More companies and tax revenues to Finland: Identifying foreign entrepreneurs online creates new opportunities - The Finnish Tax Administration’s SisuID-pilot

Nixu Corporation, Press release on February 26, 2020 at 10 AM EET

The Finnish Tax Administration together with cybersecurity company Nixu and Digital Living International piloted SisuID to identify foreign entrepreneurs online so that registering a new company in Finland could be made digital, easy and fast. This user-friendly process would help Finland to attract more companies and more tax revenues to Finland.

How to start a business in Finland digitally from abroad?

The Finnish Tax Administration, Vero, wanted to find out quickly how this process could be made fully digital and as smooth as possible for any foreign entrepreneur. Vero has demonstrated the power of an open and inclusive public-private ecosystem approach. The approach helped Vero together with all the right stakeholders to explore the process bottlenecks and how Finland could offer a seamless service offering for foreign entrepreneurs. The SisuID team, including Nixu and Digital Living International, leads the project to map the current entrepreneur’s journey and gather the development requirements from all the parties involved in that journey.

“We see that there is an urgent need for Finland to strengthen our capabilities to compete internationally for new taxpayers i.e. companies, talent, and investments. Finnish Tax Administration wants to boost the competitiveness of the Finnish economy by helping to remove the identified obstacles,” says Client Director Miika Wires from The Finnish Tax Administration.

The current path for setting up a company is long

Currently, for example, Chinese entrepreneurs would need to have a local board member residing in the European Economic Area (EEA) to set up a Finnish non-listed company. Additionally, the new company needs to meet specific requirements that the Finnish authorities and regulators have set before they can get their company registered to the Finnish Trade Register.

The trust level of supplementary data required in different steps of the company registration process differs significantly from making the first contact with Vero to having a company finally registered in the Trade Register. The entrepreneurs also still need to sign official forms that include only Finnish text, which means that either they need to hire a translator or sign documents that they cannot understand.

After completing the registration, the new company also may need other local services such as accountants, Finnish corporate bank accounts, insurance, and legal services. The entrepreneur needs to fill in personal and company details many times over for all the stakeholders in the process.

Digitalizing the process

“We feel that open collaboration is the only way to create innovations for the whole society. This project with Nixu and Digital Living helped us to create better foundations to speed up this development in the Finnish economy,” Miika Wires explains.

The project formed a vision of a single, easy process for the entrepreneur to get established in Finland. This user-friendly process would help Finland to attract more companies and more tax revenues to Finland. Both public and private sectors require capabilities to create digital trust to be able to improve the process.

Establishing digital trust starts with identifying the person acting on behalf of the company. Based on the initial identification, personal digital identity is created. With that digital identity, you can transfer personal, company data reliably across service silos.

With digital trust in place, the company registration process can be significantly streamlined and automated. Digital trust also reduces the burden from the entrepreneurs since they would need to give the information only once. Ideally, by using a digital self-service supported by SisuID, the entrepreneur could set up the company even without traveling to Finland.

The pilot shows that Finland has all ingredients for a fully digital path

“The lack of reliable digital identities for foreigners is the first big obstacle for every stakeholder involved in the project. But luckily, we already have all the required technologies available to create a digital trust for the processes and automate this fast track to Finland and Europe,” says Pirkka Frosti, the CEO of Digital Living International and one of the leading figures behind SisuID.

“Vero proved that with the right mindset and combining our efforts, we could start seeing great progress in just a few months of work,” Frosti continues.

The key finding was that after creating digital trust, there are no significant roadblocks to enable a fully digital path for the foreign entrepreneur to start a company in Finland. Even legislation changes of transferring data across the public and private sectors may be avoided if the user controls the data via the digital identity.

Another finding was that the digital identification and authentication of the user could be separate from the Know-Your-Customer (KYC) process required by the bank to comply with legal Anti-Money Laundering (AML) requirements. By separating these two, the digital identification and authentication can provide the user the means to supply further AML information as digital self-service instead of the current, manual, and work-intensive processes.

How to make Finland the best country to start a company?

We are not serving the foreign companies digitally yet, but our economic growth and competitive advantage will depend upon it in the not-so-distant future. Estonia has been providing capabilities to start a company remotely through their eResidency program. Estonia has estimated that by 2025, a business established through the program has created EUR 1.4 billion in direct and indirect economic benefits.

Vero is taking fast actions to start a continuation project under a new program called Digital Fast Track.

“With the public and private sector organizations joining forces to create society-wide digital trust capabilities, Finland can soon appeal as a viable option for foreign entrepreneurs for doing business. This can become their gateway to the European market,” says Joonatan Henriksson, Head of Digital Business at Nixu.

Nixu Corporation

Further information:
https://sisuid.com/cases/
Joonatan Henriksson, Leader of SisuID-project, Nixu Corporation
joonatan.henriksson(at)nixu.com

Distribution:
Principal media
www.nixu.com

SisuID in Brief:
The Sandbox of Trust is a Finland-based digital identity initiative, led by cybersecurity company Nixu, Vastuu Group, Digital Living International, the Technology Industry of Finland, and funded by the pilot members together with Sitra. It provides normal and strong authentication for service providers in the public and private sectors at low-cost. For users, it is free of charge. All the code generated by the community will be published as open source code to produce a national identification solution. The findings of SisuID pilots help to advance the digitalization of the identification and knowledge of public and private sector users.
www.sisuid.com

Nixu in Brief:
Nixu is a cybersecurity services company on a mission to keep the digital society running. Our passion is to help organizations embrace digitalization securely. Partnering with our clients we provide practical solutions for ensuring business continuity, an easy access to digital services and data protection. We aim to provide the best workplace to our team of over 400 cybersecurity professionals with a hands-on attitude. With Nordic roots we serve enterprise clients worldwide. Nixu shares are listed on the Nasdaq Helsinki stock exchange.
www.nixu.com