Both Finland and Denmark are proving to be popular destinations for foreign investors looking to open a new business abroad. But how do the two countries compare?
The Benefits
Each country offers investors a number of benefits. Finland is renowned for its economic stability and its high tech industrial base in particular is a draw to international investors. The country’s strategic location between eastern and western markets also provides an advantageous geographical location facilitative to worldwide business. While in Denmark, the high standard of living is the major pull to many prospective business owners from abroad. The country’s flourishing economy and financial incentives such as loans, grants or reduced taxes are incredibly encouraging for overseas investors.
Types of Company Set Ups
In both Denmark and Finland the two most common types of company formation are Public Limited Companies and Private Limited Companies.
In Denmark a Private Limited Company can be set up by one or more shareholders with a minimum share capital of 80,000 DKK (approximately €11,000). In Finland at least one board director and a deputy is required and the minimum share capital is €2,500.
A Public Limited Company can be set up in Denmark by at least one founder, whatever the nationality, who must provide a minimum share capital of 500,000 DKK or €67,000. In Finland, a minimum of three board directors are needed plus a chief executive, and it is usual to be listed in the Helsinki Stock Exchange.
Incorporation Procedure
Company registration in Denmark is mandatory before the company is deemed legal. The company must have a registered office in Denmark and a power of attorney can be appointed to complete the procedure if the shareholders live abroad.
The Danish trade register informs the tax authorities whenever a new company is started and the founder must go to an office and provide the required information in order to register for VAT.
The business environment in Finland is definitely encouraging to investors wanting to establish a new business but the regulatory requirements must be complied with. Breaches of the legal tax code are taken very seriously, so it is advised to hire a legal and accountancy firm specialising in Finnish incorporation.
Employing Staff
Finland has a highly advanced education system and a highly skilled workforce. More than a quarter of the Danish workforce work in the public sector, although are also highly skilled. Danish unemployment is 4.1% compared with less than 7 % in Finland, so recruiting staff may be a challenge. In Denmark recruitment requires consultation with the government employment offices.