Starting a business in the Nordic and Baltic countries involves several key steps, although the specifics vary by country. These steps generally include choosing a legal structure, registering the company, and complying with local tax and administrative requirements. While the process is highly digitalized in some countries like Estonia, others may require more traditional, in-person procedures for non-residents.
General Steps for Starting a Business in the Nordics and the Baltics
- Choose a Business Form: The most common option is a limited liability company (LLC), known as an OÜ in Estonia, SIA in Latvia, UAB in Lithuania, ApS in Denmark, and AS in Norway and Sweden. This structure limits personal liability. The required minimum share capital varies significantly, from as low as €1 in Estonia (with conditions) and Latvia to €2,500 in Lithuania. Other forms, like a sole proprietorship, are also available and are simpler to set up, but they come with unlimited personal liability.
- Prepare and Submit Documents: You’ll need to draft foundational documents, such as a memorandum of association and articles of association. These outline the company’s purpose, structure, and rules. In many countries, you must provide proof of a registered address within the country and evidence of a bank account deposit for the share capital.
- Register the Company: The process is highly dependent on the country’s official registries.
- Estonia is renowned for its e-Residency program, which allows non-residents to establish and manage a company online. Registration is quick, often taking just a few hours.
- In Sweden, the process is managed through Bolagsverket (the Swedish Companies Registration Office) and the digital service verksamt.se.
- In Norway, the primary registry is the Brønnøysund Register Centre, and most of the process is handled via the Altinn service.
- In Denmark, the Danish Business Authority handles registrations, which can be done online.
- In the Baltic states, you register with their respective Registers of Enterprises (e.g., in Latvia) or similar government bodies.
- Tax and Compliance Registration: After company registration, you must register for taxes.
- This includes obtaining a Tax Identification Number (TIN) and registering for Value-Added Tax (VAT) if your annual turnover exceeds the country’s threshold.
- If you plan to hire employees, you’ll need to register as an employer and set up a payroll system.
- It’s crucial to understand and comply with local labor laws and social security contributions.
Specific Country Considerations
- Estonia: Known for its digital infrastructure and e-Residency. You can establish a private limited company (OÜ) with a symbolic €1 share capital, though you must pay it in full before the company can distribute profits.
- Sweden: A local personal identity number is often needed for fully digital processes. For those without one, a paper application is an option, though it’s slower.
- Norway: You’ll need a Norwegian business address. The minimum share capital for an AS (private limited company) is NOK 30,000.
- Denmark: A Danish social security number (CPR) and a digital ID (MitID) are needed to use the online self-service for registration.
- Latvia: The minimum share capital for a SIA can be as low as €1, with specific ownership restrictions.
- Lithuania: A private limited liability company (UAB) requires a minimum share capital of €2,500. All legal documents must be in Lithuanian.
It’s highly recommended to consult with a local lawyer or accounting firm to navigate the specific legal and financial requirements of the country where you wish to set up your business.
Why is it worth doing business in the Nordics and the Baltics?
The Nordic and Baltic regions, collectively known as the NB8, are increasingly attractive destinations for businesses and investors. While each country has its unique strengths, the regions share a number of compelling characteristics that make them excellent places to operate.
Key Advantages of Doing Business in the Nordics
- Political and Economic Stability: Nordic countries consistently rank at the top of global indices for political stability, low corruption, and high levels of social trust. This creates a secure and predictable environment for long-term business planning and investment.
- Highly Skilled and Educated Workforce: The region boasts a highly educated population with a strong emphasis on innovation, research, and development. High proficiency in English, particularly among the younger generation, makes it easy to hire and work with local talent.
- Innovation and Technology: The Nordics are global leaders in innovation, with a thriving tech and startup ecosystem. Sweden is home to major companies like Spotify and Klarna, while Finland has a long history of tech innovation, from Nokia to games like Angry Birds. The region’s focus on digitalization is a key driver of business efficiency.
- Sustainability and Green Economy: Nordic countries are at the forefront of the green transition, with strong commitments to sustainable practices and clean energy. This presents significant opportunities for companies in renewable energy, sustainable technologies, and circular economy models.
- High Quality of Life: High standards of living, excellent public services (healthcare and education), and a strong social safety net make the Nordic countries very appealing to top talent, helping businesses attract and retain employees.
Key Advantages of Doing Business in the Baltics
- Digitalization and Ease of Business: The Baltic states, particularly Estonia, are pioneers in digital government services. Estonia’s e-Residency program has made it incredibly easy for entrepreneurs from around the world to start and manage a business entirely online. The other Baltic states are also rapidly digitalizing their administrative processes.
- Cost-Effectiveness: While the Nordic countries can be expensive, the Baltics offer a more cost-competitive environment. This applies to both labor costs and operational expenses, making the region an attractive hub for business process outsourcing, shared services, and R&D centers.
- Strategic Location: Located at the crossroads of Northern, Eastern, and Western Europe, the Baltics serve as a strategic gateway. Their well-developed infrastructure, including deep-water ports, railways, and international airports, facilitates trade and logistics across the continent.
- Dynamic Startup Ecosystem: The Baltics have become a hotbed for startups, with a vibrant and growing ecosystem. Estonia is known for its “startup nation” status, having produced several “unicorns” like Skype and Bolt. This dynamic environment is supported by a strong entrepreneurial culture, tech-savvy talent, and a growing pool of venture capital.
- Open and Flexible Economies: The Baltic economies are known for their pro-business, liberal policies and high levels of economic freedom. Governments are generally supportive of foreign investment and are actively working to improve the business climate.
In summary, the Nordic and Baltic regions offer a powerful combination of stability, innovation, and strategic advantages. The Nordics are ideal for businesses prioritizing a highly skilled workforce, a strong focus on sustainability, and a mature, high-trust environment. The Baltics, on the other hand, provide a more cost-effective and agile base, with a dynamic, digitally-forward ecosystem that is particularly well-suited for technology startups and those looking for a strategic bridge between different European markets.
