What do you need to know when setting up a business in the Nordic region? Our business primer will help you succeed in this northern innovation powerhouse
The countries on the northern edge of Europe – Denmark, Finland, Norway and Sweden – form a geographical and cultural region that stands out as the continent’s innovation powerhouse.
They share a common culture, similar flag design, an egalitarian approach to society and prosperous economies.
Each scores near the top of global lists for gender equality, environmental protection, quality of education, standard of living, transparency and ease of doing business.
But while the Nordic countries may appear similar, foreign investors need to be aware of significant differences at national and regional level.
Here’s what you need to know when setting up a business in the Nordic region.
Doing business in Denmark
The World Bank’s most recent report on global business ranks Denmark as Europe’s top country and the world’s fourth best for ease of doing business. It is one of the most highly digitised economies in the EU: most transactions are cashless and almost all contacts with government authorities are online.
Business entity options: The most common types of business entities available to foreign investors in Denmark are:
- Private limited company (Anpartsselskab, ApS)
- Public limited company (Aktieselskab, A/S)
- Branch office
- Limited partnership (Kommanditselskab, K/S)
- General partnership (Interessentskab, I/S)
Public and private limited companies are the most popular. They can be used to conduct all types of activity in the country. Some enterprises – such as financial services – are restricted to public limited companies.
Residency rules: There are no residency or nationality restrictions for directors or shareholders, except in certain regulated industries.
Tax treaties: Denmark has concluded more than 70 tax treaties based on the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital.
Doing business in Finland
Finland has topped the Fragile States Index as the world’s most stable country. It’s also a leader in the number of foreign direct investment (FDI) projects in Nordic countries and, for the fourth year running, has been named the world’s happiest country.
It has a strong technology-based economy and is undergoing further transition to encompass next-generation technology such as cleantech, fintech and the internet of things.
Business entity options: Foreign investors can access the same benefits as Finnish companies. Opening a legal entity takes only a few weeks. The most common business vehicles in Finland are:
- General partnerships (avoin yhtiö)
- Limited partnerships (kommandiittiyhtiö)
- Private limited liability companies (yksityinen osakeyhtiö)
- Public limited liability companies (julkinen osakeyhtiö)
Residency rules: Citizens of Denmark, Iceland, Norway and Sweden, as well as those from the EU, Switzerland and Liechtenstein, can work in Finland without residence permits. Employees of other nationalities need a residence permit.
Tax treaties: Finland has signed about 90 double tax treaties, which follow the OECD Model Tax Convention on Income and on Capital.
Doing business in Norway
The World Bank ranks Norway in the top 10 (of 189 countries) for ease of doing business, where it has been positioned for several years.
As a leader in oil and gas, energy and the maritime and seafood industries, it has one of the world’s strongest economies. Medtech, fintech and other technology clusters are growing.
Business entity options: Foreign investors in Norway can either open a Norwegian branch of a company registered in another country or set up a Norwegian business entity. The most common types of business entity are:
- Private limited liability company (Aksjeselskap – AS)
- Public limited liability company (Allmennaksjeselskap – ASA)
- Norwegian branch of a foreign company (Norskregistrert utenlandsk foretak – NUF)
In certain sectors of national interest – such as the power and energy sector (including oil, gas and hydropower) and the finance sector (including financial, credit and insurance institutions) – some limitations are imposed on ownership and business operations.
Residency rules: Individuals from countries in the European Union (EU) or European Economic Area (EEA) must register within three months of arrival in Norway. All others must apply for a residence permit to work there.
Tax treaties: Norway has several double taxation treaties in place that allow Norwegian tax residents to claim tax credits and/or tax exemptions on income from foreign sources.
Doing business in Sweden
Sweden’s location at the centre of the Nordic region and its outstanding transport links make it an ideal hub for doing business with neighbouring countries and the rest of Europe.
It enjoys abundant natural resources, while key contributors to the economy include engineering, telecoms, manufacturing and pharmaceuticals.
The government has supported investment in growth sectors – notably biotechnologies and food processing – through measures that include favourable taxation and financial incentives.
Business entity options: In general, there are no restrictions on foreign investments or foreign shareholders. The most common business entities are:
- Limited liability company (aktiebolag)
- General partnership (handelsbolag)
- Limited partnership (kommanditbolag)
A limited liability company can be either private or public – private is the most common. They are easy to establish and widely recognised.
Residency rules: Non-EU citizens must obtain a work permit and a residence permit to work in Sweden.
Tax treaties: Sweden has tax treaties with more than 80 jurisdictions for the avoidance of double taxation.
How Intertrust Group can help you invest in the Nordic region
Before entering the Nordic market, foreign investors should consider professional advice to navigate these complex matters. Working with a trusted partner is essential.
In the Nordics, we are a one-stop shop for any legal or financial administrative need, providing high-quality support at all levels.
Our team in the Nordics includes 160 professionals specialising in administration services dedicated to servicing multinational, private equity and fund clients.
We can help corporate clients looking to expand into this exciting economy with a full suite of services from our offices in Copenhagen, Helsinki, Oslo, Stockholm and Malmö.
Why Intertrust Group?
- Intertrust Group is a publicly listed company with more than 70 years’ experience providing world-class trust and corporate services to clients around the world.
- Our 4,000 professionals work together across 30 jurisdictions to offer an undisputed global reach, deep local knowledge and an extensive international network to help clients achieve their strategic goals.
- Thanks to our network of international law firms, tax advisers, banks and auditors, we are able to incorporate, domicile and manage entities for our clients on a global or local level.
Insights | Private Capital & Hedge Fund Services
How to mend the valuation disconnect between GPs and LPs
31 August 2023
Insights | Corporate Client Services
OECD Pillar 2: Multinationals consider next steps under new minimum tax measures in Switzerland
31 August 2023