Branch or subsidiary in Finland: which suits a foreign company
A foreign company can do business in Finland through a branch or through a subsidiary. A branch is part of the foreign company itself: it registers in the Finnish Trade Register for 400 euros, and the parent company is liable for everything it does. A subsidiary is a separate Finnish limited company (Oy), registered for 300 or 400 euros, whose liability is its own. Both pay Finnish corporate income tax of 20 % on profits made in Finland.
Side by side
| Branch (sivuliike) | Subsidiary (Oy) | |
|---|---|---|
| Legal status | part of the foreign company | a separate Finnish company |
| Liability | the parent company is liable | the subsidiary is liable; the parent risks its investment |
| Registration fee | 400 € | 300 € guided online package, otherwise 400 € |
| Representative | a person resident in the EEA, or in Finland if the parent is from outside the EEA | its own board, and a managing director if it has one |
| Permit | needed from PRH if the parent is from outside the EEA | none if at least one ordinary board member lives in the EEA; see our guide for foreign founders |
| Financial statements | the parent's, filed within six months | its own Finnish statements, filed within eight months |
| Tax on Finnish profit | 20 % | 20 % |
A branch
A branch carries on business in Finland in the name of the foreign company. It must be registered in the Trade Register before it starts operating, and it needs a representative who can receive legal documents on the company's behalf. If the parent is from outside the European Economic Area, it also needs a permit from the Finnish Patent and Registration Office (PRH) to set up the branch.
Each year the branch files the parent company's financial statements with the Trade Register within six months of the end of the financial period, in an official EU language when they were drawn up under EU rules. Its Finnish profit is taxed in Finland, so it keeps records of the Finnish business. It registers for VAT and as an employer just as a Finnish company does.
A subsidiary
A subsidiary is an ordinary Finnish limited company that the foreign company owns. It keeps its own books, files its own financial statements with the Trade Register within eight months, and pays 20 % tax on its profit. Its debts are its own: the parent risks what it put in, unless it has given guarantees. When the subsidiary pays a dividend to its foreign parent, Finnish withholding tax may apply; within the EU it is often zero, and tax treaties reduce it elsewhere, so check the rule for the parent's country. Registration costs are in our article on company registration costs.
Which one to choose
- Testing the market, with little risk: a branch is lighter to run and uses the parent's existing accounts.
- Contracts, staff, premises or Finnish customers who want a Finnish counterparty: a subsidiary keeps the risk in Finland and looks local.
- Plans to bring in Finnish partners or to sell the Finnish business later: only a subsidiary has shares to sell.
Either way, the Finnish business needs bookkeeping, VAT returns and, once people are hired, payroll. If you want an accounting company in Finland that works in English to run them, see our price list.
Sources
- Finnish Patent and Registration Office: branch of a foreign trader
- Finnish Patent and Registration Office: financial statements of branches
- Finnish Patent and Registration Office: start-up notification fees from 1 January 2026
Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.
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Karma Accounts is an accounting company in Finland for sole traders and small companies. We keep the bookkeeping current and file on time, and you get the amount before the due date.
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