US Company Formation from Finland (2026): Toiminimi, Oy or US LLC, Finland's CFC Law for Individuals, Dividends From a US Company, the US–Finland Treaty and Delaware Flips

Finland punches far above its size in software and games. Helsinki and Espoo produced some of the world's biggest mobile game studios, and Finnish SaaS, health tech and cleantech companies sell heavily to the USA. Many have moved their parent company to Delaware to raise from American investors. Finnish freelancers and consultants serve US clients too, as toiminimi (sole traders) or through a small Oy.

When Finns look at a US LLC, two Finnish rules matter more than anything on the US side. Finland's CFC law (the väliyhteisölaki) applies not only to companies but to individual shareholders owning 25% or more of a low-taxed foreign entity. And Finland's rules for dividends from unlisted companies split them between capital and earned income, which makes a US company's dividends more expensive than many founders expect. This guide explains both, with the US–Finland treaty, and goes further than our Nordic overview.

In short: Finns can own 100% of a US LLC or C-Corporation, formed remotely. An Oy pays 20% corporate tax. Capital income is taxed at 30% (34% above €30,000), and dividends from an unlisted company, including a US one, are split between capital income and earned income according to the company's value. Finland generally treats a US LLC as a foreign company, and its CFC law can tax a Finnish individual with 25% or more on the profits of a low-taxed foreign company. A US company managed from Finland can be Finnish-resident. The US–Finland treaty limits US withholding on dividends to 15%, 5% or 0%, and exempts interest and royalties. With UCB, a Delaware corporation with EIN is $358 and a Wyoming LLC with EIN is $249, all-in.

The Finnish rules that matter

Earned and capital income

Finland splits personal income into earned income (salary, business income of a toiminimi), taxed at progressive state rates plus municipal tax, and capital income (interest, rent, gains and parts of dividends), taxed at 30%, or 34% on capital income above €30,000.

The Oy and its dividends

A Finnish Oy pays 20% corporate tax. Dividends from an unlisted Oy are taxed by reference to the mathematical value of its shares: a portion up to 8% of that value is largely taxed as capital income at a reduced rate up to €150,000, and the rest is partly taxed as earned income.

Dividends from a US company

The Finnish Tax Administration applies a similar split to dividends from unlisted foreign companies, using the fair market or mathematical value of the shares. Part is taxed as capital income and part as earned income, at progressive rates. The US withholding is credited. In practice, a Finnish founder who takes large dividends from a small US company with few assets pays more than they would on a Finnish Oy's dividends of the same size. Ask your adviser how the split applies to your company.

The CFC law

Finland's CFC law taxes a Finnish resident shareholder, including an individual, who owns at least 25% of a foreign entity whose actual tax is less than three-fifths of the Finnish corporate tax on the same income (that is, below 12%). The shareholder is taxed each year on their share of the entity's income. An exemption covers entities resident in treaty countries that carry on genuine industrial, commercial or service activity there, but the exemption depends on real activity in the other country.

A disregarded US LLC pays no US tax. If Finland treats it as a company and the LLC has no real activity in the USA, as with a consultant's LLC run from Tampere, it can fall within the CFC law. That would tax the owner on the LLC's profits as they arise, before any distribution.

How Finland treats a US company

Classification

Finland classifies foreign entities by comparing them with Finnish forms. A US LLC with limited liability for all members is generally treated as a company (yhteisö) for Finnish tax, regardless of the US view. A multi-member LLC that resembles a Finnish partnership may be treated otherwise.

Residence

A foreign company whose place of effective management is in Finland is a Finnish tax resident and pays 20% on its worldwide profits. A single-member LLC run by its owner from Oulu is managed from Finland.

Example: a developer in Tampere

These are illustrative figures, not a client case, at €0.92 to the dollar.

Antti is an embedded software developer in Tampere who earns US$110,000 (about €101,000) a year from US clients.

• As a toiminimi, his profit is earned income at progressive rates, with YEL pension insurance.
• Through an Oy, the Oy pays 20%, and he pays salary and dividends under the unlisted-company rules.
• Through a US LLC run from Tampere, the LLC is likely Finnish-resident because it is managed from Finland. If not, it may be caught by the CFC law. Either way, there is no saving, and there is extra cost.

He sets up an Oy. One US client insists on a US vendor, so the Oy forms a small Wyoming LLC that contracts with the client and pays the Oy for the work. Because the LLC is owned by the Oy, carries on an active business and passes its margin back to Finland, the CFC risk is low, but his adviser documents the arrangement.

US C-Corp formation from Finland

US tax position

A US corporation pays 21% federal tax on its profits plus state tax, and files Form 1120 and Form 5472 every year (see the 21% corporate tax explained and the C-Corp guide for non-residents). A C-Corporation paying 21% federal tax is not low-taxed for the Finnish CFC law. Under the treaty, its dividends to a Finnish Oy owning 10% or more are withheld at 5%, or 0% for an 80% parent meeting the conditions, and Finnish companies generally receive them tax-free.

Game studios and Delaware flips

Finnish game and SaaS companies that raise from US venture capital usually flip:

1. Founders form a Delaware C-Corporation.
2. They exchange their Oy shares for Delaware shares, so the Oy becomes a subsidiary.
3. Investors buy preferred shares in the Delaware company.
4. The Oy keeps the team in Finland and invoices the Delaware company at cost plus a margin.

The share exchange needs careful Finnish tax planning, because a flip into a non-EU company does not automatically qualify for the EU merger and exchange relief. Dividends from the Delaware company to the founders would later fall under the unlisted foreign company rules, which is one reason Finnish founders seldom take dividends from a venture-backed company. See raising US investment as a foreign founder and US LLC for app developers.

Example: an Espoo cleantech subsidiary

Take an illustrative case: an Espoo company that makes battery monitoring systems opens a US sales and service subsidiary in Michigan. It forms a Delaware corporation registered in Michigan, which imports systems from the Oy, employs field engineers and pays US tax on its margin. Royalties for software licensed by the Oy carry 0% US withholding under the treaty. See US subsidiary for a foreign company.

US LLC formation from Finland

US tax position

A single-member LLC with a non-resident owner pays no US income tax if the owner works from Finland and the LLC has no US office, employees or dependent agents (see effectively connected income explained). It files Form 5472 with a pro forma Form 1120 every year, and the penalty for missing it is $25,000 (see Form 5472 explained).

When an LLC fits

• A small US contracting entity owned by an Oy, carrying on an active business.
• US rental property, after checking the Finnish classification and the CFC law's position on rental income (see real estate investment LLC for foreigners).

The US–Finland treaty

The treaty in force since 1990, with a 2006 protocol, limits US withholding:

It limits US tax on business profits to a US permanent establishment and contains a limitation on benefits article. Claim it on Form W-8BEN or W-8BEN-E (see W-8BEN-E vs W-8BEN explained). Finns are eligible for the E-2 treaty investor visa.

Which state

• Delaware for a start-up, flip or subsidiary.
• The state where US staff work.
• Wyoming for a small LLC owned by an Oy.

See best state for non-residents and the state selector.

What it costs

UCB's prices include state fees and the first year of registered agent service:

• Delaware corporation with EIN: $358.
• Wyoming LLC with EIN: $249, or $348 with a US bank account application.

A Delaware corporation costs $578 a year to keep active. A Wyoming LLC costs $121 a year, or $421 with the annual federal return. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Documents and banking

For an Oy, a Trade Register extract (kaupparekisteriote) in English and a board resolution. For an individual, your Finnish passport and proof of address. US banks accept Finnish owners readily. See US business bank accounts for non-residents and Stripe for non-residents.

Mistakes to avoid

• Owning a personal US LLC with no US activity, which can fall under the CFC law for individuals.
• Expecting dividends from a US company to be taxed like listed-company dividends.
• Running a US LLC from Finland and forgetting it may be Finnish-resident.
• Flipping to Delaware without Finnish tax advice on the share exchange.
• Missing Form 5472 in a year when no US tax was due.

Frequently asked questions

Does Finland's CFC law apply to individuals? Yes. A Finnish individual owning at least 25% of a low-taxed foreign entity can be taxed on its income as it arises, unless an exemption applies.

How does Finland tax dividends from a US company? Dividends from an unlisted foreign company are split between capital income and earned income according to the company's value, with credit for US withholding.

Is there a US–Finland tax treaty? Yes. Dividends 15%, 5% or 0%, interest and royalties 0%.

Is a US LLC better than an Oy? Rarely for a Finnish resident. An Oy pays 20% and is outside the CFC law.

Does my US LLC pay US tax? Not if it has no US office, staff or agents. It files Form 5472 and a pro forma 1120 every year.

How UCB can help

We form US corporations and LLCs for Finnish owners and Oy companies remotely: the state filing, EIN, registered agent, US business address and bank application. We prepare W-8BEN-E treaty forms, and each year we file the US returns through our US tax filing service. See our formation, EIN and bank account package, and the Sweden and Estonia guides.

Setting up a US company from Finland? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.