Finland - Country Commercial Guide
Investment Climate Statement

The Investment Climate Statement Chapter of the CCG is provided by the State Department. Any questions on the ICS can be directed to EB-ICS-DL@state.gov.

Last published date: 2021-09-15

The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.

Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

These statements highlight persistent barriers to further U.S. investment.  Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.  To access the ICS, visit the U.S. Department of State’s Investment Climate Statement website.

Executive Summary

Finland is a Nordic country located north of the Baltic States bordering Russia, Sweden, and Norway, possessing a stable and modern economy, including a world-class investment climate. It is a member of the European Union and part of the euro area. The country has a highly skilled, educated, and multilingual labor force, with strong expertise in Information Communications Technology (ICT), shipbuilding, forestry, and renewable energy. Finland offers stability, functionality, high quality of living, and a highly developed digital infrastructure.

Key challenges for foreign investors include high personal and VAT tax rates, a rigid labor market and bureaucratic red tape in starting certain businesses and opening bank accounts, although in June 2016 the Government enacted a Competitiveness Pact that aims to reduce labor costs, increase hours worked, and introduce more flexibility into the wage bargaining system. An aging population and the shrinking working-age population are the most pressing issues that could limit growth opportunities for Finland.

During 2019, the total value of FDI grew by USD 15.1 billion to USD 85.5 billion, of which equity accounted for USD 69.63 billion and the value of debt capital for USD 15.9 billion. Sweden accounts for 28 percent of Finland’s FDI; Luxembourg – 15 percent; the Netherlands – 15 percent; Norway – 6 percent; and Denmark 5 percent. Approximately 82 percent of Finland’s FDI is from EU member states.

According to Ernst & Young’s Nordics Attractiveness Survey 2019, Finland secured a record high of 194 FDI projects; more projects than all the other Nordic countries combined in 2018. The 2019 survey was Finland’s seventh consecutive as the Nordic leader in new FDI projects – the largest category being Sweden-based businesses (53), followed by UK-based – 19; the United States – 18; Germany – 15; Norway – 13; and China – 13.

To attract investment over the years, the Government of Finland (GOF) cut the corporate tax rate in 2014 from 24.5 percent to 20 percent, simplified its residence permit procedures for foreign specialists, and created a one-stop-shop for foreign investors called Business Finland.

The U.S. Embassy in Helsinki, through the Foreign Commercial Service and Political/Economic Sections, is a strong partner for U.S. businesses that wish to connect to the Finnish market. Finland has vibrant telecommunication, energy, and biotech sectors, as well as Arctic expertise. With excellent transportation links to the Nordic-Baltic region and Russia, Finland is a developing transportation hub.

On January 1, 2018, Finpro, the Finnish trade promotion organization, and Tekes, the Finnish Funding Agency for Innovation, united to become Business Finland, which is now the single operator working to facilitate foreign direct investment in Finland. Business Finland is the Finnish government organization for innovation funding and trade, travel, and investment promotion. Business Finland’s 600 experts work in 40 offices abroad and in 16 offices in Finland.