How to Register a Business in the US from Finland

Step 1: Benefits of starting your US business from Finland

Starting a US business from Finland offers a wealth of opportunities for entrepreneurial-minded individuals. One of the key benefits is access to the vast and dynamic US market, which is one of the largest consumer markets in the world. With a population of over 330 million people and a high GDP, the US presents significant potential for business growth and revenue generation. Finnish entrepreneurs can leverage advanced digital infrastructure and e-commerce platforms to efficiently reach American consumers, fostering business scalability and global reach.

Moreover, the regulatory environment in the US is conducive to foreign businesses. The country offers various incentives, grants, and a relatively straightforward process for establishing a company. Finnish business owners can benefit from a robust legal framework that protects intellectual property and encourages innovation. Additionally, by establishing a US presence, businesses can build stronger partnerships and networks with American companies, further enhancing their credibility and expanding their operational capabilities. This strategic move positions Finnish businesses favorably in the competitive international market landscape.

Step 2: How to start your US business from Finland

Starting a US business from Finland can be an exciting opportunity to expand your market and leverage the dynamic US economy. To begin, you'll need to decide the structure of your business. Common options include a corporation (C-Corp or S-Corp) and a Limited Liability Company (LLC). Each structure has different tax implications and legal requirements, so it's important to choose the one that best suits your business goals. You will also need to select a state in which to register your business. Popular states for foreign businesses include Delaware, Nevada, and Wyoming due to their business-friendly regulations.

Once you've decided on your business structure and state of registration, the next step is to obtain an Employer Identification Number (EIN) from the IRS. This can be done online and is essential for tax purposes. Additionally, you may need to appoint a registered agent based in the U.S. to handle legal documents and official mail on behalf of your business. Lastly, ensure that you comply with any specific state regulations and obtain necessary licenses or permits to operate legally. By carefully planning each step, you can successfully establish a US business from Finland and tap into new growth opportunities.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Finland

Understanding Compliance Requirements for Running a US Business in Finland

Starting a business in Finland as a US-based company involves a myriad of compliance requirements. Understanding these requirements is crucial for ensuring smooth operations and avoiding legal pitfalls. Below are various considerations to keep in mind when establishing a presence in Finland.

Legal Structure and Registration

Choosing the right legal structure is the first step. Finnish business entities differ from those in the US, and common structures include:

• Limited Liability Company (Oy) - The most common choice for foreign businesses.
• Branch Office - A less common option but suitable for certain types of operations.

Registering your company involves multiple steps, including completing the Trade Register application and obtaining a Finnish Business ID.

Taxation

Understanding Finnish tax obligations is vital. Key points include:

• Corporate Tax - Finland has a flat corporate tax rate of 20%.
• VAT - The standard VAT rate is 24%, with reduced rates for certain goods and services.
• Tax Treaties - Finland and the US have a tax treaty to avoid double taxation.

Employment Laws

If you plan to hire employees, compliance with Finnish labor laws is necessary. Points to consider are:

• Employment Contracts - Contracts must follow Finnish labor regulations and can be either fixed-term or indefinite.
• Employee Rights - Includes rights to a safe working environment, minimum wage, and annual leave.
• Social Security Contributions - Employers must contribute towards the Finnish social security system.

Data Protection and Privacy

Finland, being an EU member, follows the General Data Protection Regulation (GDPR). This affects how you handle customer and employee data:

• Data Processing - Compliance with GDPR mandates transparent data collection and processing practices.
• Data Security - Implementing robust security measures to protect sensitive information is essential.

Permits and Licenses

Depending on the nature of your business, specific permits or licenses may be necessary:

• Industry-Specific Licenses - Healthcare, food services, and other regulated industries require special licenses.
• Operational Permits - General operational permits could be required for construction, waste management, etc.

Local Business Culture

Understanding and integrating into the local business culture can facilitate smoother operations:

• Language Barrier - While many Finns speak English, knowing Finnish can be beneficial.
• Business Etiquette - Finnish business culture values punctuality, transparency, and straightforward communication.

By carefully considering these areas, a US company can successfully navigate the compliance landscape in Finland and build a profitable and legally compliant business.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Finland

Understanding Tax Obligations for Running a US Business in Finland

Operating a US-based business in Finland involves navigating a complex tax landscape. Here are key considerations to keep in mind:

Corporate Tax Residency

Determine if your business is considered a resident of Finland for tax purposes. Generally, a foreign company is treated as Finnish if it has a permanent establishment (PE) in Finland. This status affects how your business income is taxed.

Double Taxation Treaty

The tax treaty between the US and Finland aims to prevent double taxation. It provides rules on which country can tax various types of income, potentially reducing overall tax liability. Review the treaty to understand your obligations and benefits.

Value-Added Tax (VAT)

If your business sells goods or services in Finland, you're likely subject to Finnish VAT. Register for VAT if your sales exceed the threshold. The standard VAT rate is 24%, with reduced rates for specific goods and services.

Payroll Taxes

Employers must withhold Finnish income tax and social security contributions from employees' salaries. This is on top of the employer's own contributions. Compliance with these regulations is crucial to avoid penalties.

Transfer Pricing

For businesses involved in transactions with related entities, Finnish tax authorities require arm's length pricing. Ensure your transfer pricing documentation is robust and complies with both US and Finnish regulations.

Accounting Standards

Understand that Finnish financial reporting standards may differ from those in the US. Adapting to these standards will likely require adjustments in your accounting practices and financial statements.

Filing Requirements

Familiarize yourself with Finnish deadlines for tax filings and payments. Delays can result in interest charges and penalties. Utilize local tax advisory services if needed to stay compliant.

Local Tax Incentives

Explore available tax incentives for businesses operating in Finland, such as R&D credits and other subsidies. Taking advantage of these can help reduce your overall tax burden.

In conclusion, running a US business in Finland requires thorough understanding and compliance with both local and international tax laws. Consider consulting with tax professionals familiar with cross-border issues to ensure your business adheres to all relevant regulations.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country