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Business Legislation

The goal of the Federation of Finnish Enterprises is that the law will be developed to correspond better to the needs of small and medium-sized enterprises. The FFE works to ensure that the principles of good regulation are also observed in practice. 

The cost of regulation to enterprises should be reduced by 25 percent from the current level by the year 2025. 70 percent of entrepreneurs feel that the regulatory burden has grown over the years, while 68 percent feel that the deregulation measures of the Government have been inadequate (summer 2017). Two thirds would employ more people if SMEs were subject to fewer regulations (Entrepreneurship Barometer 1/2018). The willingness to hire is highlighted especially among enterprises that already have employees. In order to reach the goal, legislators must be given effective tools: the one-in, one-out tool should be quickly extended to be available in the law drafting measures of various ministries, and the SME test should also be implemented in Finland.

We need a more ambitious goal in the next term of government to reduce the cost of regulation to enterprises. We must adopt a one-in, two-out approach: If new regulatory measures result in an additional obligation of one euro to enterprises, the cost of regulation to enterprises should in turn be reduced by two euros. The SME test should be included in the national impact assessment of all drafting of national legislation and EU projects. Micro-enterprises should be excluded from the regulatory measures, if the impact assessment provides good cause for this. 

The impact of EU regulation on entrepreneurship must be widely acknowledged, and resources to the official lobbying of Finland must be increased. EU regulation has a significant impact on both the enterprises operating only domestically (more than 50 percent of the regulation aimed at enterprises stems from EU legislation) and enterprises that have expanded elsewhere in the internal market (roughly 25 percent of enterprises directly utilize the internal market). Paying attention on the drafting or quality of domestic regulation only is inadequate from the perspective of enterprises. The official EU lobbying of Finland is currently not professional or consistent in all respects. The situation can be addressed with the guidance of the Council of State as well as by increasing the resources and skills of ministries or allocating them better. 

Minimum capital requirement of private limited companies must be removed. Removal of the minimum capital of private limited companies would release almost 700 million euros, conservatively estimated, for the other needs of enterprises. The current minimum capital requirement and the related administrative requirements restrict the establishing of enterprises, particularly in the service industries. This long-term goal of the FFE is becoming a reality during this term of government. 

Micro-enterprises must be exempt from the audit obligation. All EU member states, Malta excluded, have higher audit limits than Finland. If micro-enterprises were exempt from the audit obligation, about 30 000 enterprises would be subject to the audit obligation. This goal of the FFE is becoming a reality during this term of government. Enterprises that still see auditing as necessary could appoint an auditor in future as well, even though this would not be required by law. 

Maximum amounts must be prescribed for the collection charges of corporate debts. The Debt Collection Act should be amended so that maximum amounts are also prescribed for the collection charges of corporate debts. The collection charges should be reasonable in relation to the amount of debt. The amendment would result in cost savings for enterprises and clarify the legal position. Clear rules would also guarantee the judicial protection of the creditor.

Entrepreneurs must be allowed to start anew, and obstacles to entrepreneurship must be cleared. Establishing a company in Finland is, in principle, easy and fast. If the entrepreneur has previously failed in entrepreneurship or an enterprise that could continue to operate is temporarily insolvent or in danger of becoming insolvent, our legislation and systems pose multiple obstacles to establishing a new company or continuing to engage in profitable business. Removing or lowering these obstacles would allow us to retain jobs and find new employment for the entrepreneur as well as reduce costs to society. These obstacles must be comprehensively surveyed and cleared during the next term of government.

Consumer law regulation must be well-balanced from the perspective of self-employed people. Legislation to protect the rights of consumers is under preparation both in the EU and in Finland. The plans involve the extension of the powers available to authorities, tightening of sanction systems, expansion of the group action possibility and harmonization of regulation concerning liability for error. The new regulatory measures should not lead to a situation where smaller enterprises cannot operate in the consumer market due to an excessive burden.

The agreements between enterprises must be well-balanced in terms of rights and responsibilities. A small enterprise does not always have the possibility to negotiate with a larger contracting partner (a publicly owned body or large company) on the terms and conditions of an agreement and, as a result, the terms may be unfair as far as the terms of payment, for example. The law should guarantee that the terms and conditions are reasonable for all parties.

Scams targeting enterprises must be brought under control. For this purpose, a general picture of the frauds that enterprises are subject to should be formed and the legislation re-assessed. Scams targeting enterprises and criminal fraud have significantly increased in the 21st century (other crimes against property have decreased). Two thirds of self-employed people without employees have been a target of a scam at least once during the year. Directory service scams alone cost more than 20 million euros per year to enterprises.

Environmental laws must enable profitable business, new investments and reasonably-priced construction. Unnecessary permits must be given up, and post-control must replace advance control. Permits and land use solutions must be granted within a reasonable, foreseeable time. A one-stop shop approach must be applied where an enterprise can receive all the required permits and solutions to implement its project from a single place. 

The Federation of Finnish Enterprises has had an influence on the following: 

Rationalization of regulation. One of the top projects of the current government is the rationalization of regulation in the manner that the FFE has hoped for. Each ministry has examined the redundant provisions in its industry and strived to remove them. The Ministry of Economic Affairs and Employment has adopted the one-in, one-out tool, which allows enterprises to estimate and reduce the cost of regulation. Attention has been given to the quality of regulation by establishing a Regulatory Policy Council.

Debt Collection Act. At the initiative of the FFE, the Debt Collection Act was amended so that an entrepreneur may object against inappropriate debt collection measures resulting from e.g. scam agreements. The rules of draft collection have also been clarified so that only clear, undisputed debts may be collected using a draft. An entrepreneur may not obtain a bad credit record due to scam invoices.

Act on Limitations. In 2015, the Act on Limitations was amended so that a debt based on an agreement will expire definitively after 20 years of it falling due. If the creditor is a natural person, the period of limitation is 25 years. Previously, the law did not include a provision on the definitive expiration of a debt in a situation where the creditor has not applied for grounds for execution concerning the debt. The current Act on Limitations shall be applied retroactively so that the oldest debts will expire definitively no sooner than on 1 January 2020.

Enforcement Code. In 2018, the Enforcement Code was amended, at the initiative of the FFE, so that a person who has been unemployed for a long time can obtain free months or relief to the amount of protection portion during recovery proceedings when becoming an entrepreneur. 

Debt adjustment of an entrepreneur. Since the beginning of 2015, entrepreneurs have also been able to seek debt adjustment. The private and business-related debts of a severely indebted entrepreneur with a business name can be restructured, and profitable business operations may continue. The change was the result of an initiative proposed by the FFE.

Business prohibition. The law has been amended so that an entrepreneur may no longer be disqualified from engaging in business activities on the grounds that the public payments of the enterprise are unpaid due to insolvency.

Shopping hours. At the initiative of the FFE, a reform was implemented in 2014 granting small entrepreneurs in shopping centres the right to keep their shops closed one day a week, on the day of their choice. Enacted to protect the entrepreneur, this provision remained in force also when all opening hour restrictions were removed during the ongoing term of government.

Environmental proceedings. For a long time, the FFE has spoken in favour of cutting red tape surrounding environmental permits. At the government’s proposal, environmental proceedings have, indeed, been streamlined by e.g. removing some of the environmental permit requirements. In addition, the threshold for a permit requirement has been lifted in some operations and registration procedures have been adopted instead. 

One-stop shop bill. We have accepted a law that will, upon its entry into force, allow enterprises to apply for environmental permits using a one-stop shop principle. The enterprise can approach only one authority through an electronic system, regardless of the location, the number of required permits and the different licensing authorities. Various report and hearing proceedings will also be removed, and the process will become more entrepreneur-friendly.

Waste management industry. The Waste Act has been amended so that waste management tasks are shifted from municipal bodies to the free market. In addition, an electronic marketplace will be set up to enable genuine competition in the industry. The change will benefit not only private waste management enterprises, but also other enterprises producing waste. As competition steps up, services are expected to improve and the prices to be determined by the market. 

Misleading marketing and identity thefts. The FFE has joined forces with the police and other controlling authorities to eradicate inappropriate behaviour more effectively.