Finland - Country Commercial Guide
Investment Climate Statement
Last published date:

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.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

Finland is a Nordic country situated north of the Baltic States, bordering Russia, Sweden, and Norway, with excellent transportation links to the Nordic-Baltic region. Finland is a member of the European Union and part of the Euro area. As a modern, stable economy, it offers a world-class investment climate and well-developed digital infrastructure with stability, functionality, and a high standard of living.

Finland joined NATO in April 2023. The alliance membership should bring economic benefits to Finland by increasing regional security and stability. Investments in the defense industry will create jobs and stimulate economic growth. The United States has become Finland’s largest trading partner, outpacing Sweden as the traditional number one.

Finland was ranked 8th in the IMD World Competitiveness Ranking in 2022. The country has a highly skilled, educated, and multilingual labor force with solid expertise in Information Communications Technology (ICT) and emerging technologies, including microelectronics, quantum and supercomputing, shipbuilding, forestry, and renewable energy.

Major challenges for foreign investors include high tax rates, a rigid labor market, cumbersome bureaucracy, and the lengthy and unwieldy process of opening bank accounts. An aging population and a shrinking workforce are the most pressing demographic concerns for economic growth. According to Foreign Direct Investment (FDI) Barometer 2023, over three-quarters of businesses report experiencing a talent shortage while large foreign-owned companies are affected. U.S. companies currently employ 21,412 people in Finland, an increase of around 3% over last year.

To attract investment, the Government of Finland (GOF) cut the corporate tax rate in 2014 to 20 percent (the lowest rate in the Nordics) and simplified its residency permit procedures. Inward FDI to Finland grew by €2.5 billion during 2021 and was €76.2 billion at the end of the year. The United States is the second-largest foreign direct investment (FDI) source in Finland, after Sweden.

Finland was ranked first in the UN’s Sustainable Development Report, which compares 193 UN member states based on 17 sustainability goals. The country has set ambitious goals to reach carbon neutrality by 2035, increasing the interest of companies with equally high sustainability goals looking for opportunities to invest.

Olkiluoto 3 (OL3) nuclear reactor began regular electricity output in April 2023, accelerating the move towards a carbon-neutral society. Production has reduced electricity imports by about 60 %. A new liquefied natural gas (LNG) terminal was established in Finland, allowing future imports of non-Russia sourced natural gas.

Gross domestic product (GDP) is expected to contract by 0.2 percent, but the economy will return to growth at the end of 2023. Energy consumer prices started to rise in the aftermath of the COVID-19 pandemic and continued during 2022 due to the energy crisis prompted by the Russian invasion of Ukraine.

The Foreign Commercial Service and Political/Economic Section at the U.S. Embassy in Finland are valuable resources for American businesses wishing to engage the Finnish market. Business Finland is a government organization operating as a one-stop-shop for foreign investors and facilitating innovation funding, foreign direct investment, and trade promotion.

 Investment Climate Statements - United States Department of State