Foreign entrepreneur in Finland: Business ID, residence permit, bank account and taxes

Who may start a business in Finland?

Under the Business Operations Act (elinkeinotoimintalaki 565/2023), the right to carry on a business depends on where you live, not on your citizenship. A natural person resident in the European Economic Area (EEA) may do business without a separate permit. Someone living outside the EEA needs a permit from PRH. The right to stay in Finland is a different matter, decided by Migri.

EU and EEA citizens

A citizen of an EU or EEA country does not need a residence permit to work as an entrepreneur in Finland. If you stay in Finland for more than three months, register your right of residence with Migri. If you live in Estonia, for example, and set up a sole trader business (toiminimi) in Finland, your residence is in the EEA: you need no PRH permit and no separate representative in Finland.

Coming from outside the EU/EEA

• If you move to Finland to be an entrepreneur, you need a residence permit that allows business activity. According to Migri, for the residence permit for a self-employed person the business must be profitable and your livelihood must be secured by income from it. You cannot apply for this permit as a light entrepreneur (kevytyrittäjä) working through an invoicing service.
• Growth companies have a separate start-up permit. It first requires a positive eligibility statement from Business Finland.
• If you already live in Finland on another permit, check with Migri whether your permit allows business activity or whether you need a new one.
• According to PRH, people from Ukraine who have Migri’s decision on temporary protection do not need a PRH permit for a sole trader business. The Finnish personal identity code comes with the decision.

Conditions, fees and processing times for residence permits change, and every case is decided individually. Check your own situation with Migri before you commit to anything such as a lease or equipment purchases.

Living outside the EEA: PRH permits

Sole trader (toiminimi)

If your permanent residence is outside the EEA, you need a PRH permit before you can file the start-up notification for a sole trader business. The application costs 150 euros plus a 6.50 euro invoicing charge. The business must then be entered in the Trade Register, and it needs a representative living in Finland who can receive summonses and other notices. PRH’s published practice mentions only people living permanently in Switzerland, who have been granted permits based on the Lugano Convention; other cases are decided case by case. Under section 3(2) of the Business Operations Act, PRH must grant the permit if, based on the information provided, the trader can be reached for fulfilling the obligations of the business. Someone living in Russia, for example, should still be prepared for the permit not being granted.

Limited company (osakeyhtiö, Oy)

• Under the Limited Liability Companies Act, at least one board member must reside in the EEA unless PRH grants an exemption. A board with fewer than three members must have a deputy member.
• In PRH’s practice, at least one ordinary member and, if there are deputies, at least one deputy must live in the EEA. Otherwise a permit is needed for all ordinary members or all deputies.
• If the company has a managing director, they and any substitute must live in the EEA, or a PRH permit must be applied for.
• The permit costs 150 euros for each person it is applied for, plus a 6.50 euro invoicing charge per application. For three board members that is 450 euros plus 6.50 euros.
• PRH does not grant a permit if, for example, all board members live in Russia or Australia, or if the only ordinary member lives in Australia and the deputy in Finland. A deputy living in Finland does not solve the problem on its own.
• The company must have a representative living in Finland to receive summonses, unless an EEA-resident board member, deputy, managing director, authorised signatory or procurator is entered in the Trade Register.

Business ID and registers

1. 1Sole trader: you can get a Business ID (Y-tunnus) in MyTax (OmaVero), in which case the business is entered only in the Tax Administration’s registers. Registering in the Trade Register through the YTJ service costs 75 euros, and it is compulsory if you live outside the EEA. A sole trader can still file on paper form Y3.
2. 2A limited company is always set up in the YTJ service, and from 2026 only electronically. The guided set-up costs 300 euros but requires, among other things, that every person named has a Finnish personal identity code. Otherwise you file the regular start-up notification for 400 euros. It must be filed within three months of signing the memorandum of association, or the formation lapses.
3. 3Prepayment register: voluntary, but without it your customers must withhold tax from payments for work (13 % from a company, 60 % from a sole trader without a tax card). A new entrepreneur may find it hard to get assignments without it.
4. 4VAT register: compulsory when turnover exceeds 20,000 euros in a calendar year. VAT is due from the moment the threshold is exceeded, so register in good time. The general rate is 25.5 %. Below the threshold you can register voluntarily.
5. 5Employer register: only if you are a regular employer, for example when you pay wages permanently to at least two employees. Do not register if the only people working in the business are you, your spouse or your child under 15.

If you file electronically, you get the Business ID at once. Entry in the Tax Administration’s registers takes about three weeks.

Personal identity code and e-identification

A Finnish personal identity code (henkilötunnus) is issued when you are entered in the Population Information System. Depending on your situation you can request it from the Digital and Population Data Services Agency (DVV), a tax office, a Finnish mission abroad or Migri, and you must visit in person. The code is needed, for example, to open a bank account, and Finnish strong identification methods, such as online banking codes and mobile certificates, are tied to it. According to Suomi.fi, you can also get one during a short stay in Finland if needed.

Without Finnish identification your options are limited. An e-ID from another EU country only works in services that accept it, and you are then not linked to a Finnish personal identity code. In MyTax, an EU e-ID lets you send a contact request and use the service in a limited scope.

Since 1 January 2026, companies’ Trade Register filings, for example those of a limited company, must be electronic even when none of the responsible persons has a Finnish personal identity code. Mandatory e-filing does not apply to sole traders. According to PRH, the options are:

• An authorised contact person with a Finnish personal identity code and Suomi.fi identification files on the web form, with a power of attorney or a Y form signed by a responsible person attached.
• A responsible person with an e-ID from certain EU countries uses the web form for foreign identification (Ulkomaalaisen tunnistustapa). The list includes Estonia, Latvia, Lithuania, Poland, Sweden and Germany, among others.
• A member of the Finnish Bar Association (Suomen Asianajajat) can sign the filing in the YTJ service.
• By post only if nothing else is possible, with an explanation of why electronic filing cannot be done.

Business bank account

Under the Anti-Money Laundering Act (rahanpesulaki 444/2017), banks must know their customers. They have to identify the customer and the company’s beneficial owners and find out the nature and scale of the business and the origin of the funds. When the owners or the money have ties abroad, the checks are often more thorough, and opening an account can take weeks.

• Allow time and apply as soon as you have the Business ID. Without a business account it is hard to start invoicing and keep the books.
• Have ready your passport, residence permit or registration of right of residence, Business ID or Trade Register extract, a short description of the business and its customers, and an explanation of where the start-up capital comes from.
• Answer the bank’s questions precisely and in writing. Vague answers prolong the review.
• Keep business and personal money apart from day one. In a limited company this is essential, and in a sole trader business it makes bookkeeping and tax much easier.

Taxation in brief

• You are resident in Finland for tax purposes if you have your actual home here or stay here continuously for more than six months. Temporary absences do not break the stay. You then pay Finnish tax on all your income, including income from abroad. A tax treaty may decide which country has the right to tax.
• A sole trader’s profit is your personal income and is taxed progressively. You cannot pay yourself a salary. Prepayment tax is not imposed automatically: you must apply for it yourself in MyTax.
• A limited company pays 20 % corporate income tax on its profit. You pay personal tax when you take a salary or dividends from the company.
• YEL pension insurance is compulsory for an entrepreneur who lives and works in Finland, and also for one living in an EU or EEA country if Finnish social security legislation applies to them. Which country’s insurance applies is determined by EU rules. YEL must be taken out within six months of starting. Limits and contributions are in our separate YEL guide.
• If you work in Finland through an Estonian OÜ, registration and taxation work differently. We cover that in a separate guide on Estonian OÜs in Finland.

Common mistakes

• Making financial commitments such as a lease, purchases or contracts before checking your permit route with Migri. The business usually has to be registered before an entrepreneur’s permit is granted, but a Business ID alone gives no right to live in Finland.
• Assuming that Finnish citizenship or a deputy board member living in Finland is enough. Whether a PRH permit is needed depends on residence and the composition of the board.
• Choosing the 300 euro guided set-up although someone has no Finnish personal identity code.
• Missing the three-month deadline after the memorandum of association, so the formation lapses.
• Not applying for prepayment tax, so the tax falls due in one go as back taxes.
• Registering for VAT only after the 20,000 euro threshold has already been exceeded.
• Not allowing time for the bank account, so the first customer payments go to a personal account.
• Forgetting YEL in the belief that it only concerns Finns.

Step-by-step checklist

1. 1Clarify your right of residence: registration with Migri for EU and EEA citizens, otherwise whether you need a residence permit that allows business activity.
2. 2Choose the business form: sole trader or limited company.
3. 3Check where you and the other responsible persons live. Apply for a PRH permit and appoint a representative in Finland if needed.
4. 4If you live in Finland, get a personal identity code and a strong identification method. Otherwise decide who will file on your behalf.
5. 5File the start-up notification and register at the same time for the registers you need: prepayment, VAT and employer.
6. 6Open the business bank account and allow time for it.
7. 7Apply for prepayment tax in MyTax based on your estimated profit.
8. 8Take out YEL within six months and consider other insurance.
9. 9Arrange bookkeeping before the first invoice and keep all receipts.

Information checked in November 2026: PRH start-up fees 75 euros (sole trader), 300 or 400 euros (limited company), permit for persons living outside the EEA 150 euros plus a 6.50 euro invoicing charge, VAT registration threshold 20,000 euros and corporate income tax 20 %. Sources: Business Operations Act (565/2023), Limited Liability Companies Act (624/2006), Income Tax Act (1535/1992), Anti-Money Laundering Act (444/2017), PRH, the Tax Administration and Suomi.fi. Residence permits are decided by Migri.

We help you start right

Tilitoimisto Debit Credit helps foreign entrepreneurs choose the business form, file the start-up notification and registrations and apply for prepayment tax. We keep the books, file the VAT returns and prepare the financial statements, and our clients can send their receipts through the Vaavo app. We work in Finnish and Russian. Get in touch before you register, and we will go through the steps together.

Official sources

• PRH: permit for a sole trader living outside the EEA
• PRH: permits for persons living outside the EEA (limited company)
• PRH: Trade Register filing without Finnish identification (in Finnish)
• PRH: start-up fees
• PRH: start-up notification for a private trader
• Tax Administration: start-up notification and registers
• Tax Administration: tax guide for new entrepreneurs
• Tax Administration: VAT registration
• Tax Administration: prepayment register
• Tax Administration: residency and nonresidency in Finland
• Tax Administration: using MyTax as a foreign individual
• Finlex: Business Operations Act (565/2023), in Finnish
• Finlex: Limited Liability Companies Act (624/2006), in Finnish
• Finlex: Income Tax Act (1535/1992), section 11, in Finnish