What is an employer of record in Finland?

You have found the person you want to hire in Tampere. They can start in three weeks. You do not have a Finnish company, a Finnish payroll or a Finnish pension policy – and setting all of that up takes months.

That gap is what an employer of record in Finland solves. Below we explain what an EOR actually is, what Finnish law calls it and where the model stops – and, at every step, how we handle it at Barona. Acting as the legal employer is our everyday work: we employ more than 30,000 people a year, from 96 nationalities. If you already know you need a partner, see our EOR services in Finland.

In short

• An EOR is the legal employer of your team in Finland. You choose the people and direct the work.
• Finnish law calls this employee leasing. It is an established legal model, not a grey area.
• The applicable collective agreement sets the minimum terms, so it has to be identified first.
• Occupational safety, permanent establishment, branch registration and sector licences stay with you.
• For non-EU hires, the right to work has to be verified before the employment starts.

What is an EOR?

An employer of record (EOR) is a company that becomes the legal employer of your people in a country where you have no legal entity of your own.

The EOR signs the employment contract, pays the salary, withholds taxes, reports to the authorities, arranges the statutory insurances and carries the employer’s legal obligations.

You keep what matters commercially: you choose who gets hired, you direct the work day to day, and you own the customer relationship.

The EOR is the employer on paper. You are the employer in practice.

Employer of record Finland: what the law actually calls it

Here is the thing no global EOR landing page will tell you: Finnish legislation does not use the term “employer of record” at all.

What it does recognise is employee leasing – työvoiman vuokraus, also called temporary agency work.

The Employment Contracts Act (55/2001), chapter 1, section 7(3), allows an employer to assign an employee to work for another employer, the user enterprise, with the employee’s consent. When that happens, in the words of the official English translation, “the right to direct and supervise the work is transferred to the user enterprise together with the obligations stipulated for the employer directly related to the performance of the work and its arrangement.”

That is the EOR model, written into Finnish statute more than twenty years ago. Three parties:

• the employee
• the legal employer (the EOR)
• your company as the user enterprise.

So an EOR arrangement in Finland is not an untested contractual wrapper. It sits inside an established body of law, with a defined split of duties – and with one rule that catches almost every foreign employer off guard.

The collective agreement rule – and why it comes first

Finland has no minimum wage set by statute. Minimum pay levels, working time provisions and much else are set in sectoral collective agreements (työehtosopimus, TES).

According to a study commissioned by the Ministry of Economic Affairs and Employment, roughly 89 % of Finnish employees are covered by a collective agreement (agreements concluded in 2021 and spring 2022, published February 2024).

What the law says about leased employees. The Employment Contracts Act, chapter 2, section 9, sets out a cascade:

1. If the leasing employer is not bound by a collective agreement, then “at least the provisions of the collective agreement … to which the user enterprise is bound or a generally applicable collective agreement shall be applied to the employment relationship of the hired worker.”
2. If no collective agreement applies at all, the employee’s pay, working hours and annual leave must follow the agreements or practices generally applied by the user enterprise.

What it means for you. A credible EOR partner cannot simply quote you a salary and move on. The applicable collective agreement sets the floor – for pay, for overtime premiums, for sick pay, often for a holiday bonus.

Who does what: the split of duties

Barona – legal employer	Your company – user enterprise
Signs the employment contract	Chooses who is hired
Pays wages, withholds tax, reports earnings to the Incomes Register	Directs and supervises the daily work
Arranges pension (TyEL), accident and other statutory insurance	Ensures the work at the site is safe and healthy
Arranges statutory occupational health care	Informs the EOR of hazards and required safety measures
Identifies and applies the applicable collective agreement, as confirmed in the order confirmation	Provides induction to the work and the workplace
Manages leave, absences, certificates and employment termination as legal employer, based on the customer’s written termination request and applicable statutory or collective agreement notice requirements

Read the right-hand column twice: occupational safety liability does not transfer to the EOR.

The Occupational Safety and Health Act (738/2002), section 3, applies specifically to leased labour and places the orientation duty on the company receiving the labour: it “shall especially take care of orienting the employees into the work and the working conditions of the workplace.”

Finland’s Occupational Safety and Health Administration says it plainly: the user company must ensure the work is safe and healthy, and must tell the agency about the hazards involved.

EOR Finland: how it works in practice

1. Scope. You describe the roles, locations, salary levels and start dates. We identify the applicable collective agreement and confirm the total employment cost, statutory contributions included.
2. Contracts. We sign a Finnish employment contract with your employee and a service agreement with you. Before signing a conditional employment contract, we verify that the employee is expected to meet the requirements for obtaining the right to work in Finland; for non-EU nationals, the permit route is mapped first.
3. Onboarding. Payroll, tax card, pension and insurance registrations, occupational health care and Incomes Register reporting are set up.
4. Run and review. We run monthly payroll and statutory reporting; you run the work. When you open your own entity, the employment can be transferred or the employee can be hired by your entity under the agreed try & hire terms.

What about commercial terms? Commercial terms may also apply, including a security deposit, agreed payment terms and separately invoiced pass-through or additional costs. Recruitment is not included in an EOR agreement unless separately agreed – so if you have not found your person yet, we can do that too, as a separate service.

What an EOR does not solve

An honest EOR conversation includes the limits. There are three – and a fourth that lands on your side of the table. We say the same openly on our own service page: EOR does not replace corporate registrations, licences or a permanent establishment analysis.

1. Permanent establishment

In short: an EOR changes who the formal employer is. It does not by itself answer whether you owe Finnish corporate tax.

Whether your company becomes liable for Finnish corporate tax turns on the Tax Administration’s permanent establishment criteria: a distinct geographical place of business, a degree of permanence, and business actually carried on there.

Notably, the Tax Administration states that the personnel involved “do not necessarily have to be employees” of the company – “it is sufficient if they are under its authority” – and that a permanent establishment “may be located at an employee’s home office.”

That needs a tax assessment. Any permanent establishment assessment remains the customer’s responsibility, and the customer should ensure that its activities do not create tax or legal obligations for the EOR provider.

2. Company and branch registration

In short: if you need a branch, it must be registered before it starts operating.

A branch of a foreign business must be filed with the Finnish Patent and Registration Office (PRH) before it commences operations, and a trader from outside the EEA additionally needs a PRH permit to establish one. (Since 1 January 2026, PRH no longer accepts paper filings.)

3. Sector licences

In short: licences follow the business activity, not the employment.

If your activity in Finland needs a permit, an EOR hiring the staff does not confer it.

4. Your own due diligence duty

In short: as the company using leased labour, you must check your partner – and keep the reports.

Under the Act on the Contractor’s Obligations and Liability (1233/2006), a company using leased labour must obtain and retain specified reports on its partner for two years after the work ends:

• tax and register status
• pension insurance
• the applicable collective agreement
• occupational health care
• accident insurance.

The checks are not required where a contract is worth less than €9,000 excluding VAT, or where agency work lasts a maximum of ten working days. An EOR does not remove this duty; a good one makes it easy to satisfy.

EOR, your own entity, or contractors?

	EOR	Own Finnish entity	Independent contractors
Time to first hire	Weeks	Months	Days
Fixed cost	Service fee per employee	Entity, accounting, HR, payroll	Invoice only
Compliance risk carried by	The EOR, as legal employer	You	You – misclassification
Right to direct daily work	Yes	Yes	Limited by definition
Best for	Testing a market, 1–30 people, speed	Committed long-term presence	Genuinely independent project work

Can an EOR hire non-EU nationals in Finland?

Yes – and this is one of the strongest practical arguments for a local partner.

Who needs a permit. Citizens of the Nordic countries, EU member states, Liechtenstein and Switzerland need no residence permit to work in Finland. Everyone else generally needs a residence permit for an employed person or another permit allowing paid employment.

How long it takes. At the time of writing, the Finnish Immigration Service decides most first permits for an employed person in about a month, and most specialist permits in about two weeks. Processing times change, so check the current processing times on migri.fi.

What the employer must do. The employer must:

• verify the employee’s right to work in accordance with section 82 of the Finnish Aliens Act before concluding the employment contract or, at the latest, before the employee starts to work
• keep the documentation for two years after the employment ends
• notify the Immigration Service within seven days of the start of employment
• inform the employee representatives of the person’s name and applicable collective agreement.

Neglecting this is not a paperwork slip: the financial sanction for employing a person residing in the country illegally runs from €1,250 to €37,530.

How to choose an EOR partner in Finland

Four questions that separate a local employer of record Finland operator from a reseller – and how we answer them.

• Which collective agreement will you apply to this role, and why? A specific answer naming the agreement is the best single signal of competence. Our answer: we name it before you commit, and it is confirmed in the order confirmation.
• Who is our named contact in Finland, and what can they decide and sign as the employer? Representation duties are real; so is an employee needing someone to call. Our answer: [Barona to confirm – e.g. a named Finnish contact for you, and day-to-day HR support for your employee.]
• Do you also handle permits, relocation and settling in? For non-EU hires, one partner beats four. Our answer: yes – Barona Global covers permits, immigration, relocation and settling in, within an EOR package or separately.
• What happens when we set up our own entity? A partner with a clean exit plan is not betting on your inertia. Our answer: the employment can be transferred, or your entity can hire the employee under the agreed try & hire terms.

Frequently asked questions

Or read on: Finnish employment law and [LINK MISSING: payroll in Finland].

Sources

• Employment Contracts Act 55/2001, ch. 1 s. 7(3) and ch. 2 s. 9 – Finlex, official English translation
• Occupational Safety and Health Act 738/2002, s. 3 and s. 14
• Occupational Safety and Health Administration, Temporary agency work and Collective agreement – tyosuojelu.fi/en
• Act on the Contractor’s Obligations and Liability 1233/2006; Occupational Safety and Health Administration guidance on contractor’s obligations
• Ministry of Economic Affairs and Employment, press release 28 Feb 2024, Tutkimus: työehtosopimusten piiriin kuuluu yhä valtaosa palkansaajista (Ahtiainen, collective agreement coverage 2021/2022)
• Finnish Tax Administration, Income taxation of nonresident foreign corporate entities (VH/5613/00.01.00/2022, 20 Nov 2023) and Income tax – foreign business in Finland – vero.fi/en
• Finnish Patent and Registration Office, Establishing a branch – prh.fi/en
• Finnish Immigration Service, Working in Finland, Role and obligations of employers, Processing times, If an employer neglects their obligations – migri.fi/en

Finnish Tax Administration detailed guidance in English is an unofficial translation; the Finnish and Swedish versions are authoritative.