Starting a company may initially seem complicated, but establishing a sole proprietorship in Finland is relatively straightforward. This article explains how to get started, what you need and what to consider when establishing one for the first time.
1. What is a sole proprietorship and who is it for?
A sole proprietorship—known in Finnish as a toiminimi or private trader—is one of the simplest ways to start a business. It is particularly suitable for solo entrepreneurs, freelancers and people running a business alongside other work. The entrepreneur and the business are not separate legal persons. This keeps administration relatively light but also makes the entrepreneur personally responsible for the business’s obligations.
2. How is a sole proprietorship established?
You can start as a sole trader free of charge in MyTax and receive a Finnish Business ID immediately. At the same time, you can apply to the relevant Finnish Tax Administration registers, such as the Prepayment Register and VAT Register. If you want to protect your business name or are legally required to register with the Trade Register, submit a notification through the YTJ service. A private trader’s Trade Register notification costs €75 in 2026. You will need strong electronic identification and basic information about the business.
3. What else do you need?
It is advisable to open a separate bank account for business transactions even though the law does not generally require one. This clearly separates business income and expenses from personal finances and makes accounting easier. A sole trader may use single-entry bookkeeping when the statutory conditions are met, or outsource the work to a professional. Also remember YEL pension insurance: it is mandatory when all applicable conditions are met and your confirmed YEL income reaches the annual threshold.
4. Benefits and challenges
The main advantages are speed and simplicity: establishing the business is inexpensive and administration is relatively light. The main drawback is personal liability. You are personally responsible for the business’s debts and agreements. The business result is taxed as part of your personal taxation, and business-related expenses may be deductible when the relevant conditions are met.
A sole proprietorship is an excellent way to begin doing business. It offers a low-threshold opportunity to test an idea and learn about entrepreneurship in practice. Begin by assessing your needs and let us help with the rest. Taking the first step into entrepreneurship can change the direction of your life.