Date added: : 06.09.2019

Not everyone knows that in the Scandinavian countries (Denmark, Norway, Finland, Sweden), small and medium-sized businesses account for 99% of the total number of enterprises and are a key component of the Scandinavian industry, as well as one of the main sources of investment. What is the reason for a large number of small and medium enterprises and why it is profitable to register a business in one of the above countries? 

 

Among the main advantages of registering a company in the Scandinavian countries, there are the following:

  • These countries have an active policy of development and support of small and medium enterprises, and in various ways, they facilitate the process of doing business, making it attractive to investors from all over the world.
  • The countries of Scandinavia are leaders in the standard of living, the level of development of science and technology, innovation and culture.
  • The presence of a long-term state strategy, which is aimed at increasing the competitiveness of Denmark, Norway, Finland, and Sweden, which also includes the concept of business development.

To understand the above benefits, here are a few examples.

The Swedish Tax Service (Skatteverket) independently publishes webinars and video lectures on the correct filling of tax returns, the correct calculation of VAT and income, and the Swedish Employment Bureau (Arbetsförmedlingen) regularly holds meetings and workshops, where it answers all questions of new entrepreneurs. Moreover, if a novice businessman has financial difficulties or is unemployed, then the Bureau provides financial support until the business begins to make a profit. Also, the corporate tax rate in Sweden is equal to the personal income tax, which once again encourages you to start your own business. In Sweden, the practice of contacting business consultants who help businessmen in times of crisis free of charge, both professionally and financially, is actively gaining momentum. Weekly events are held in Sweden, where hundreds of entrepreneurs gather and exchange experiences.

In Finland, from 01.07.2019, the mandatory requirement to pay the authorized capital (2.500 euros) was canceled, which made the procedure of registering a company even easier. Moreover, in Finland, the conditions for creating a business for residents and non-residents are equally favorable, so the path to opening your own company in Finland is open to everyone. And if the business will generate significant income, then the entrepreneur acquires the right to obtain permanent residence only based on a business registered in Finland without the need for other conditions (additional investment in the country's economy, real estate acquisition, etc.). In Finland, as in Sweden, free courses are constantly held for beginning entrepreneurs in various languages, including Russian. As a measure of support for start-up businessmen, the state allocates the so-called “starting money”, which can be invested in the business and subsequently increase income. In Finland, various funds are created specifically for financing startups.

In Denmark, the practice of obtaining citizenship is widespread not only by entrepreneurs who have registered business in this country but also by their close relatives. Also, Denmark has a Start-Up Denmark program that allows a foreign citizen to register a business in Denmark and obtain a residence permit. To participate in the Start-Up Denmark program, you must keep only 3 conditions:

  • The uniqueness of a business idea that will make an innovative contribution to the Danish economy and will be approved by Danish experts;
  • Confirmation of financial security for living in Denmark for a year (the amount depends on the number of family members, but according to the latest data it is about 18-19 thousand euros);
  • Active participation in the business activities of the company.

Denmark has a favorable tax climate. Tax rates cannot be called low, however, for example, the corporate tax rate (22%) is one of the most acceptable in Europe, and for VAT, there is a special tax regime for certain types of activities, and the preferential tax rate is 0%.

Norway, being a small state, is famous for its attention to all start-up business projects, investment promotion, as well as loyalty to foreign citizens. In Norway, as in other Scandinavian countries, there is stable state support for business, a system of benefits and subsidies. For example, there is a program of subsidies for foreign citizens living a long time (from 3 years) in the territory of Norway, from various business support funds, money from which can be invested in business development. In the ranking of the most attractive jurisdictions for doing business “Doing Business” by the World Bank, Norway has been occupying a key position in the top ten for several years. In Norway, novice businessmen are given the opportunity to obtain a loan without confirmation of solvency and repay it after starting a business.

The article does not describe all the advantages of registering a company in the Scandinavian countries, but we tried to describe the main ones and introduce you to the business policy in them because these countries are worth getting to know them. The Law&Trust team regularly registers companies in Denmark, Norway, Finland, and Sweden and will be happy to help show your entrepreneurial potential in one of these leading jurisdictions.