Legal Updates

Legal updates covering current topics.

Legal Updates / 01.07.2019

Request for statement regarding proposed changes to procurement laws

The Ministry of Economic Affairs and Employment requests for statements regarding proposed changes to the procurement laws.

The Ministry has prepared a draft Government Bill, dated 14 June 2019, which would amend the procurement laws by introducing the use of electronic procedures in criminal record checks. The purpose of the Bill is to clarify certain rules relating to procurement procedures and rectify certain technical errors currently included in the procurement laws. Read more

Legal Updates / 01.07.2019

Binding targets for zero- and low-emission vehicles in public procurement

The Council of the European Union has recently adopted binding targets for zero- and low-emission vehicles in public procurement. According to the Council, the new rules will, inter alia, stimulate innovation. Zero- and low-emission vehicles will in turn help the EU meet its Paris Agreement commitments.

The new rules are set out in a draft directive amending the Clean Vehicles Directive (2009/33/EC). The scope of the rules is broadened in terms of the procurement practices covered. For example, refuse collection and postal delivery services fall within the scope of the new rules. Read more

Legal Updates / 11.02.2019

Minimum share capital requirement of Finnish private limited companies removed as of 1 July 2019

Finland follows suit of the majority of the EU countries as the proposed changes introduced by Government Bill 238/2018 to corporate legislation regarding minimum share capital requirement of Finnish private limited liability companies were approved on 8 February 2019. The present requirement for a Finnish private limited liability company to have a minimum share capital of EUR 2,500 will be lifted as of 1 July 2019. Beginning from 1 July 2019, incorporating and registering a Finnish private limited liability company no longer requires its founding shareholders to make a payment to the company’s share capital. This will not, however, affect Finnish public limited liability companies which are still required to have a minimum share capital of EUR 80,000. Read more

Legal Updates / 07.02.2019

Finnish transitional regime for investment services post-Brexit expected to be approved soon

The Finnish Government’s proposal for a transitional permissions regime and a third country firm licence was approved by the Parliament’s commerce committee on Tuesday. This means that UK firms are one step closer to being able to continue the provision of services post-Brexit. Read more

Legal Updates / 29.11.2018

A new Data Protection Act to enter into force soon

Somewhat belated, but on 13 November 2018 the Finnish Parliament approved of the new Data Protection Act (DPA), repealing the old Personal Data Act from 1999. The aim was to have the DPA approved already in May 2018, but the government proposal for the DPA was passed to the Constitutional and Administrative Committees for examination and their final statements were given in October. This led to the DPA being approved by the Finnish Parliament only in November 2018. As soon as ratified by the President of Finland the DPA will enter into force (probably still during 2018). Read more

Legal Updates / 01.10.2018

Broader new limitation on interest deductions

The deductibility of interest expenses has been limited since 2014, but only in relation to related party debt. Currently, interest expense is always deductible up to the amount of interest income. Further, interest expense exceeding interest income (“net interest expense”) is deductible provided that the amount does not exceed EUR 500,000. If the said EUR 500,000 threshold is exceeded, Finland applies a fixed ratio rule limiting a Finnish company’s tax deductions for net interest expenses on related party debt to 25% of its EBITD (as adjusted for tax purposes). For calculation purposes, however, both related party and third party debt are taken into account and in case the net interest expenses exceed EUR 500,000 even with 1 EUR, the entire amount is subject to the fixed ratio rule. The rules apply on a company-by-company basis, although, for example, amounts of group contributions are added back or deducted, as applicable, from the EBITD figure. Further, the restrictions on interest deductibility are not applied if the borrower company’s equity ratio (equity vs total balance) is equal to or higher than the same ratio calculated on the basis of a consolidated group balance sheet of the ultimate parent (the “balance sheet test”). In addition, certain industry sectors, such as banking, insurance and most real estate businesses, are currently also excluded from the application of the rules. Read more

Legal Updates / 25.06.2018

Finnish FSA issues new rules on governance under MiFID II

New guidelines on organisational requirements and operating procedures for investment firms, banks and other investment service providers were issued by the Finnish FSA with effect from 1 September 2019. The new guidelines provide updated requirements on investor protection, including detailed rules on safeguarding of client assets, product approval process and governance in general as well as more stringent rules on inducements. The guidelines follow the implementation of the Delegated Directive (EU) 2017/593 on safeguarding of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees. Read more

Legal Updates / 29.05.2018

Government Bill 175/2017 regarding amendments to the subsidy scheme for renewable energy approved by the Finnish Parliament

The Finnish Parliament has on 23 May 2018 approved the amendments to the Act on Production Subsidy for Electricity Produced from Renewable Energy Sources (1396/2010) according to which a new technology-neutral production subsidy scheme for renewable energy sources based on a bidding process will be implemented. The new subsidy scheme will apply to wind power, biomass gas, wood fuels, solar power and wave power investments. Only new projects will be allowed to participate in the bidding process. Read more

Legal Updates / 23.01.2018

Government proposal promotes broader base for limitations on interest deductions

The deductibility of interest expenses has been limited since 2014, but only in relation to related party debt. Currently, interest expense is always deductible up the amount of interest income. Further, interest expense exceeding interest income (“net interest expense”) is deductible provided that the amount does not exceed EUR 500,000. If the said EUR 500,000 threshold is exceeded, Finland applies a fixed ratio rule limiting a Finnish company’s tax deductions for net interest expenses on related party debt to 25% of its EBITDA (as adjusted for tax purposes). For calculation purposes, however, both related party and third party debt are taken into account and to the extent that the interest expenses exceed EUR 500,000, the entire amount is subject to the fixed ratio rule. The rules apply on a company-by-company basis, although, for example, amounts of group contributions are added back or deducted, as applicable, from the EBITDA figure. Further, the restrictions on interest deductibility are not applied if the borrower company’s equity ratio (equity vs total balance) is equal to or higher than the same ratio calculated on the basis of a consolidated group balance sheet of the ultimate parent (the “balance sheet test”). In addition, certain industry sectors, such as banking, insurance and most real estate businesses, are currently also excluded from the application of the rules. Read more

Legal Updates / 05.01.2018

Finnish FSA issues guidelines on national language and filing requirements for KIDs under the PRIIPs Regulation

The PRIIPs Regulation (EU Regulation 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs)) entered into force on 1 January 2018. The objective of the PRIIPs Regulation and the corresponding delegated regulation is to provide retail investors with clear and summarised information on packaged retail and insurance-based investment products, presented in a uniform and harmonised manner in a Key Information Document (KID). The KID provides information on the key characteristics and complexity of the investment product as well as the related risks and costs. The purpose of the KID is to enable retail investors to compare and choose financial products based on clear, reliable and comparable information. Read more

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