Entrepreneurship Visa In Finland? Not Unless Your Startup Is Profitable!
Due to the nature of this post we have agreed to publish the content under a pseudonym.
The path to becoming an entrepreneur anywhere is wrought with obstacles. Most of the concerns come down to money and time but if you happen to live outside of your home country you also need to think of visas. One often hears horror stories about getting an entrepreneurship visa to the US. Here is my experience with Finland.
The story starts similar to many foreigners: I moved to Finland from the safety and comfort of my home country because of my girlfriend. I was lucky enough to find work despite my non-existent Finnish in a big international company. All was good until I started being more and more interested in entrepreneurship. Besides, things at work were not going so well, there was a lot of hushed-up talk about job cuts.
The day came when I was downsized. Luckily, I saw that coming and was already building a small business idea on the side. A friend joined my team and after a few weeks of coding, development and user testing our prototype was ready. We took it to a few potential customers and they said they could use something like this in their business! Who could have believed our luck?
All would have been great if it wasn’t for visa. You see, I am not an EU citizen, which means I need a self-employement visa to engage in business activities in Finland. What is more, as Finnish Immigration Service declares: ‘In order to be granted a permit, the applicant's business activity must be profitable.The profitability of the business activity is estimated on the basis of various reports that are obtained in advance, such as the business plan or binding preliminary contracts and funding agreements. The deliberation is conducted by the Centres for Economic Development, Transport and the Environment (ELY centers)'.
The passage goes on to say that visa applicant should have guaranteed means of support for the duration of the visa, which should come from ‘profits of the operations, salary received, personal funding withdrawals, or such items as sales profits, in an amount above the threshold for basic income support throughout the residence permit's period of validity.’ Whether or not the means of support are sufficient is also determined by ELY.
This is worrying for two big reasons. First, how many technology companies do you know that are profitable from day one? Or from year one, for that matter? What this means for all the American, Mexican, Indian or Russian software entrepreneurs is that if you cannot prove profitability of your company from day one, you can’t even dream of getting a working permit to Finland.
Secondly, this criteria puts the entire career of a foreign entrepreneur in Finland into the hands of ELY center, who apparently are the main and only authority to determine the viability of such a business. What if, despite you signing up clients, having a great product and a potential angel investment on the horizon ELY still deems your business activity not profitable? Then you cannot get a self-employment visa to Finland either.
Those two points make the pursuit of entrepreneurship for foreign nationals in Finland really hard. Not impossible (because nothing is, in the mindset of entrepreneurs) but really bloody painful. It puts you in a position where you have to find loopholes like getting your friends or loved ones to found the company for you and then employ you (because the criteria for company’s profitability only applies to non-EU citizens).
Understandably, some of the visa precautions are there to make sure people don’t take advantage of the system and free-ride on Finnish welfare support. Though if a person took the effort to move to Finland and instead of taking a job is trying to create more jobs - why not give a helping hand in that process or at less stop putting spokes in the entrepreneur’s wheels?
Image by kalleboo
Precautions are probably needed indeed, but they could updated for the startup era.
The idea of them is to make sure people aren't coming just for welfare. For startups the requirement to have stable income could be updated to something like "somebody believes he can be profitable and can sponsor him meanwhile".
"Though if a person took the effort to move to Finland and instead of taking a job is trying to create more jobs - why not give a helping hand in that process or at less stop putting spokes in the entrepreneur’s wheels?"
The keyword is TRYING. Imagine if every on who is capable of trying get a Visa, Finland's population is get exploded. :)
Anyway, if you are still in the country and want to have a chance for execute your business idea then I might be able to help you. Leave me an email and I'll contact you.
This is an important issue that deserves attention. I'd love to see a follow up report in which a non-EU potential entrepreneur actually contacts ELY, Enterprise Helsinki, or the "Invest in Finland" folks. There is after all a (small?) chance that these entities actually do "give a helping hand"... I really don't know.
I myself did manage to get permits etc. back in the 80s, before Finland was part of the EU, and these kinds of rules applied to all foreigners.
At the time the crucial ingredient was to find a local who would be willing to backup a guarantee from a local bank which would ensure that the taxes would be payed; if and when a profit was going to be made...
Unfortunately it might take some time before entrepreneurs are really embraced in Finland. Best of luck for you and your project!
I lived a couple of years in Switzerland and they basically have similar requirements for self-employment visas. As a EU citizen it's somewhat easier for me to begin with, but even in that case my lawyer advised against getting the self-employment visa, as I would have to prove profitability before hand and also after six months of running the business.
Not sure how it goes in Finland, but Switzerland has a loophole to go around this. On the lawyer's advise, I founded a Swiss corporation and hired myself as an employee, and applied for a regular employment based visa. The process was smooth and perfectly legal - problem solved.
The situation doesn't seem too dire. Profitability wasn't required, personal savings or wage was also acceptable. The required level of funding is the threshold for basic income support (toimeentulotuki), which means about 420 euros/month above housing costs for a single person.
Surely entrepreneurs always have some plan regarding their own income? The rent and food bills don't pay themselves, regardless of nationality. If not personal savings, then a plan to pay yourself a small wage from the bank loan the company takes on or something. A visa applicant needs to write the plan in the application, but surely all entrepreneurs have such a plan.
@Jani did they not ask to see if the corporation you founded had capital to operate for 1 year?. Can this issue move from the pages of this article and someone present it to authorities to look into it? Some municipalities like Jyväskylä seem to adopt entrepreneurs and the ELY-Keskus here helps this process. What about other smaller cities? What if the organization responsible to check the business plan decides it cannot be profitable? I just got mine after same process but I am lucky to have moved to Jyväskylä the human tech city. I guess I am an unofficial ambassador in this aspect, preaching the goodness of Jyväskylä
Galaxi, not in that sense. I founded a Swiss AG which has a minumum capital requirement of 100k CHF (around 70k EUR at the time) so all that was required was the formal posting of articles of incorporation and paying the capital. This has nothing to do with me being a foreigner, it would apply to a Swiss entrepreneur as well. If I had chosen to form a GmbH, the capital requirement would have been much less.
Oh, and another requirement was that 50% of the company board had to be Swiss residents. This had a template solution as well. The lawyer joined the board at founding, and resigned as soon as I got my residence permit (he charged something like 500 CHF for this, and at least according to him this is a pretty standard procedure for forming foreign-owned entities in Switzerland).
@Jani, Your case was straight forward. Consider the fact that I have to deposit 2,500 Euro in the account, register Oy successfully and give contract to myself.My partner got startti raha and that means the ELY-keskus knows about the company's case yet. I am not given an A status as the C.E.O of the company . This is very uninspiring. And this just happened today unfortunately and guess what? I have a private company also,this company has revenue and paying customer and a project ongoing yet I don't get an A status and I just had an extended visa for one year still B status and it is being given because of section 79 of somelaw which means that I studied and graduated. I am employing 3 people already can you imagine that?
My first post was a happy post because I got a call that the residence permit was ready in the morning and hoping it would be an A status showing I am a business person or employee not some continuous student status. So I was happy, now I am sad and can relate real well to this article, I don't even mention the challenges I went through in the hands of some expert in another city who has an MBA in entrepreneurship yet, if God was not on my side the whole dream would have collapsed. I guess someone has to look into this issue of entrepreneurship properly. Consider the fact that companies are laying of and crazy people like us are giving jobs.
This visa issue needs many perspectives:
* People already working on a status and living and contributing here
* People wanting to enter Finland on a Start-up visa
* People coming here for studies and entering work-life.
* Non-EU Vs EU visas
These are just the basic cases.
IN case of people already working n living here.
These need to be carefully looked at from both Immigration as well as entrepreneurs and job-creation perspective and as such ELY decisions are just not going to cut it.
Also, the Whole issue of immigration: This is a hot n sensitive political topic and so generally tends to take the back seat ( Unless its to impede it => then its not).
For Finland, the Most important thing is the future: It is predicted that by 2030 Only 25 out of 100 Finns are going to be in the workplace. THIS puts enormous pressure on the topic of Immigration.
Where is Finland going to find the People needed in the workforce needed to support the Welfare state ?
Will Just Finnish Entrepreneurs be enough to support this state and create jobs? IF startups are unable to grow and scale into the next Nokia and Kone etc,and attract skilled labor there will not be any sustainable job creation. This means that we need to be really competitive than Silicon valley and London to attract the best in the world.
I suggest that people involved in this topic to take a look at Canada's model for immigration and amend it to suit Finland's needs with more emphasis on "Job creation" along with entrepreneurship.
Moreover, The MOST important thing in Finland that needs to change is the attitude towards Foreigners. I am goin out on a limb and say that Most Foreigners in companies are recognized/used more for their "Menial" or Coding/engineering work than for their managerial, business or entrepreneurial skills ( there are exceptions but very few). THIS needs to change. => This means that skilled foreigners tend to either * emigrate from here OR * Tend to form their own business.
The Finnish workplace needs to embrace diversity of foreign workforce ( which is not happening today ) and encourage integration and inclusion( In this regards, the Swedish model has really made a difference to Sweden and its startups).
Currently, there is a lot of focus on US and EU as marketplaces bcos of the high-tech nature of startups, But the marketplaces are changing faster and the marketplaces are moving more towards the Eastern part of the world. How is Finland coping with this ? From what I have seen here, there is little understanding of BRIC markets and its cultural base for doing business. ( There are some companies like Kone doing well in this regard but not in the startup area). There also needs to be a focus on BRIC collaboration and understanding of those markets ( Silicon Valley is already gearing up for it )!!
More comments welcome...but I see that this debate is just the tip of the iceberg as we need more participation from Foreign entrepreneurs who have gone through the visa process (A, B, Family, etc ) and TE-toimisto, ELY, IIF, AaltoES, ACE etc.
BTW; No comments are meant to be derogatory in any way.
Regarding Ilkka Comment
"The situation doesn't seem too dire. Profitability wasn't required, personal savings or wage was also acceptable. The required level of funding is the threshold for basic income support (toimeentulotuki), which means about 420 euros/month above housing costs for a single person."
So how much is the housing cost for single person.
I live in Student housing which cost me 245 Euros/month.
So to apply for a self employed visa I have to shoe 420+245=665 Euros permonth Income.
Kindly help me in this regards