When entering Finland, foreign companies usually choose between:
- Opening a subsidiary
- Using an Employer of Record
Let’s compare both models.
1. Legal Structure
2. Cost Structure
EOR:
- Monthly service fee
- Employer contributions included
- No corporate accounting obligations
Subsidiary:
- Incorporation costs
- Accounting & auditing
- Corporate income tax (20%)
- Ongoing compliance expenses
3. Risk Level
- Subsidiary creates immediate tax presence in Finland.
- EOR may reduce permanent establishment risk if properly structured.
4. When to Choose EOR
- Market testing
- Short-term projects
- Hiring 1–5 employees
- Avoiding corporate setup
5. When to Choose a Subsidiary
- Long-term presence
- Large workforce
- Physical operations
- Significant turnover in Finland
Final Thought
EOR is a strategic entry tool.
Subsidiary is a long-term investment.
The right choice depends on scale, duration and tax structure.