Company merger in Finland – how the statutory merger process works
A Finnish limited-company merger combines companies through a statutory process rather than a normal business sale. We explain the merger plan, creditor protection, registration stages and the main tax principles.
A company merger is a procedure under the Finnish Limited Liability Companies Act in which the assets and liabilities of one or more companies transfer to another company and the merging company dissolves without liquidation. A merger can be sensible, for example, when simplifying a group structure or combining operations, but it is a statutory process that usually takes several months.
What does a company merger mean?
In a merger, the merging company's assets and liabilities transfer to the receiving company by universal succession when the implementation of the merger is registered. Individual contracts or assets are therefore not transferred separately as in a business transfer. The merging company's shareholders usually receive shares in the receiving company as merger consideration and, in some cases, also cash or other assets.
Mergers are governed by Chapter 16 of the Finnish Limited Liability Companies Act.
What types of merger are there?
- Absorption merger: one or more companies merge into an existing receiving company.
- Combination merger: two or more companies merge by jointly forming a new receiving company.
- Subsidiary merger: a common form of absorption merger in practice, in which a subsidiary merges into its parent company, which owns all of the subsidiary's shares. In this case, no merger consideration is paid.
The four registration stages of a merger
According to the Finnish Patent and Registration Office (PRH), a merger proceeds in the Trade Register in four stages:
- Notification of the merger plan. The signed merger plan must be filed for registration within one month of signing, or the merger lapses.
- Application for a public notice to the merging company's creditors. Creditors are given the opportunity to oppose the merger.
- Notification of implementation of the merger. The merger takes effect only when its implementation is registered.
- Notification of the final accounts. The merging company's board and managing director prepare final accounts after the merger has been implemented.
After the merger plan has been registered, the merger must be decided on within the statutory time limit. According to PRH guidance, the general meeting or board decision must be made within four months of registration of the plan.
What is agreed in the merger plan?
The boards of the merging companies jointly prepare a merger plan. It describes, among other things:
- the companies participating in the merger and the reasons for it,
- the merger consideration and its effect on ownership, where consideration is paid,
- an account of the merging company's assets and liabilities and their valuation in the receiving company, and
- the planned date of implementation and other matters relating to implementation.
Where required by law, an auditor issues a statement on the merger plan.
Creditor protection and timetable
Creditor protection is an essential part of a merger. Under Chapter 16 of the Finnish Limited Liability Companies Act, a creditor of the merging company whose claim arose before the public notice has the right to oppose the merger. A public notice is issued to creditors, and known creditors must be notified of it in writing. If a creditor opposes the merger and does not receive payment or adequate security, the merger may be delayed or prevented while the matter is dealt with by a court.
Registration of the plan, decision-making, the creditor notice periods and registration of implementation typically take several months in total. The timetable should therefore be planned well in advance with financial years and financing in mind.
How is a merger taxed in Finland?
A merger can be treated as tax-neutral only if the conditions of sections 52 a and 52 b of the Finnish Business Income Tax Act (EVL) and related provisions are met. In that case, the continuity principle applies: the acquisition costs of the transferred assets and other tax items carry over to the receiving company as they are.
A merger under the Finnish Limited Liability Companies Act is therefore not automatically tax-neutral. The Finnish Tax Administration's guidance, updated on 24 February 2026, describes the conditions in more detail. In unclear situations, applying for an advance ruling from the Tax Administration before implementation may be justified.
When can a merger make sense?
A merger may be suitable, for example, when the aim is to:
- simplify the group structure and reduce administration,
- combine closely related businesses under the same owner,
- dissolve subsidiaries that are no longer needed, or
- clarify the ownership or financing structure.
A merger is not a universal solution. Its suitability depends on the companies' financial position, contracts, taxation and the owners' objectives.
Merger, share sale or business transfer?
- In a merger, the whole company with its assets and liabilities transfers by universal succession, and the merging company dissolves.
- In a share sale, the company continues as it is, but its owner changes.
- In a business transfer, agreed assets and contracts are transferred, and the selling company remains in existence.
Where the arrangement is between different owners, an M&A transaction is often a more natural route. In ownership restructurings, a share exchange may also be an option.
How can JTT help?
JTT supports mergers on a case-by-case basis with, among other things:
- financial analysis and merger-related calculations,
- valuation where the merger consideration or ownership ratios require it,
- an auditor's statement where one is required, and
- tax analysis and preparation of an advance ruling application.
Legal documents are prepared in cooperation with the client's own lawyer or, as agreed, JTT's partner law firm. Read more about our corporate transaction services.
Are you planning a merger?
Let's discuss whether a merger suits your situation and how the process should be scheduled. Contact us.
