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Finland is famous for a couple of things. Finnish people are the number one coffee drinkers in the world!
Besides coffee they also enjoy saunas. Here you will be able to find a sauna in a Burger King fast-food restaurant. Downtown in Helsinki there is a famous Ferris wheel that has a sauna pod. So you can enjoy the panoramic view of the city while being in a sauna.
Just like other Scandinavian countries Finland is famous for good social programs. In our experience, Helsinki is a little more chaotic than Stockholm or Oslo but things still work pretty well and it seems to be well organized.
As you probably know taxes are pretty high in Finland.
For personal tax, If you are in the highest tax bracket by the time you added all the duties you will end up paying around 50%.
Corporate tax is around 20%, which is pretty common across Europe. Their corporate residence rules are the same as in Sweden, which means that they don’t use Management and Control rules which is good.
Where they get you is their super tough CFC rules, which are arguably the strictest in Scandinavia. The threshold for CFC is 25% and it’s not just based on voting shares and distributions, it’s also entitlement to the capital share.
They do not have lots of exemptions here. Their exemptions come typically for EU and maybe EEA countries and not beyond that.
So what can you do if you live in Finland?
First of all, you will need to form a foreign company. This company should be in the EEA or EU. This could lower your taxes significantly.
They have participation exemption so you could potentially bring money back tax-free or at the favorable tax rate into the parent company.
You also have a situation where you can receive dividends as an individual at a lower tax rate. Rates for dividends is 30% and then 35% after a certain threshold.
Your foreign company will have to have actual activities, so you can claim that your money is made outside of Finland.
Estonia and Latvia seem like quite interesting places for people from Finland. Bulgaria, Cyprus, Malta, and Gibraltar are also potentially interesting places.
If you need help with your tax situation feel free to reach out to us so we can discuss your specific situation.
