The Service Directive became effective in December 2009. The Directive aims at boosting service sector companies' activities abroad. The Directive facilitates founding of companies in other EU countries as well as directly operating in another EU country. Additionally, cross-border trade is promoted by ensuring better access to information for consumers.
Types of services
In accordance with the principle of freedom of trade, the following may pursue a trade in Finland legally and according to good practice, without a licence from the authorities:
- a natural person, who has a place of residence in the European Economic Area (EEA);
- Finnish companies and foundations; and
- foreign companies and foundations with a Finnish-registered branch, which were established in accordance with the legislation of a Member State of the EEA and has its registered office, central administration or headquarters in a Member State of the EEA.
In some cases, the right to pursue a trade is restricted, and the trades are subject to licenses or declarations.
Licensed trades also have their own laws and decrees, which stipulate, among other things, the authority from which the licence must be obtained. Licences are often issued by the Regional State Administrative Agency in the area where the company is being set up.
Different ways of providing services
Setting up a service business
In practice, setting up a business starts with selecting a trading name. Setting up a partnership (general or limited) does not require a standard format, but there must be a written agreement for the trade register. Limited liability companies and cooperatives are only established legally once they have been listed in the trade register maintained by the National Board of Patents and Registration.
A founding declaration for the trade register is made on a founding declaration form, in which the company may also notify the Tax Administration registers. Setting up a service company is not very different from setting up other kinds of company.
Rights of service recipients
Consumer rights in Finland are monitored by the Consumer Agency, but it also provides information to businesses about issues that they have to take into consideration for production and marketing.
The Sale of Goods Act, Product Liability Act, Package Travel Act and Consumer Protection Act are examples of Acts that regulate the rights of service beneficiaries.
In contracts of employment and employment relationships, employers must at least comply with the national rules of the collective labour agreement and the terms of the employment relationship and working conditions that are considered compulsory in the relevant sector.
A seconded worker means a worker who usually works in another country than Finland and whose employer, having invested in the other country, sends him to work in Finland for a limited time when providing cross-border services.
Proof of qualifications
In Finland, the qualifications conferred by a foreign diploma are decided upon by the National Board of Education.
Approved professionals are doctors, dentists, chemists, psychologists, speech therapists, nutritional therapists, pharmacists, nurses, midwives, health workers, physiotherapists, laboratory workers, radiologists, oral hygienists, occupational therapists, opticians and dental technicians.
Valvira grants applications for approval of the above professions.
"Points of Single Contact"
In Finland, the Services Directive is implemented nationally through the Yrityssuomi.fi website owned by the Ministry of Employment and the Economy.
Enterprise Finland has a search facility for company administrative services and forms.
The Tax Administrationn electronic, interactive administrative services, or eServices, provide an umbrella for VAT declarations.
VAT rebates applied for from other EU Member States have been electronic since the start of January 2010. From then on, companies operating in the EU shall submit a rebate application via the electronic portal maintained by the tax authority in their own country. Finnish companies will submit the application using the ALVEU service maintained by the Tax Administration. As of 1 January 2010, application forms may no longer be sent on paper, by post.
Workers coming to Finland on secondment should have an E101 certificate issued by the authorities of the sending country.
The Social Insurance Institution of Finland, Kela, usually obtains information about certificates that have been issued via the Finnish Centre for Pensions.
Proof of qualifications
In Finland, the qualifications conferred by a foreign diploma are decided upon by the National Board of Education. The National Board of Education also operates as an information centre for international comparisons.
Recognition of diplomas means a decision on what kind of qualification a foreign diploma confers when someone is applying for work or study. Recognition of diplomas is usually divided into professional and academic recognition.
Work permit applications
EU and comparable nationals are free to pursue an independent trade or profession in Finland. Other persons require a trader's residence permit.
The premit is applied for before arriving in Finland, at the Finnish Embassy in the applicant's country of residence. A licence may only be obtained for viable activity. The regional Centre for Economic Development, Transport and the Environment (TE Centre) will consider whether it is possible to succeed in the trade, and whether the trader can earn sufficient revenue from his activities.
If the ELY Centre makes a decision in favour, the Finnish Immigration Service may award the applicant a trader's residence permit.
Providing services on a temporary basis
A foreigner who wants to pursue a commercial activity in Finland requires various licences, depending on whether he comes from another Nordic country, an EU or comparable country or from outside the EU.
Immigrants must fulfil certain requirements.
A fee will be charged for processing the application.
EnterpriseFinland works as the central administration centre under the EU Services Directive and the Act on the Provision of Services in Finland. It brings together information about entrepreneurship and working in Finland.
The Info Bank website is a source of important basic information for immigrants on the opportunities that Finland has to offer.
There is further information about physical representatives or paying agents on the Tax Administration website. A paying agent is a financial player that pays interest to an actual beneficiary in another Member State or ensures that interest is paid directly. The Directive (2003/48/EC) concerns situations in which both the paying agent and the actual beneficiary are private individuals who live in the Community. The payment need not be collected in that particular Member State.
The VAT Act contains a list of invoicing information that is mandatory for businesses.
For many goods and services, value-added tax is set at 23%.
A transfer to electronic billing can largely be recommended.
EnterpriseFinland and Finvoice provide companies with information on eInvoicing.
The Consumer Agency monitors consumer rights in Finland, but it also provides information to businesses about issues that they have to take into consideration for production and marketing.