Finland is a country ripe for foreign investments as all the forward-looking industries are on a growth trajectory. From the bioeconomy to ICT to R&D, there are opportunities in all directions.
By William Bell

There are many reasons international companies and entrepreneurs are attracted to Finland, but topping the list is a healthy supply of opportunities in high-tech and growth industries. These are industries that will shape the future of the world from the quality of life to the way people work.

It is like a who’s-who of cutting-edge industries that include information and communication technology (ICT), renewable energy, pharmaceuticals, health care, biomedical, and cleantech. More traditional industries like forest and mining are also thriving.

Sweetening the deal is the fact foreign companies get the same benefits and access to technology as Finnish firms.

Location, Location, Location
Finland’s advantages begin with its location. Flights to major cities like Brussels, Copenhagen, Frankfurt, Berlin, London and St. Petersburg are under two or three hours. In less than 10 hours, business people can reach Seoul, Tokyo, Bangkok, Delhi, Beijing and New York.

However, the attractiveness of Finland actually extends across numerous factors when compared to other countries. It is first in innovation, second in availability of skilled labor, second in having the best educational system, the third least corrupted country in the world, fourth in talent (out of 60 countries), and fourth most competitive economy (out of 144 countries).

Most of the country’s largest cities are clustered in the southern most region giving access to the majority of Finland’s population. Helsinki is the largest with a population over 613,000. Nearby are Espoo, Vantaa, Turku and Tampere.

Entrepreneurialism is the foundation of Finland’s successful economy and high level of competitiveness. The government carefully develops policies that promote innovation; adoption of new technologies; and the continued transformation into a knowledge economy with a focus on technology, science and business.

The countries getting the lion’s share of exports are, in ranked order, Germany, Sweden, Russia, the United States and the Netherlands. Top exports are diesel fuel, paper and paperboard, stainless steel, sawn goods, pulp, cars, electricity transformers, medical instruments, and medications. The top export industries are technology, chemical, forestry, food, primary production, textile and clothing, power and water supply, and mining and quarrying.

Entrepreneurial Welcome Mat is Out
Foreign direct investments (FDI) are actively encouraged, and the government backs up its commitment to foster business growth. There is enormous room for expansion in different areas that include life sciences, wireless and mobile, biomass-powered energy, power bioenergy, and fuel-related sectors. Business services outsourcing is another rapidly growing industry.

The proof of Finland’s attractiveness to U.S. companies is especially evident in health technology. GE Healthcare developed the Health Innovation Village in Vallila, a couple of miles from Helsinki. The hub offers innovative entrepreneurs the infrastructure for business startup and space for sharing ideas for software development, wireless technology, sensors and Web applications. The Village setup encourages collaboration in order to spur new products and services. Samsung Electronics partnered with Vertical Health Accelerator to generate innovative startups, with its first accelerator located in Otaniemi, home of Aalto University.

Innovation is heavily reliant on businesses, creating a solid framework for new FDI. More than 40 percent of all R&D is conducted by companies in the Helsinki region. There is a strong higher education system, with the University of Helsinki being the largest, that partners with businesses in R&D.

Tekes is the Finnish Funding Agency for Technology and Innovation, which started the Innovative Cities program in 2014 which continues until 2020. The program generates new startups and encourages the pooling of resources from education, science, businesses and the government to develop new technologies, services and operating models. Entrepreneurs are working in areas that include cybersecurity, bioeconomy, smart cities, and sustainable energy and water supplies.

Technology is Finland’s top export industry and by far the greatest focus of R&D, covering areas like information technology, mechanical engineering, metal industry, electro-technical and electronics. The second largest sector is chemical manufacturing which produces products like paints, pharmaceuticals, petrochemicals and plastics.

Cleantech and renewable energy make up one of the fastest growing industries in the country. They include energy-efficiency products, biomass, recycling technology, alternative energy solutions and clean industrial processes.

Foreign investors will also find many opportunities in the ICT industry, including mobile, nanotechnology, game developing, digibusiness, biotechnology and healthcare. Technology policies are managed by Finland’s Ministry of Employment and the Economy (MEE).

Venture Capital for Success Business
To encourage business innovation, Finland has one of the lowest corporate tax rates in the EU at 20 percent.

There are numerous investment incentives, also managed by the MEE. Finland owns Finnvera plc which is a specialist financing company, and Finnish Industry Investment Ltd. MEE also controls the regional Centres for Economic Development, Transport and the Environment (ELY Centres) which offer grants to qualified organizations. Venture capital as loans, grants, and guarantees are also available from Tekes and Sitra.

Setting up a business in Finland is a streamlined process. Most foreign businesses are set up as limited liability companies or as Finnish branch offices. General or limited partnerships are also allowed. One of the business founders must be a permanent resident or legally living in the European Economic Area, but an exemption may be granted by the National Board of Patents and Registration. There are no restrictions on foreign ownership of businesses in Finland, so FDI can also take the form of an acquisition.

For U.S. companies, Finland offers a culture with many of the same characteristics, making it easier to do business. They follow schedules and appreciate punctuality, respect authority, and prefer to negotiate solutions. Finns believe in being honest and frank, and expect people to keep their word. Conducting successful business transactions does not rely on developing long-term relationships.

The Finnish are progressive in corporate social responsibility, propelled by a desire to maintain a beautiful natural environment and to ensure people live with dignity. There is an emphasis on adopting strategies to address climate change, environmental sustainability, employment practices and ethical consumption.

Organizations looking for a stable country with a solid infrastructure should consider Finland. The high quality of life, stunning landscapes, convenient location, and thriving economy make the country one of the most attractive places in the world for investing.

North American businesses ready to go global should first look east across the Atlantic.

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