Finland has traditionally been a small open economy with a large export sector in relation to GNP. Finland's economy is characterised by a high level of industrialisation and a market that is largely free.

Finland's three most dominant industries are the:

Finland is one of the most sparsely populated countries in Europe, with a population of approximately five and a half million. The biggest city is Helsinki, the capital, with a population of approximately 657,000. Helsinki, Espoo (293,000 inhabitants) and Vantaa (237,000 inhabitants) form the metropolitan area, which is home to nearly one fifth of the country's total population.

The official languages are Finnish and Swedish. Finnish is spoken as a first language by approximately 90% of the population and Swedish by 5%. Finns have a good knowledge of foreign languages and English in particular, is widely spoken especially in business environments.

Some key values that are not only important in the Finnish business culture, but in Finland's culture in general, are equality, honesty and trust.

The legislation limits the maximum regular working hours to eight hours per day and 40 hours per week. Working hours can be further limited in collective bargaining agreements or individual employment contracts, for example to 37.5 hours per week. Public holidays and their remuneration are determined on the basis of collective agreements for each respective industry. According to the legislation, Independence Day is the only paid public holiday if it otherwise would have been a normal working day for the employee.

In January 2021 a new tax law (1078/2020) came into effect which allows foreign companies to take advantage of a tax deduction for joint research and development (R&D) projects. The deduction in question applies to companies with a genuine research organisation that conducts R&D activity. These new Finnish tax incentives can reduce the cost of joint R&D projects by 150% and the law will be in effect from 2021 to 2025. The incentives and the deduction apply to all operating companies in Finland (both foreign and domestic).

Finland has a civil law system. As a member of the EU, EU regulations and treaties are directly applicable and take precedence over national legislation. The legal system is based on the principle of the rule of law. Due to the close connection regarding the development of the legal systems in the Nordic countries, similarities can be found. The historically relevant and common past of Sweden and Finland is the main contributor to the similarities that are present in the respective legal systems in both countries.

There are no general restrictions on foreign investment, although authorisation is required in certain regulated sectors such as banking, investment services, fund management and payment services. However, foreign investments into, or acquisitions of ownership in, defence industry companies (including companies manufacturing dual use products) and security sector companies are subject to a mandatory approval process. Under the same regime, non-EU investments into, or acquisitions of ownership in, companies that are deemed critical for the vital functioning of society may require approval. In each case, the approval thresholds are ownership reaching or exceeding 10%, one-third, and 50% of the votes (or similar control).

The Finnish legislation was subject to amendments in late 2020 due to the implementation of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (FDI Screening Regulation). The amendments entered into force in October 2020. While the substance of the law did not undergo radical change, some parts of the regime were clarified and further guidance was provided, for example, what is considered a security sector company and what should be assessed as critical for the vital functioning of society.

Certain trading restrictions and requirements imposed nationally or at EU level (such as customs duties) apply to importing and exporting goods and trading to or from non-EU countries. Since March 2014, the EU has imposed trade sanctions and other restrictive measures against Russia as a result of the situation in Ukraine. The scope of such economic sanctions and restrictive measures imposed by the EU has significantly expanded as a response to Russia's invasion of Ukraine. The economic sanctions and restrictive measures by the EU target specific sectors of the Russian economy, such as the energy, financial and transport sectors. The EU has also introduced new sanctions against Belarus due to the country's support in relation to Russia's invasion of Ukraine. The most important are Regulation No 833/2014 (the "Sectoral Sanction Regulation") and Regulation No 269/2014 (the "Individual Sanction Regulation") which have direct applicability on all individuals, entities and bodies under EU jurisdiction. As an EU member state, Finland applies the sanctions imposed on Russia and Belarus.

Regulation No 833/2014 particularly prohibits the export of dual-use goods and advanced technology into Russia. This prohibition applies to a wide range of items and products listed in the Annexes of the Regulation. New items and products are continuously added to the scope of the prohibition with further amendments to the Regulation. Regulation No 833/2014 also places many restrictions on investments into Russia and other economic activities with Russian entities.

Regulation No 269/2014 imposes financial measures such as asset freezing and a prohibition on making funds available to certain named natural and legal persons, entities and bodies. Any business operations with targeted natural or legal persons are prohibited, unless authorised by the national competent authority. The list of targeted individuals and entities is updated by the European Commission (DG FISMA).

The Ministry of Foreign Affairs (https://um.fi/frontpage) is the competent authority in Finland for implementing and enforcing the sanctions regime and granting authorisations under Regulation No 269/2014 and Regulation No 833/2014.

There are no exchange control or currency regulations in Finland. However, the Act on Preventing Money Laundering and Terrorist Financing (444/2017) (Anti-Money Laundering Act):

This results in banks and other credit institutions having certain obligations, for example, to identify their customers in order to verify the funds and their legal origin.

In Finland deposit banks must be prepared to hand over essential information to the Financial Stability Authority in relation to the provisions provided under the Deposit Guarantee Schemes Directive (2014/49/EU) (DGSD).

Most companies registered in the Finnish Trade Register are obliged to file a notification of their beneficial owners and to update and maintain those details in the Trade Register. The companies are responsible for filing the notification and identifying their actual beneficial owners. Publicly listed companies do not have to carry out this obligation as their shareholders and actual beneficial owners are identifiable through other measures in accordance with the legislation on securities markets. Additionally, entities, such as co-operatives and foundations, are also subject to this obligation.

Foreign investors in Finland have equal access to the same range of EU and government incentives as domestic Finnish companies. Finland welcomes and encourages foreign direct investment. Incentives can take the form of:

The most common forms of business vehicle used in Finland are:

Sole proprietorships (toiminimi).

General partnerships (avoin yhtiö).

Limited partnerships (kommandiittiyhtiö).

Limited liability companies (osakeyhtiö). There are three types of limited liability company:

private limited liability companies (yksityinen osakeyhtiö);

public limited liability companies (julkinen osakeyhtiö);

European companies (eurooppayhtiö) (SE).

Co-operative societies (osuuskunta).

There is no trust institution in Finland equivalent to the common law trust system.

The most common form of business vehicle used by foreign companies is the private limited liability company (yksityinen osakeyhtiö). The main reasons for this are:

A limited liability company must be registered with the Finnish Trade Register within three months of signing the memorandum of incorporation. A start-up notification must be submitted to the Finnish Trade Register including:

Basic information on the established company.

The memorandum of incorporation.

The articles of association.

Certain other documentation.

The name of a private company must include the Finnish term "Osakeyhtiö" (or in Swedish "Aktiebolag") or its abbreviation "Oy"(or in Swedish "Ab"). The name must be individual and distinctive, and it cannot be confusingly similar to any already registered names. The Finnish Trade Register will examine the registrability of the company name in connection with processing the start-up notification.

If the company has a share capital, the share capital must be paid in full before registration. The estimated processing time ranges from three to 40 working days, depending on the type of notification. Notifications through the online system are handled more rapidly.

If the company is not notified for registration within three months, the company's formation expires.

More information about registration can be found at www.prh.fi/en/kaupparekisteri.html.

Companies must submit their annual accounts to the Finnish Trade Register. Additional stricter reporting requirements, such as preparation and publication of half-year reports, apply to publicly traded companies.

Companies must also submit their income tax returns to the Corporate Tax Office within four months of closing of their accounting year.

All limited liability companies and co-operatives must file a notification of their actual beneficial owners with the Finnish Trade Register by 1 July 2020, and after then whenever their details change or a new company is set up. The following details on beneficial owners are entered in the Trade Register:

Private limited liability companies are not subject to minimum share capital requirements. The minimum share capital for public limited liability companies is EUR80,000.

There is no maximum share capital.

Companies can issue shares for non-cash consideration. A valuation report from the auditors is required.

Restrictions on rights attaching to shares. All shares carry equal rights unless otherwise provided for in the articles of association. A company can also have non-voting shares or shares that carry the right to vote only in certain situations.

Automatic rights attaching to shares. In general, all shares carry:

However, the articles of association can provide that the company has shares with differing rights attached (for example, different shares carry different voting rights or different rights to receive distributable assets of the company).

The board of directors manages the administration of a limited liability company and the appropriate organisation of its operations. A limited liability company can also appoint a managing director and have a supervisory board. The management structure is not tied to the share capital.

One member of the board of directors and the managing director need to be resident in a European Economic Area (EEA) member state (that is, all the members of the EU plus Iceland, Liechtenstein and Norway). It is possible to apply for an exemption from this requirement from the Finnish Trade Register, but the exemption practice is restrictive.

The managing director and members of the board and supervisory board are liable to compensate:

A parent company is not generally liable for its subsidiaries' debts, unless it has provided a guarantee for those liabilities.

Finland has an extensive legal framework relating to environmental issues. Finnish environmental legislation is largely influenced by EU law, and in some cases EU environmental law is directly applicable. The most relevant acts regulating environmental matters in Finland are as follows:

In some cases, more detailed instructions on the application of environmental acts is provided in lower-level decrees or guides of public authorities.

The most relevant statutes regulating employment relationships in Finland are the:

There are also numerous collective bargaining agreements (CBAs) regulating the terms of employment. In key business sectors, many CBAs are generally applicable, and must be applied by an employer even if the employer is not a member of any employers' association.

The primarily applicable legislation in international employment relationships is determined by international choice of law rules. Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I) applies to employment contracts concluded after 17 December 2009. The Rome Convention on the Law Applicable to Contractual Obligations 80/934/EEC (Rome Convention) applies to employment contracts concluded on or before 17 December 2009. According to Rome I and the Rome Convention, the parties to an employment contract are allowed to choose the law governing their employment relationship, but this choice of law cannot override or derogate from the otherwise applicable employment legislation that would afford better protection to the employee. If the parties have not agreed on the applicable law, as a starting point, the laws of the place most closely related to the employment relationship will apply. This would usually be the place where the employee normally performs their work.

In addition, certain minimum terms of employment apply to employees who are temporarily posted to Finland and whose employment is subject to a foreign country's legislation. These terms are detailed in the Posted Workers Act (447/2016, as amended) and regulate, for example, minimum salary, rest periods and annual holiday.

Generally, Finnish employment law applies to Finnish employees who are temporarily seconded to work abroad.

A written contract is not required. However, an employer must give employees who have been employed under an oral contract a written statement of the main terms of employment, some within the first seven days of employment and the rest within a month's time from the commencement of employment (ECA 2001). This also applies if the written contract is silent on any material condition. The employment contract or written statement must include at least the following information:

CBAs play a central role in the Finnish labour market. The CBA governing the employment relationship can set out specific rules that substitute or supplement labour and employment law. The terms arising from the provisions of the applicable CBA supersede any conflicting terms of an employment contract when the terms agreed in the employment contract are to the employee's detriment (Collective Agreements Act (436/1946, as amended)).

In addition, certain practices of the employer, for example a benefit regularly given to the employees, may become so well-established that they form an implied term of the employment contract and are therefore no longer solely at the employer's discretion.

Citizens of the Nordic countries (Denmark, Iceland, Norway and Sweden) can work in Finland without an employee residence permit. However, citizens of other Nordic countries who are staying in Finland for over three months, must notify details of the move and register at the nearest service location of the Digital and Population Data Services Agency (Fi. Digi- ja väestötietovirasto). Registration is free.

In addition, citizens of other EU countries and of Liechtenstein and Switzerland can work in Finland without an employee residence permit. However, if the work lasts longer than three months, the employees must register their right of residence with the Finnish Immigration Service. The fee for the registration of EU citizens and the equivalent right to residence is currently EUR54.

Employees are entitled to management representation where an employer regularly employs at least 150 employees in Finland (Codetermination Act). The employees can appoint their representatives to the supervisory board, the board of directors or to the management groups of the company. The employer, however, chooses the administrative body in whose work the employee representatives can participate.

On a transfer of business, both the seller and the purchaser (if they regularly employ at least 20 employees and are therefore within the scope of the Codetermination Act) have a duty to inform the affected employee representatives on certain aspects of the transfer. If the transaction does not constitute a transfer of business (but is instead a share deal), there is no duty to consult employees in accordance with the Codetermination Act. When considering redundancy terminations, lay-offs, or making employment relationships part-time or other material changes to the terms of employment, the employer must also observe a consultation obligation and procedure (Codetermination Act) (see Question 17).

An employer can dismiss an employee if the employee has seriously breached or neglected obligations arising from the employment relationship. However, the grounds must be substantial and appropriate. In addition, an employer can dismiss an employee if the employee's work capacity has substantially diminished over a long period of time, and the employee is no longer capable of performing their duties (ECA 2001). Case law indicates that the following, among others, can constitute sufficient grounds for termination:

If the employer lacks sufficient grounds for the dismissal, the dismissal may be deemed unjustified. In addition, the following are by law deemed as not justified grounds for dismissal:

In addition, some employees, such as employee representatives, enjoy special protection against dismissal.

Before dismissing an employee, the employer generally must:

On termination of an employment contract, the employment relationship will continue for the duration of the applicable notice period. CBAs usually contain provisions on notice periods that are mandatory for those required to apply the CBA. Apart from this, the parties can, within certain limitations, agree on the length of the notice period. If nothing has been agreed and no CBA is applicable, the ECA 2001, contains provisions on the length of the notice periods. According to the ECA 2001, the employer's notice period is determined as follows:

When dismissed, employees are entitled to their notice period salary, compensation for accrued holidays and other unpaid receivables. Severance is optional.

An employee dismissed without sufficient legal grounds and without the required procedure may be entitled to compensation of up to 24 months' salary (for employee representatives, up to 30 months' salary), subject to the particular circumstances of the dismissal (ECA 2001). If an employee is selected for dismissal on discriminatory grounds, the employee can, in addition to compensation for unjustified termination, claim compensation and damages. Discrimination is also sanctioned by the Finnish Criminal Code (39/1889, as amended), the possible penalty being fines or up to six months' imprisonment.

For an exceptionally severe breach, the employment relationship can also be terminated with immediate effect by both the employer and the employee if it is deemed unreasonable for the employment relationship to continue for the duration of the notice period. The termination with immediate effect must be made within 14 days of learning of such breach, otherwise the right to do so is forfeited.

Under the ECA 2001, an employer can terminate an employment contract on collective grounds, provided that both:

A redundancy is invalid if either:

There are no specific selection criteria for determining which employees are to be made redundant. CBAs often contain provisions regarding this, stipulating, for example, that the work of employees with dependants should be preserved. No employer can use discriminatory grounds to select employees for dismissal. Certain employees enjoy special protection from termination, such as employee representatives and employees on family leave.

Employers (including branches of foreign undertakings) who regularly employ at least 20 employees must, before making a decision on redundancies, layoffs, reducing working hours or other material changes to the terms of employment, consult the employees and/or their representatives regarding the reasons for, effects of, and possible alternatives to the planned measures (Codetermination Act). The consultations must be carried out in accordance with the co-operation procedure in the Codetermination Act and possible CBA provisions.

An employee made redundant without sufficient legal grounds may be entitled to compensation of up to 24 months' salary (for employee representatives, up to 30 months' salary). If the employer fails to comply with the codetermination procedure, the employee subject to the measures resulting from decisions made by the employer may be entitled to compensation of up to EUR35,000 for breach of the codetermination obligation.

After the end of the employment relationship, the employer has an obligation to re-employ any employees made redundant if the employer needs additional workforce for the same or similar tasks as the employee used to perform and the employee is registered as a jobseeker with the local labour authorities. This obligation applies for four months after the employment relationship of the employee made redundant has expired. However, if the employment relationship has lasted at least 12 years, the obligation applies for six months.

Employers that regularly employ at least 30 employees must offer to employees who are made redundant and have at least five years of continuous work history with the employer both:

Generally, an individual is deemed to be a Finnish resident for income tax purposes if either:

In addition, citizens of Finland who have moved abroad are regarded as residents for Finnish income tax purposes until three years after the end of the year of their emigration, unless they can prove that they do not have any substantial ties to Finland during the tax year in question.

Tax resident individuals are taxed on their worldwide income in Finland. Non-residents are liable for tax on income derived from Finland (Income Tax Act (1535/1992, as amended)), unless there is an applicable tax treaty between Finland and the employee's state of residence restricting Finland's right to tax.

Income tax. Tax resident employees must pay taxes on their earned income. Currently, the highest progressive tax rate is 52.02% (2022).

Social security contributions. Employees must also pay (rates for 2022):

A church tax up to 2.1% (rate for 2022, depending on the church and municipality) is also payable if the taxpayer is a member of a Finnish church (mainly Lutheran and Orthodox) with a right to tax.

All the above taxes and other contributions are collected as advance payments withheld by the employer, based on a tax card and applicable pension and unemployment insurance contribution rates. Tax resident individuals annually receive a pre-completed tax return that can be amended by the taxpayer. If the advance payments determined in the tax decision are inaccurate, the taxpayer will either need to make further payment or will receive a refund.

The salary and fringe benefits paid to qualifying foreign key employees with special knowledge or competence are taxed at 32% during the first four years of their assignment in Finland, provided that they have a special tax card (applied for separately).

Subject to any double tax treaties, non-tax resident foreign employees working for a Finnish company or Finnish branch of a foreign company are subject to a withholding tax of 35%. EUR510 is deducted from the monthly salary before the tax is withheld.

Non-tax resident employees also have the right to choose to be taxed with progressive tax rates similar to those of tax resident employees.

Non-tax resident employees must, in most cases, pay social security payments (including pension) of approximately 10.36% (2022) of all Finnish-source earned income, unless they have a certificate A1 or E101 of a posted employee.

Employers must make the following contributions:

The amount of these payments is about 22% of the gross salary payable. The amount of individual contributions can vary substantially depending on the branch and size of the employer. Foreign employers generally only make these contributions if they have a permanent establishment in Finland.

A company is treated as a Finnish tax resident if it is registered in Finland or established under Finnish law. However, an applicable double tax treaty might restrict the taxing right of Finland if the place of effective management of the company is outside Finland. With the amendment to the Income Tax Act that entered into force on 1 January 2021, a foreign company is generally considered to be a Finnish tax resident if its place of effective management is located in Finland. A European company (Societas Europaea) registered in Finland is also treated as tax resident.

Generally, a Finnish branch of a non-tax resident company constitutes a permanent establishment and must pay corporate tax on income and gains attributable to that branch (see Question 21, Corporate Tax). A non-tax resident company, not domiciled in a double tax treaty country, may be liable for corporate tax on its activities in Finland even when a permanent establishment is not created. If a non-tax resident company does not have a permanent establishment/branch in Finland, the company is only subject to tax on Finland-source income (for example, dividends and royalties).

Tax resident companies are subject to corporate tax on their worldwide profits and gains (subject to any double tax treaties) at a rate of 20%.

Generally, corporate tax is based on the profit and loss statement prepared in accordance with the Finnish Generally Accepted Accounting Principles (GAAP) with only minor adjustments for tax purposes. Companies can also apply the International Financial Reporting Standards (IFRS).

Corporate tax is usually paid with monthly advance payments. Companies file a corporate tax return within four months after the end of the financial period. If insufficient advance taxes have been paid, a supplement corporate tax based on the tax decision, issued within ten months after the end of the financial period, must be paid.

Corporate tax is a flat rate state tax. There is no local corporate tax.

VAT is payable at the standard rate of 24% on:

The reduced rates are:

Payable and deductible VAT is reported by filing a self-assessed tax return. As a general rule, this is filed monthly and VAT is typically paid monthly to a tax accountant.

A transfer tax is payable on the transfer of Finnish securities (1.6%) and on the transfer of securities in a Finnish housing or real estate company or a foreign real estate company holding Finnish real estate (2%). The tax base for transfer tax includes both:

Transfer of securities is tax exempt if either:

Transfer tax is also payable on the transfer of real estate (4%).

Transfer tax on securities must be paid and the transfer tax return filed within two months following the transaction. Transfer tax on real estate must be paid within six months following the transaction.

See Question 19.

Generally, dividends paid by Finnish companies to foreign corporate shareholders are subject to a 20% withholding tax or a lower rate defined in the applicable double tax treaty (if any). Dividends paid to foreign corporate shareholders who have their place of residence in the EEA are subject to a 15% withholding tax (or a lower rate defined in any applicable tax treaty) where the shares of the foreign corporate shareholder in the dividend distributing company are considered to be investment assets of the foreign corporate shareholder, and the foreign corporate shareholder does not have at least a 10% holding in the dividend distributing company.

Dividends paid by Finnish companies to foreign corporate shareholders are not subject to withholding tax if the following conditions apply:

Additionally, dividends paid to an EU resident company holding at least 10% of the share capital in the distributing company are not subject to withholding tax, provided the recipient falls within Article 2 of Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (as amended by Directives 2013/13/EU and 2014/86/EU) on the taxation of parent companies and subsidiaries.

Dividends paid on nominee-registered shares are generally subject to a 15% withholding tax if the recipient resides in a double tax treaty country.

In addition, the return of capital by publicly listed companies from the invested unrestricted equity fund is also regarded as dividend distribution and taxed accordingly. Return of capital other than by publicly listed companies is also taxed as dividend, unless the payment constitutes return of capital invested by the shareholder less than ten years prior to the distribution of funds (in this case, the return of capital is subject to capital gains taxation).

Generally, dividends received by companies are tax exempt. However, 75% of dividends are taxable (at a rate of 20%) and the remaining 25% is tax exempt in the following situations:

Foreign dividends are taxed in line with domestic dividends if the following criteria are met:

If the distributing company resides in a non-tax treaty country, 100% of the dividend is taxable.

Interest paid to foreign corporate shareholders on a loan is not subject to withholding tax, provided that the loan is not deemed to be a capital investment comparable to equity.

Generally, royalties paid by a Finnish company to an affiliated EU corporate shareholder are not subject to withholding tax (Directive 2003/49/EC on interest and royalty payments). Otherwise, a withholding tax of 20% is payable. Usually, double tax treaties reduce or eliminate this tax.

According to the interest deduction limitation rules, net interest expense (that is, interest expense in excess of interest income) is deductible, provided that it does not exceed EUR500,000. If this level is exceeded, all net interest expense is non-deductible, with two exceptions:

The interest deduction restrictions apply to interest, other compensation for debt corresponding to interest as well as other payments arisen in connection with the raising of finance. The definition of interest is broad in this context. Guarantee fees, arrangements fees and similar costs have been mentioned as examples.

The non-deducted net interest expense is carried forward and deductible during the following years under the 25% taxable EBITD restriction.

The current interest barrier rules entered into force in Finland on 1 January 2019 and are effective for tax years 2019 onwards. However, the restrictions do not apply to loans from unrelated parties and raised on 16 June 2016 or earlier. The rules were amended as of 1 January 2022, and the changes concern the balance sheet comparison and the exception related to public infrastructure projects.

Income tax can be levied on a tax-resident individual or company for their share of the profit of a controlled foreign company (CFC), regardless of whether the profit is distributed by the CFC to its shareholders. Generally, a CFC is a foreign company that in its country of tax residence is subject to income tax at a rate lower than three-fifths of the level of corporate tax payable in Finland. The criteria to apply CFC legislation for a company residing in a tax treaty country or in an EU/EEA member state is stricter than for a company residing in a country that has no tax treaty with Finland or is not an EU/EEA member state.

Under the CFC legislation, a corporation is a CFC and a shareholder is liable for tax if the shareholder, together with related parties, owns more than 25% of the corporation (either by vote, value or entitlement to profits). Furthermore, the new legislation lowered the ownership threshold, which is used to define a related party status, from 50% to 25%.

Transactions between related parties, as defined in the law, must be carried out in accordance with the arm's length principle, even between Finnish resident companies. In addition, large enterprises must prepare transfer pricing documentation of cross-border transactions between related parties.

Exports of goods outside the EU are in most cases exempt from VAT. Imports from outside the EU are subject to Finnish VAT, which is payable by the importer as if the goods were supplied in Finland (see Question 21, Value added tax (VAT)). Customs duty and excise duty may also be payable on the imported goods.

Currently, Finland has double tax treaties with about 90 countries. The tax treaties generally follow the OECD Model Tax Convention on Income and on Capital and are applied in accordance with the OECD commentary.

Competition law applies to all companies, Finnish domiciled or foreign companies that conduct business in Finland. Competition law in Finland is administrative in nature and does not entail criminal penalties for anti-competitive behaviour (even though there are certain actions that are penalised under the Criminal Code).

The two main authorities responsible for enforcing the national competition rules, as well as Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), are the:

The ultimate appellate body in competition matters is the Supreme Administrative Court. This functions as a second appellate instance for the FCCA's decisions and as a first appellate instance for the Market Court's decisions.

In addition, at regional level, the regional state administrative agencies also have powers to investigate restrictions on competition in co-operation with the FCCA. There are also sectoral authorities for certain industries such as energy, transport and communication. In addition, food supply chain's practices are supervised by the Food Market Ombudsman.

The rules applicable to prohibited horizontal and vertical co-operation are contained in section 5 of the Competition Act. According to this provision, agreements between business undertakings, decisions by associations of business undertakings and concerted practices by business undertakings which have as their object or effect the significant prevention, restriction or distortion of competition are prohibited. This is in line with Article 101 of the TFEU. In particular the following competition restrictions are prohibited:

A restriction on competition can be exempt under section 6 of the Competition Act where certain conditions (identical to those listed in Article 101(3) TFEU) can be satisfied.

Section 7 of the Competition Act, which is modelled on Article 102 TFEU, prohibits abuse by one or more business undertakings of a dominant position. There are many forms of abuse that are liable to fall within the scope of this prohibition, such as:

Furthermore, under the provisions ensuring neutrality of competition between public and private sector business activities (sections 30 (a) to 30 (d) of the Competition Act), the FCCA has the authority to intervene in the provision of goods and services in public sector business activities if the used operating models (for example, overpricing) or operating structures (for example, undertakings controlled by the public sector) prevent or distort competition.

Due to the implementation of Directive (EU) 2019/1 (ECN+ Directive), the FCCA's investigative and enforcement powers in relation to anticompetitive practices were strengthened on 24 June 2021. The current system entitles the FCCA to propose both behavioural and structural remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end. In respect to sanctions for competition infringements, the Finnish system is based on administrative fines.

The Finnish merger control regime captures only mergers exceeding certain turnover thresholds. Notification to the FCCA is required when both of the following turnover thresholds are met:

The combined aggregate worldwide turnover of the parties exceeds EUR350 million.

The aggregate turnover in Finland of each of at least two of the parties exceeds EUR20 million.

A concentration that needs to be notified under the provisions of the Competition Act include the occurrence of the following:

Under the Finnish merger control regime, the possibility of exercising decisive influence over the actions and competitive behaviour of an undertaking means such change in control that needs to be notified. Control with respect to merger control can therefore be exercised both on a de jure and de facto basis. Even a minority interest can sometimes lead to a position where a concentration needs to be notified.

The FCCA is authorised to intervene in transactions where it assesses that the concentration significantly impedes effective competition in the Finnish market or a substantial part thereof, in particular due to the creation or strengthening of a dominant position. This is the same test as applied by the European Commission.

Foreign-to-foreign transactions are subject to the same thresholds and there are no other foreign exemptions.

Some specific provisions regarding merger notification procedures apply to certain financial institutions and insurance companies in Finland. Financial institutions' turnover calculation is also subject to specific rules.

Further, in Finland, competition law is not applied to agreements or arrangements which concern the labour market.

The Finnish Criminal Code (39/1889, as amended) contains a number of bribery offences, including:

The Finnish Penal Code allows for application of corporate criminal liability in relation to the giving of bribes to a public official or a member of Parliament and the giving or accepting of bribes in business.

Under Finnish law, the punishment for bribery offences varies from a fine to two years' imprisonment. If the value of a bribe is considerable, the offence may be considered aggravated, in which case the punishment is imprisonment for at least four months and at most four years.

Corporate criminal liability is implemented as a corporate fine (the minimum corporate fine is EUR850 and the maximum corporate fine is EUR850,000).

Definition and legal requirements. To be protected, an invention must:

A patent provides a right to prohibit unauthorised exploitation, including the manufacture, offering, making available, and use, of the patented invention in Finland.

Registration. Patent protection is sought by filing an application with the Finnish Patent and Registration Office (FPO)or with the European Patent Office (EPO) and it is conditional on examination by the FPO or the EPO respectively. Finland is also a member to the Patent Cooperation Treaty 1970 (PCT). Patent protection for international PCT applications filed via the FPO, EPO, or World Intellectual Property Organization (WIPO) is conditional on grant by the FPO. The website of the FPO is available at www.prh.fi and provides guidance on how to register a patent and offers databases for patent searches.

Enforcement and remedies. The patent holder and licensees can bring proceedings for patent infringement. In the event that a licensee files a suit in patent infringement, it must notify the right holder. The Market Court, or subject to leave to appeal to the Supreme Court, can:

Patent-related criminal proceedings imposing fines or imprisonment are handled at first instance by the District Court of Helsinki.

Length of protection. Subject to the payment of renewal fees, protection lasts for 20 years from filing the application. On application, the term of protection for inventions concerning pharmaceutical products and plant protection products may be further extended by a maximum of five years.

Definition and legal requirements. To be protected, a sign must be distinctive.

The right to a trade mark provides an exclusive right to prevent others from using it, or a mark confusingly similar to it.

Protection. Trade marks are established through registration with the FPO or the European Union Intellectual Property Office (EUIPO), or through establishment in Finland. Registrations with the FPO or the EUIPO are conditional on examination by the FPO or the EUIPO, respectively. Trade mark protection in Finland is also available via the Madrid System of the WIPO. Registration of a trade mark filed as an international application under the Madrid System is conditional on examination by the FPO. The website of the FPO is available at www.prh.fi and provides guidance on how to register a trade mark and offers a database for trade mark searches.

Enforcement and remedies. The trade mark holder and licensees can bring proceedings for trade mark infringement. The licensee can initiate legal proceedings in a trade mark infringement case only with the consent of the right holder of a trade mark, or unless otherwise agreed. However, the holder of an exclusive licence can institute legal proceedings if the right holder of the trade mark fails to take action against the infringement within a reasonable time after being informed of the infringement. Enforcement is similar as for patents (see above, Patents).

Length of protection and renewability. A Finnish trade mark registration expires after ten years from the date of registration and is renewable indefinitely for consecutive ten-year periods. Under the fully reformed Trade Marks Act, the initial ten-year period is calculated from the date of application. Unregistered trade marks are protected if they are established through use. A trade mark is considered established when it is generally known in Finland in its relevant target group as a trade mark of the goods or services of the proprietor.

Definition. To be registered, a design, pattern or ornament must both:

The design right provides an exclusive right to prevent others from exploiting it by manufacturing, offering, making available, using, importing, exporting or storing a product based on, or including, the protected design.

Registration. Rights to registered designs are sought by filing an application with the FPO or EUIPO and are conditional on examination by the FPO or EUIPO, respectively. The website of the FPO is available at www.prh.fi and provides guidance on how to register a design and offers a database for design searches.

Enforcement and remedies. The right holder and licensees can bring proceedings for patent infringement. In the event that a licensee files a suit in design right infringement, it must notify the right holder. Enforcement is similar as for patents (see above, Patents).

Length of protection and renewability. Protection lasts for five years and is renewable for four additional five-year periods.

Definition and legal requirements. For unregistered designs, protection is available based on Regulation (EC) 6/2002 on Community designs.

Unregistered designs provide the right holder with an exclusive right to use a product incorporating that design. This includes the making, offering, putting on the market, as well as importing and exporting of a product in which the design is incorporated or to which it is applied, and stocking such a product for those purposes. However, an unregistered design must confer on its holder the right to prevent these acts only if the contested use results from copying the protected design. Further, the contested use will not be deemed to result from copying the protected design if it results from an independent work of creation by a designer who may be reasonably thought not to be familiar with the design made available to the public by the holder.

Enforcement and remedies. The right holder of the unregistered design is entitled to enforce the unregistered design right. The licensee can bring proceedings for infringement only if the right holder consents thereto. However, the holder of an exclusive licence can bring such proceedings if the right holder the design, having been given notice to do so, does not himself bring infringement proceedings within an appropriate period. Further, a licensee will for the purpose of obtaining compensation for damage suffered, be entitled to intervene in an infringement action brought by the right holder. Enforcement is similar as for patents (see above, Patents).

Length of protection. Protection lasts for three years from the date the design was first made available to the public in the EU. After three years, the protection cannot be extended.

Definition and legal requirements. The original and unique expression of an idea, motif or subject of a literary or an artistic work of authorship is protected. The copyright owner has the exclusive right to authorise or prohibit the use of the work through:

Protection. Protection subsists automatically and does not require registration.

Enforcement and remedies. The author and its representative can bring proceedings for copyright infringement. In addition, the public prosecutor may be entitled to initiate proceedings in certain cases. Enforcement is similar as for patents (see above, Patents).

Length of protection and renewability. As a general rule, protection expires 70 years after the author's death.

Utility models can be protected. They are technical inventions that:

Protection provides an exclusive right to prohibit others from commercially exploiting the technical solution protected by the utility model.

Length of protection and renewability. Protection lasts for four years from the date of application and is renewable twice; first for a period of four years and after that for a period of two years.

The Act on Commercial Representatives and Salesmen (417/1992, as amended) contains mandatory rules on:

No statutes specifically regulate distributorships, but a number of statutes indirectly apply to distribution agreements.

No specific statutes regulate franchises, but a number of statutes indirectly apply to franchising agreements.

In addition to general statutes, the following acts are the main acts to regulate e-commerce:

Multiple statutes apply to the operation of online platforms. The most significant are the:

Prior to entering into a contract, online platforms are required to provide consumers with certain conformation, for example, about the main parameters determining the ranking of offers and whether they are entering into a contract with a trader or non-trader (Consumer Protection Act). Furthermore, consumers should be informed of how obligations related to the contract are shared between the third party offering the consumer goods and the online marketplace. The Unfair Business Practices Act (1061/78, as amended) prohibits acts that are against good business practice or are otherwise unfair to other entrepreneurs. Moreover, the Competition Act (2011/948, as amended) comes into play in the event that the platform's business raises concerns from a competition law perspective. For example, where it is considered that a platform acts in such a way that could be seen as treating its own products in a more favourable way, violating unfair business practises or competition law.

Regulation (EU) 2019/1150 of the European Parliament (EP) and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services introduced rules for online platforms and search engines regarding terms and conditions as well as complaints and redress (among others). According to the Act on the Prohibition Procedure of Online Intermediation Services and Search Engines 464/2020, cases concerning the prohibition procedure in accordance with Regulation (EU) 2019/1150 are handled by the Market Court.

The Consumer Protection Act (38/1978, as amended) provides the main legal framework for marketing directed at consumers, which applies also to digital advertising. For example, it prohibits:

Marketing that is contrary to good practice or otherwise inappropriate.

Providing false and misleading information in marketing.

The Consumer Protection Act contains a number of specific and mandatory rules on consumer marketing, for example on the information to be included in marketing. In addition, the Consumer Ombudsman issues guidelines on consumer marketing-related matters, for example regarding influencer marketing in social media, promotional games and sales promotion campaigns as well as giveaways. These guidelines are not binding but provide an indication of how the supervising authority interprets the Consumer Protection Act.

Business-to-business marketing is regulated by the Unfair Business Practices Act (1061/78, as amended). Additionally, the Act on Electronic Communications Services regulates marketing in certain media, including marketing in television and radio. In this respect, there are specific provisions concerning (among other things):

There are specific rules relating to the marketing of certain types of products including alcohol, tobacco, pharmaceuticals, medical devices and foodstuff, among others. In addition, special consideration must be given when targeting minors for sales promotion purposes.

The statutory legislation is supplemented by several self-regulatory codes of the International Chamber of Commerce (ICC), most importantly the ICC International Code of Advertising Practice. In the pharmaceutical industry, Pharma Industry Finland, has issued a Code for the Marketing of Medicinal Products. In addition, the Finnish Direct Marketing Association has issued several self-regulatory codes on direct marketing.

Direct marketing is regulated under the Act on Electronic Communications Services (917/2014, as amended). As a main rule, direct marketing by means of automated calling systems and fax machines, e-mails, text messages, voice messages or picture messages can be targeted only at natural persons who have given their prior consent.

In this regard, the consent must be considered as "active'", meaning that the person must have explicitly provided that direct marketing is allowed. A pre-ticked box is not sufficient to comply with this obligation. Direct marketing for legal persons is allowed without a prior notice. On all occasions, there must be a possibility to forbid direct marketing.

Sales promotions are regulated under the Finnish Consumer Protection Act (38/1978, as amended) and the Unfair Business Practices Act (1061/78, as amended), which are further supplemented by the Finnish Consumer Ombudsman's guidelines. The guidelines are not binding but provide practical guidance and an indication of how the supervising authority interprets the Consumer Protection Act.

In general, the main principles provided for sales promotions consist of the following:

The conditions must always be clear and comprehensible and easily accessible and include, particularly, the duration of the promotion and any quantitative or other related restrictions.

In the event of a combined offer under which the purchase of one product entitles the buyer to another product without extra cost or to a reduced price or another special advantage, the content and value of the offer (unless under EUR10) and, in addition to the common price of the products, their separate prices must be stated.

For advertising relating to prize draws and competitions, an excessive emphasis on the prizes and opportunities for winning is considered inappropriate.

As of 25 May 2018, the collection, storage and processing of personal data have been regulated by Regulation (EU) 679/2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation (GDPR)).

The national Personal Data Act (523/1999, as amended) has been repealed and a new Data Protection Act supplementing and specifying the GDPR entered into force in early 2019. The Act on the Protection of Privacy in Working Life (759/2004, as amended) regulating the protection of privacy in employment relationships was also amended in early 2019. The Act on Electronic Communications Services (as amended 917/2014) regulates the processing of data in electronic communications.

The Product Liability Act (694/1990, as amended) provides for compensation for personal injury and damage caused by a defective product to property where the property is intended, and primarily used, for private use or consumption.

In order to be entitled to damages under the Product Liability Act, the injured party must prove the damage, lack of safety of the product and the causal link between the lack of safety and the damage. The parties that can be held liable under the Product Liability Act are as follows:

In addition, the Consumer Safety Act (920/2011, as amended) applies to consumer goods and services and contains rules on product safety, which is supervised by the Finnish Safety and Chemicals Agency (Tukes). Noncompliance can lead to:

The Consumer Safety Act does not impose liability specifically to certain parties. However, liability arising from damages related to product safety will be assessed on the basis of the Tort Liability Act (412/1974, as amended). A general prerequisite for a party to be liable is that there is a causal link between the damage and the act for which the party is to be held liable.

Main activities. The Finnish Competition and Consumer Authority (FCCA) is responsible for:

FCCA decisions can be appealed to the Market Court, which also has the exclusive competence to impose fines or periodic penalty payments, and to prohibit mergers in Finland. The ultimate appellate body in competition matters is the Supreme Administrative Court. This functions as a second appellate instance for the FCCA's decisions and as a first appellate instance for the Market Court's decisions.

W www.kkv.fi (FCAA)

www.markkinaoikeus.fi (Market Court)

www.kho.fi (Supreme Administrative Court)

Main activities. The key legislative body regarding environmental matters is the Ministry of the Environment. Additionally, policies regarding:

The supervisory authorities in environmental matters are generally the regional centers for Economic Development, Transport and the Environment, and the environmental authorities of municipalities. Depending on the situation, environmental permits, water permits, and land extraction permits are granted by the Regional State Administrative Agencies or the municipalities. The municipalities also carry out the land use planning (other than the regional land use plans, which are handled by the Regional Councils) and grant building and other construction permits in accordance with the land use planning. More sector-specific permitting and supervisory issues are handled for example by the Energy Authority, which governs over energy matters, and Safety and Chemicals Agency (Tukes), which governs over mining and chemical matters.

W www.ym.fi (Ministry of the Environment)

www.tem.fi/ (Ministry of Economic Affairs and Employment)

www.mmm.fi (Ministry of Agriculture and Forestry)

www.energiavirasto.fi; (Energy Authority)

www.tukes.fi (Tukes)

Main activities. The Financial Supervisory Authority (FIN-FSA) is the authority for supervision of Finland's financial and insurance sectors. The entities supervised by the authority include banks, insurance and pension companies as well as other companies operating in the insurance sector, investment firms, fund management companies and the Helsinki Stock Exchange.

Main activities. The Finnish Patent and Registration Office (PRH) registers companies, foundations, associations, religious communities, and LEI codes. The PRH examines and grants patents, and registers utility models, trade marks and designs. The PRH oversees and approves auditors. The PRH also monitors organisations the regarding collective management of copyright to ensure compliance with the Finnish Act on Collective Management of Copyright.

There is nothing else important relating to doing business in Finland.