immediately start using the trademark symbol TM-symbol, even if the trademark application is pending!!!

• Shiller PE Ratio: Briefly About The Main

  Shiller P/E Ratio (also known as the Shiller P/E or PE 10 Ratio, CAPE Ratio or Cyclically Adjusted Price-to-Earnings ratio)

• Beneish M-Score: Calculations, Result Interpretations

  Beneish M-Score is a mathematical model that includes 8 financial ratios on the basis of which it is possible to identify if company's reported earnings have been manipulated.

• Finnish Tax 2026: Key Changes

  In 2026, Finland plans to ease the tax burden by lowering the reduced VAT and top income tax rates while increasing inheritance tax thresholds, though these changes will be offset by the removal of several popular individual tax deductions.

We use cookies to improve your experience on our website. By browsing this website, you agree to our use of cookies and privacy policy. Read more

Would you like to get in touch? We are happy to hear from you! Here's how you can reach us...

• Email
• Twitter
• Facebook
• vkontakte