Accounting obligations of foreign companies

The President has confirmed an amendment to the Accounting Act (HE 221/2021, TaVM 3/2022), according to which a foreign company is required to keep accounts if the foreign company has business operations in Finland or its operations abroad are actually managed from Finland.

The accounting obligation also applies to a legal entity outside the European Economic Area that is effectively managed from Finland. Also, in the event that a legal entity outside the European Economic Area has a permanent establishment in Finland but does not have financial statements that give a true and fair view, the obligation to prepare financial statements in accordance with the provisions of the Accounting Act arises.

The amendments do not impose an obligation on non-EEA companies established in Finland to prepare their accounts twice, nor do they impose an obligation to keep their accounts in Finland. If the company has properly kept accounts in its country of residence, it is sufficient for the company to allow the authorities access to that accounting material abroad. The new regulations only require these companies to keep accounts if the company does not otherwise have comprehensive financial statements available.

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