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. 

To access the ICS, visit the U.S. Department of State’s Investment Climate Statement website. 

Executive Summary 

Finland is a Nordic country situated 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), emerging technologies, shipbuilding, forestry, and renewable energy. Finland offers stability, functionality, high standard of living, and a well-developed digital infrastructure. 

Key challenges for foreign investors include high tax rates, a rigid labor market, cumbersome bureaucracy, and lengthy and unwieldly process in opening bank accounts. An aging population and the shrinking work force are the most pressing demographic concerns for economic growth. 

Finland is top-ranked in COVID Recovery Index Table (CERI), reflecting its good governance and resilient health care sector. Finland’s vulnerabilities are its dependence on exports and an aging population. 

Finland is committed to the EU’s greenhouse emissions reduction target under the UNFCCC and the Paris Agreement and is aiming to become the world’s first carbon-neutral society by 2035. 

Foreign direct investment (FDI) in Finland by country is as follows: Sweden, 27 percent; the Netherlands 17 percent; Luxembourg 15 percent; Norway 7 percent; and China 5 percent. 

Despite its openness to trade and investment, Finland lags behind the other Nordic and Baltic countries as a destination for foreign investment. In 2019, FDI accounted for 31 percent of Finland’s GDP – less than in 2010 and well below the 49 percent regional average. 

To attract investment, the Government of Finland (GOF) cut the corporate tax rate in 2014 from 24.5 percent to 20 percent (the lowest rate in the Nordics), simplified its residency permit procedures, and established Business Finland as a one-stop-shop for foreign investors. 

The Foreign Commercial Service and Political/Economic Section at U.S. Embassy in Finland are a valuable resource for American businesses wishing to engage the Finnish market. Finland has vibrant telecommunication, energy, emerging markets, and biotech sectors, as well as Arctic expertise. With excellent transportation links to the Nordic-Baltic region, Finland is emerging as a regional transportation hub. 

On January 1, 2018, Finpro, the Finnish trade promotion organization, and Tekes, the Finnish Funding Agency for Innovation, merged to become Business Finland, which facilitates foreign direct investment in Finland and trade promotion. Business Finland employs 600 experts in 40 offices abroad and 16 offices in Finland.