KF Biz guide
Toiminimi vs Oy
A practical comparison of a private entrepreneur (toiminimi) and a limited liability company (osakeyhtiö/Oy) for someone starting a business in Finland.
The short answer
There is no universally “best” form.
A toiminimi can be a practical choice for a person running a relatively small business mainly based on their own work. An Oy can be suitable for many types of business and may make more sense as ownership, risk, financing or operations become more complex.
Choose based on your actual business model rather than simply choosing the form that sounds more professional.
At a glance
| Question | Toiminimi | Oy |
|---|---|---|
| Can one person start it? | Yes. | Yes. A one-person Oy is possible, with the required board arrangements. |
| Administration | Generally lighter for a simple small business. | More formal company structure and governance. |
| Responsibility | The entrepreneur has personal responsibility for the business's obligations. | Liability is generally tied to the company, but owners and management can still have personal responsibilities in specific situations. |
| Share capital | Not applicable. | A private Oy has no minimum share-capital requirement. |
| Suitable starting point | Often practical for small-scale activity based mainly on the owner's work. | Often useful when the business has broader operations, multiple owners, investment needs or a structure that benefits from a separate legal entity. |
When to consider toiminimi
- You are starting alone.
- The business is relatively small or based mainly on your own work.
- You want a comparatively simple structure.
- You are testing a business idea before building a larger operation.
Remember that “simple” does not mean “no obligations”. You still need to handle taxation, bookkeeping, possible VAT registration, insurance and other requirements that apply to your activity.
When to consider an Oy
- You expect the business to grow or become more complex.
- There will be multiple owners.
- You want a separate legal entity for the business.
- The business involves higher commercial or financial risks.
- You may need external investment or a structure suitable for bringing in shareholders.
An Oy does not automatically remove all personal risk. Directors, shareholders and other people involved in the company can have personal responsibilities in particular circumstances.
Questions to ask before deciding
- How much revenue do I realistically expect?
- How much financial or contractual risk will the business take?
- Will I have employees or business partners?
- Will I need outside financing or investors?
- How much administration am I prepared to handle?
- What does my accountant or business adviser recommend for my specific situation?
What about VAT?
VAT is not simply a toiminimi-versus-Oy question. VAT liability generally depends on the business activity and turnover rules rather than the company form. In Finland, the small-business threshold is currently €20,000 in a calendar year, subject to the applicable rules.
Official sources
Check the current rules
- Suomi.fi — Comparing company forms
- Suomi.fi — Setting up a limited liability company
- Suomi.fi — Forms of enterprise
- Finnish Tax Administration — VAT registration
Information checked October 2026. This guide is general information, not legal or tax advice.
Still unsure?
Let's look at your situation.
KF Biz can help you compare the practical considerations before you choose your business form.