Learn Finnish: Kansalaisuus perustuu siihen, että asut täällä.

The verb perustua (to be based on) requires its target to be in the illative case. Because you cannot attach a case ending to an entire että clause, Finnish uses the pronoun se as a bridge. It puts se into the illative case (siihen) to satisfy the verb's requirement, and then follows it with the että clause.

The English translation says "you living here". Why does Finnish use the conjugated verb asut instead of an "-ing" equivalent?

English often uses gerunds (the -ing form) after prepositions, like "based on living". Finnish typically avoids this structure and instead uses an että (that) clause with a normal conjugated verb. A literal translation is "Citizenship is based on it, that you live here."

Why is there a comma between siihen and että?

In Finnish, subordinate clauses starting with että must always be separated from the main clause by a comma. The pronoun bridge siihen completes the main clause, so the comma goes immediately after it, right before the subordinate clause begins.

Could I use tässä instead of täällä for "here"?