188
[ESTABLISHING A BUSINESS ENTITY IN FINLAND]
The silent partner then earns profit for the assets contributed and acts in the role of outside investor and shall have the right to review the bookkeeping of the company. Note that there must be a continuity of operations and to establish a general partnership for a project, such as construction project, has not been accepted in taxation. Financial reporting Financial statements and consolidated financial statements must be prepared annually in accordance with the Finnish generally accepted accounting principles (GAAP). The financial statements must be submitted for publishing to the Trade Register if certain requirements are met: if a general partner is a limited liability company or if the turnover, size of the balance sheet and number of employees exceed certain thresholds. The Financial Statements must be submitted for publishing to the Trade Register six months after end of the financial period at the latest. Liability, Governance and Protection The general partners in both partnership entity types are liable for the decisions, obligations, liabilities and debts of the business, and thus if one partner makes a commitment, the others are also liable for it. Partnerships are thus considered to be the most suitable option for family enterprises as this business entity type requires a high level of trust among the partners. However, as mentioned above, agreements may be used to limit, for example, the liabilities of the partners. The general partners have a personal right and an obligation to decide on the matters of the business which is limited by the scope of business of the partnership. The operations and governance of a partnership are thus quite easy and informal. There are no specific provisions on the administration and governance in the
Partnership Act and the partners are quite free to set up the administration the way they want. The partners’ unanimity and the right and obligation to handle matters regarding the partnership are the main governing principles. The general partner has a veto right which means that a partner has the right to prohibit another partner from undertaking an individual measure. The silent partners do not have the above- mentioned rights, representation rights or veto rights, and usually they act more of as an investor in a partnership. Foreign Investment, Thin Capitalization, Residency and Material Visa Restrictions SIGNIFICANT BARRIERS TO ENTRY FOR AN OFFSHORE PARTY There are no significant restrictions on the number or nationality of shareholders. However, restrictions may apply to certain types of businesses. Since early 2022, the European Union has introduced extensive sanctions against Russia for its aggression against Ukraine. Also, the sanctions that were imposed in 2014 after the Russia took over Crimea are still in force. The sanctions include export restrictions, various restrictions on banks and the financial sector, and so-called sanctions lists requiring the freezing of assets and suspension of business activities against named individuals and companies. SPECIAL BUSINESS OR INVESTMENT VISA ISSUES It is not necessary for investors to have a visa to invest in Finland. If the owner would like to work or live in Finland, a residence or a work permit might be necessary. Visas are entry permits for a short, temporary visit of less than three months. If you plan to work or be an entrepreneur in Finland, you will usually need a
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator