Purchases from
group or associated companies

Instruction for purchases from Group and associated companies

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What is interest buying?

Interest buying means that when making purchases, pay special attention to situations where there is an interest relationship between the beneficiary and the company from which the services are purchased. When planning a project and preparing a cost estimate, check whether the project may include purchased services from group or interest companies. Project reporting is also different if there are interest purchases in the project. See the instructions on this page and read more in the funding terms and conditions.

Does the interest purchase apply to your project?

Business Finland's definition for an associated company

A related party refers to a situation in which another company or a person affiliated with that company can influence the beneficiary's procurement decisions. Companies are associated companies of each other, for example, when one of the following interests exists between them:
  • Interest based on control
    • One company can exercise control over another company, or
    • The same individual can exercise control over both companies 
  • Interest based on ownership
    • At least 20% of the entire share capital or equivalent equity of another company is directly or indirectly owned or controlled by the other company, or 
    • Companies whose share capital or equivalent equity is directly or indirectly owned or controlled by the same individual
  • Interest based on the position or function of an individual
    • The same individual acts in both companies in any of the following roles:
      • member/deputy member of the board
      • person responsible for the company or holder of the right of representation or power of attorney 
      • employee of the company 
      • financier or guarantor of the company
  • Interest based on family membership
    • The individual acts in the company in any of the roles mentioned in section 3 and his/her family member or close relative also acts in any of the above-mentioned roles in another company. A family member refers to a spouse or common-law partner living in the same household, one's own child and one's spouse's child. A close relative is considered to include a grandchild, sibling, parent, grandparent and similar relatives on the spouse's side. 

Business Finland inspects the shareholders, holdings, shareholders of associations, responsible persons and employees of the beneficiary. In addition, connections with other companies will be checked.

During project monitoring or auditing, data from parallel and previous projects and possibly information from funding granted by other authorities are also checked.

Examples of affiliation of interests
  1. An employee of Company A owns 100% of Company B, but does not have a holding in Company A. Acquisitions from Company B are acquisitions of interests. A connection of interests is formed through an employment relationship.
  2. The shareholder of company A owns 20% of company B and 30% of company C. Acquisitions from companies B and C are interest-related acquisitions. The connection of interests is formed through the holdings of a shareholder in company A.
  3. A deputy member of the Board of Directors of Company A owns 100% of Company B, but does not have a holding in Company A. Acquisitions from Company B are acquisitions of interests. The connection of interests is formed through acting as a person in charge.
  4. A member of the Board of Directors of Company A owns 20% of Company B and 30% of Company C. Acquisitions from companies B and C are interest-related acquisitions. The connection of interests is formed through the holdings of a member of the Board of Directors of Company A.

Which costs are accepted as interest purchases?

Eligible costs as group and interest purchases

When planning a project, consider the following when preparing a cost estimate:
  • The cost estimate has a separate line for purchases from within the group and from the associated company.
  • The cost estimate accepts the uncovered value of the outsourced service.
  • If the relationship of interest has not been taken into account in the cost estimate, the customer must submit an application for a change to the cost estimate.

The following may be accepted as interest purchases:

  • Direct costs of the project
  • Indirect personnel costs; 50% of the monetary salaries allocated to the project
  • Overhead 
    • less than 10 people
      • 10% if the company's overhead costs are low (e.g. the company does not have premises)
      • 20% if the company has premises for which it pays a fair price and its accounting has been outsourced
    • 10–19 people: 20%
    • 20–49 people: 30%
    • 50 people or more: 50%
  • Business Finland can also accept purchases from foreign group and associated companies
    • Only the direct costs of the project
    • Indirect and overhead costs are not accepted
    • Foreign currency invoices use the exchange rate on the invoice payment date
    • An independent auditor's standard audit report must also be submitted for these costs in Finnish, Swedish or English.
Interest purchases in de minimis financing

Services purchased from within the same group in the Tempo, Talent and Accelerators and Preparations for International Projects projects are accepted as invoiced.

Services purchased from foreign group companies must be mentioned in the special condition of the financing decision. Services purchased from other associated companies are not acceptable costs.

As a rule, outsourced services from group or other associated companies are not accepted in the Market Explorer and Exhibition Explorer projects.

Outsourced services can be approved in accordance with the project plan and invoicing. Outsourced services are described in the report. There is no need to make a separate account. Nor is it necessary to submit an auditor's audit report on these purchased services.

Terms and conditions for de minimis financing of companies

How are interest purchases accounted for?

Group and associated companies must also comply with the terms and conditions of financing. The recipient of the funding must ensure that the group and associated company arranges project accounting and working time monitoring as described in the terms and conditions.

Business Finland accepts an outsourced service from a group and associated company without a margin of funds. In order to establish that there is no coverage, the group and associated company must report its own costs incurred from the project to Business Finland on separate forms (Y4 salary specification and Y3+Y5_intressi Group/associated company cost reporting). 

In connection with the final report, a separate, standardised audit report by an independent auditor must be submitted on the costs accounted for by the Group and associated company.

If there are several group or associated companies, each company submits its own cost statement with audit reports. Each company's accounts are packaged in one PDF file. 

 with audit reports. Each company's accounts are packaged in one PDF file.