Hiring contractors in Finland requires a structured approach to tax compliance, pension registration, and employer obligations. For companies without a Finnish legal entity, partnering with an umbrella company in Finland offers a clear and compliant way to engage talent without establishing a local presence.
The umbrella model ensures that the contractor is legally employed under Finnish regulations while providing services to the client organisation. The umbrella company acts as the employer, managing payroll, social contributions, and required filings.
How the Umbrella Model Operates in Finland
In Finland, an umbrella company becomes the legal employer of the contractor, taking care of:
- Drafting compliant Finnish employment contracts
- Income tax withholding and reporting through the Incomes Register (Tulorekisteri)
- Pension enrolment under TyEL (earnings-related pension system)
- Health and social insurance contributions via KELA and other mandatory schemes
- Annual leave and sick pay administration as required by Finnish labour law
This structure ensures that all statutory responsibilities are met while allowing client organisations to focus on project delivery.
Key Benefits of Using an Umbrella Company in Finland
- Avoids the need for setting up a Finnish subsidiary
- Ensures full compliance with tax, pension, and employment law
- Accurate, local payroll processing in EUR
- Smooth onboarding of consultants relocating to or residing in Finland
- Transparent handling of benefits and deductions
The model supports short-term consulting arrangements, cross-border hiring, and remote work where full entity setup is not justified.
Common Users of Umbrella Company Services in Finland
- Recruitment firms placing consultants into Finnish organisations
- Global companies working with remote contractors based in Finland
- Employers seeking a compliant way to test the Finnish labour market
- Project-driven businesses operating in energy, tech, and infrastructure sectors
Employer Responsibilities Covered by the Umbrella Company
- Registration of employment with Finnish authorities
- Withholding of income tax and payment of employer contributions
- Reporting earnings and deductions to Tulorekisteri
- Pension scheme enrolment and contributions (TyEL)
- Coordination of social security and applicable insurance schemes
Conclusion
Using an umbrella company in Finland gives businesses a practical, compliant route to engage contractors without administrative complexity. It enables fast access to skilled talent while fulfilling all local employment obligations.
Whether you’re hiring remote workers, relocating specialists, or delivering client projects in Finland, the umbrella model provides a legally sound and efficient solution.
Interested in Umbrella Company solutions across the Nordics?
Northern Partners offers compliant umbrella setups for consultants and contractors in all four countries.
Read more about Umbrella Company Denmark, Umbrella Company Norway, and Umbrella Company Sweden – and simplify your setup without opening a local company.
