Due to a new tax law effective January 1, 2021, corporate entities whose place of effective management is located in Finland are considered resident taxpayers in Finland. The place of effective management is where the corporation’s highest-level decisions concerning daily management are made.
In practice, the change brings Finnish corporate tax regulations more in line with many other countries, and it only affects foreign corporate entities whose place of effective management is in Finland. The change does not concern foreign corporate entities whose decision-making takes place outside Finland or corporate entities that are already treated as resident taxpayers in Finland.
Starting January 1, foreign corporate entities that are considered resident taxpayers must report their entire worldwide income to the Finnish Tax Administration by filing a tax return, and Finland has the right to tax their income from everywhere in the world.
To sum up, whereas the new law is a major change to previous practices, it shouldn't affect foreign companies' willingness to invest in Finland. As long as the international corporation's highest-level decisions are made in another country, the worldwide income will not be taxed in Finland. This is practically always the case with foreign companies who register a company (subsidiary or branch) in Finland and start their business operations in Finland.