Record number of business closures in Finland
A record-breaking 43,935 businesses ceased operations in Finland in 2024, according to Statistics Finland. The number of single-person businesses shutting down saw a particularly sharp increase, with figures from the final quarter of the year marking the highest in the history of the statistics.
In the fourth quarter alone, 16,188 businesses closed their doors – almost double the number compared to the same period the previous year. Statistics Finland highlights that the surge was most prominent in the category of sole proprietors, where closures jumped from 4,654 to 11,310.
The fourth-quarter numbers were the highest ever recorded in the statistics on business openings and closures, which date back to 1995. As a result, the total number of business closures for the entire year reached a historic high in both absolute terms and within the sole proprietorship category: 43,935 closures, significantly more than the previous record of 30,837 in 2023.
“One possible reason for the increase in closures is the upcoming change to the EU’s Small and medium-sized enterprises (SME) directive, which from the beginning of 2025 will end the Value Added Tax (VAT) relief currently available to small businesses,” said Mira Kuussaari, Senior Statistician at Statistics Finland.
The relief on VAT applies to concerned registered businesses whose annual turnover is below €30,000.
“However, based on the statistical data alone, it’s not possible to determine exactly how much of the increase is due to the legislative change and how much is linked to other factors affecting business activity,” Kuussaari noted.
The data on business closures is derived from the Finnish Tax Administration's register information.
Kuussaari also pointed out that the number of one-person enterprises has been rising in bankruptcy statistics since early 2021, although this trend is unrelated to the legislative changes.
In the fourth quarter of 2024, 9,016 new businesses were established, a decrease of 4.3% from the previous year. However, the total number of new businesses for the full year showed a year-on-year increase.
