Finland and Helsinki Fact Book · Information & Communication Technology (ICT), Cleantech, Renewable Energy, Health Care and the Pharmaceutical, Bio and Medical Industries, as well

Finland

and Helsinki

Fact Book

2009

A guide to doing

cost-eff ective business

in Finland

Investment Guide Book2 Investment Guide Book 3

Welcome to Finland

DEAR READER

Finland is an economically and politically stable society and has been a

member of the European Union since 1995. The Finnish economy is know-

ledge-based and strong on innovation. The longstanding national invest-

ments in innovation and a forward-looking technology policy have produced

world class expertise in many sectors of the Finnish economy. For many

years Finland has also been among the top countries globally in terms of

R&D spending per capita.

Finland has several high-tech clusters with many technology companies

that have cutting-edge expertise. Finland’s particular strengths include

Information & Communication Technology (ICT), Cleantech, Renewable

Energy, Health Care and the Pharmaceutical, Bio and Medical Industries,

as well as the Mining, Forest and Chemical Industries. Thanks to the

close cooperation between business and the institutes of higher learning,

companies can benefi t directly from the academic excellence of the Finnish

universities.

The Ministry of Commerce of the People’s Republic of China and the Ministry

of Employment and the Economy of Finland have signed a Memorandum of

Understanding on bilateral investment promotion. The aim of this MoU is

to encourage bilateral investments and it forms a solid base for new invest-

ments between our two countries.

Finland welcomes Chinese companies and entrepreneurs to explore the

various business opportunities and excellent infrastructure that our country

can off er. All companies registered in Finland enjoy the same benefi ts,

grants and access to the national technology programs, irrespective of the

nationality of the company’s ownership.

My Ministry and our national investment promotion agency Invest in

Finland are pleased to give you further information and assistance for the

successful establishment of your business in Finland.

Mauri Pekkarinen

Minister of Economic Aff airs

the Ministry of Employment and the Economy

DEAR READER

Invest in Finland is the national investment promotion organisation

committed to encouraging FDI and making business grow. We assist foreign

companies in their direct investments and build international co-operation

on a win-win basis in order to create added value to the national economy

and to the industrial, service and logistical structure of the country.

We off er our clients an in-depth analysis and consulting on all the diff erent

investment alternatives; greenfi eld investments, an acquisition of an existing

Finnish company, joint ventures or R&D Co-operation.

The services are tailored to the specifi c needs of the client and cover every

stage of setting up business in Finland, from initial data collection and

opportunity analysis to the actual business launch. The client company

is also shown how it can access the investment incentives off ered by the

Finnish government and regional bodies, and how to benefi t from the

world-leading research collaboration between Finnish universities and the

private sector.

With this investment guide Invest in Finland invites you to explore Finland’s

excellent business opportunities. We are more than happy to give you further

information about these and other projects and opportunities in Finland.

Tuomo Airaksinen

CEO

Invest in Finland


Contents Why Finland?

How can a nation of fi ve million consistently top numerous international

surveys? In Finland, you have a dynamic business environment where

everything works. Thanks to its early adoption of information technology,

unique co-operation between education, research and industry, as well as a

skilled workforce receptive to new technologies, Finland is an ideal test bed

for new solutions and technologies. Couple this with a sophisticated infra-

structure, highly competitive operating costs and strategic location in

Northern Europe, and you have a market that off ers great opportunities for

success and solid growth.

Non-existent corruption, and minimal red tape are additional reasons

for establishing a business in Finland. It is our experience that foreign

companies locate in Finland for the long-term and enjoy high return on

investment. Today, foreign-owned companies account for more than 20%

of corporate turnover in Finland, and their number is constantly growing.

AN INCENTIVE DESTINATION FOR BUSINESS TRAVEL

You will, of course, fi nd the best hotels, fi ne dining, international events

and venues, and modern meeting and convention facilities across the scale.

That is to be expected of an area that especially welcomes business visitors.

What you will not fi nd elsewhere is the unique combination of adventure

and soothing silence, in one of the purest natural settings in the world.

Winter or summer, there are plenty of new and stimulating experiences to

be gained. We like to think of them as making business a pleasure.

• One of the most competitive

economies in the world, WEF Global

Competitiveness Report 2007

• The least corrupt country in the

world, Transparency International

• Ranked best in the Environmental

Sustainability Index, WEF

• Europe’s top educational system,

IMD World Competitiveness

Yearbook 2006

• Ranked best in knowledge transfer

between universities and companies,

IMD 2006

• Top in the OECD’s PISA study of

learning skills among 15-year-olds

• Number three globally in R&D

spending per capita

• The only Eurozone country in

Northern Europe

• Strategic geographic position in

the expanding markets of Northern

Europe

New York

Stockholm

London

Copenhagen

Brussels

Paris Frankfurt

Berlin

St. Petersburg

Moscow

Mumbai

Bangkok

Hong Kong

Beijing

Seoul

Tokyo

Helsinki

Shanghai

Bangkok 9 h 45 min

Beijing 7 h 40 min

Berlin 2 h

Brussels 2 h 40 min

Copenhagen 1 h 40 min

Frankfurt 2 h 40 min

Hong Kong 9 h 50 min

London 3 h 10 min

Moscow 1 h 45 min

Mumbai 7 h 25 min

New York 8 h 40 min

Paris 3 h 05 min

Seoul 8 h 30 min

Shanghai 8 h 55 min

St. Petersburg 1 h 05 min

Stockholm 55 min

Tokyo 9 h 25 min

2 Welcome to Finland

5 Why Finland?

6 The Finland Experience

10 Business Outlook

13 Research, Development & Innovation

15 Principal Industrial and Business Sectors

22 Business Environment

26 Investment Incentives

28 Setting up a Business in Finland

31 Employment and the labour market

34 Visas, work and residence permits

36 Legal Framework – Corporate Law

37 Taxation

40 Baltic Sea Region

42 Helsinki

44 Welcome to Helsinki

45 Greater Helsinki

47 Helsinki Ecosystems

51 Helsinki infrastructure

53 Costs

55 Helsinki workforce

58 Quality of life

61 Helpful Organizations


The Finland Experience

Finland is a stable society with an advanced industrial economy and

a world leading business environment that is highly conducive to foreign

investment. Since joining the European Union in 1995, Finland has enjoyed

a period of sustained growth and political stability that has made the

country one of the most open, competitive and successful economies in

Europe. In 2008, Finland scored well the Global Competitiveness Report

2008 by the World Economic Forum as one of the fastest growing countries

in the EU and with the highest government surplus. In 2009 Economist

Intelligence Unit ranked Finland’s business environment as the best in

the world for the period 2009-2013.

Facts about FinlandTotal area 338,000 square kilometers

Land area 69 % of which is covered by forest, 10 % by water and 6 % by agricultural land

Neighboring countries Estonia, Sweden, Norway, Russia (1,269 km, Finland’s land border with Russia is the eastern border of the European Union)

Natural resources Forests, copper, iron ore

Distances 1,160 km from north to south, 540 km from west to east

Time +2 hours GMT

Population 5.305 million; 67 % live in towns or urban areas, 33 % in rural areas

Population density 17 inhabitants per square kilometer

Life expectancy at birth females 82.8 years, males 75.8 years

Main towns Helsinki (564,520) Espoo (235,020), Tampere (206,370), Vantaa (189,710), Turku (175,355) and Oulu (130,180)

Languages Finnish 91.51%, Swedish 5.49%, Lappish 0.03%, Russian 0.80%, other 2.17%. Finnish and Swedish are the offi cial languages.

Religion Lutheran 82.5%, Orthodox 1.1%, other 1.1% (15.1% have no religious affi liation)

As the home of Nokia, the global leader in mobile communications, Finland

has established a reputation for innovative high-tech industries. The coun-

try’s infrastructure is well developed and its workforce highly educated and

skilled. According to the World Economic Forum (WEF), Finland has the best

availability of scientists and engineers in the world, and the best educa-

tional system in the world. Finland also welcomes foreign workers because

there are several sectors where the country is facing labour shortages due to

its ageing population.

THE FINNISH ECONOMY

Main economic indicators, Finland2005 2006 2007 2008* 2009* 2010*

GDP (change, %) 2.8 4.9 4.5 2.1 -0.5 0.7

Industrial production (change, %) 3.9 9.1 5.2 3.9 3.1

Imports of goods and services (change, %) 9.6 7.8 6.6 0.4 -2.1 2.6

Exports of goods and services (change, %) 6.1 11.8 8.2 3.9 -3.3 1.0

Private consumption (change, %) 3.8 4.1 3.2 3.1 0.7 1.9

General government consumption (change, %) 1.9 0.6 1.3 1.3 1.9 1.6

Current account (% of GDP) 4.9 4.6 4.1 3.8 2.5 0.7

Consumer prices, average (change, %), EU harmonized 0.9 1.6 2.5 4.1 1.8 1.7

Unemployment rate (%) 8.4 7.7 6.9 6.3 7.2 7.7

Sources: Statistics Finland, Ministry of Finance, Bank of Finland 12/2008* Forecast

Finland has become the base for a number of international companies taking

advantage of a highly educated workforce steeped in the traditional Finnish

work ethic. Although the high-tech sector is the best known globally, Fin-

land has also managed to thrive with traditional industries such as forestry

or metals. It is also investing heavily in new industries such as bio-fuels.

Gross domestic product at basic pricesIndustry Proportion of the GDP, %

Primary production 3,0

Secondary production 31,6

Services 65,4

Source: Statistics Finland

186

100

120

140

160

180

200

2004 2005 2006* 2007* 2008*

152

Sources: Statistics Finland 2009* Forecast

Gross Domestic product,Finland

GDP (at current prices, € billion)

GDP per capita Finland

GDP per capita (at current prices, €)

35,041

25,000

27,000

29,000

31,000

33,000

35,000

37,000

2004 2005 2006* 2007* 2008*

29,107

Sources: Statistics Finland 2009* Forecast

GDP per capita in Finland, Sweden, Denmark, Estonia

GDP per capita (at current prices, €)

40,200

9,700

35,041 34,500

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2002 2003 2004 2005 2006 2007* 2008*

Sources: Statistics Finland 2009, Eurostat* Forecast

Denmark

Estonia

Finland

Sweden


POPULATION AND WORKFORCE

The population of Finland is 5.3 million. The population is in a growing

trend. In 2008, 59,530 babies were born – 800 more than the year before.

The total workforce in Finland is 2.7 million of which 49% are men and 51%

women.

English is the common business language among Finland’s highly inter-

national business community and also the most popular foreign language

in the country. About 90% of Finns under thirty speak English. There is

instruction available in the major European languages in the main cities for

expatriate families who wish to continue their children’s education in their

own language.

THE BUSINESS HUB OF NORTHERN EUROPE

Finland shares borders with Russia, Sweden and Norway, as well as Esto-

nia across the Gulf of Finland. The long border with Russia is also the

eastern border of the European Union. With long-established connections

and experience of doing business with Russia, the Nordic and the Baltic

countries.

A STABLE POLITICAL SYSTEM BOOSTS THE ECONOMY

Finland is a republic and became independent in 1917. The current head

of state is President Mrs Tarja Halonen, who was elected in 2000 and re-

elected in 2006. The single chamber parliament has 200 members and is

elected for a four-year term by direct popular vote under a system of propor-

tional representation. Currently the largest parties are the Centre Party,

the National Coalition Party, the Social Democratic Party, the Left Alliance

and the Green League. Finland’s multi-party democracy is characterized by

consensus and pragmatic policies implemented by coalition governments.

Finland is known for its active role in the international community and has

played a major role as a bridge between the East and the West. Former presi-

dent Mr Martti Ahtisaari was awarded the Nobel Peace Prize in 2008 and

Finnish soldiers participate in peacekeeping missions around the world.

GEOGRAPHY, NATURAL RESOURCES AND CLIMATE

Finland is a country of forests, lakes and islands. Areas of exceptional natu-

ral beauty include Lapland in the north, the Lakeland region in eastern

Finland and the archipelago along the southern coast. It is Europe’s larg-

est archipelago, and also includes the semi-autonomous province of Åland.

Inland, there are 187,888 lakes dotted with islands. Space and a rare tran-

quility are some of Finland’s greatest assets.

Finns like to call their forests Green Gold because they are its most impor-

tant natural resource. Other resources include peat, freshwater resources

and minerals, for example iron ore, copper, lead, zinc, chromite, nickel,

cobalt, gold, silver, phosphate, limestone, talc, quartz and uranium.

Finland’s climate has four distinct seasons. The summers are usually fairly

warm with temperatures rising above +20 degrees Celsius. In Lapland, the

sun does not set during the summer months. Finnish winters can be cold

and temperatures below -20 degrees are not uncommon. The mean tempera-

ture in Helsinki in July is +17 degrees and -5.7 degrees in February.

More information in English at Statistics Finland: www.stat.fi • Virtual Finland:

www.virtual.fi nland.fi • Research Institute of the Finnish Economy: www.etla.fi

Despite high birth rates, women are actively in work life. Thanks to public child-care services and a legal right to work shorter days, women can have a career without compromising family life.

Finland is strategically to serve a market area of 80 million consumers in Northern Europe.

Finland has consistently been ranked as one of the least corrupt countries in the world.

Finland has been ranked at the top of the WEF’s Environmental Sustain-ability Index since 2000.

16 24 years 10%

-

58%-25 49 years

31% 50 - 64 years

0,4%65-years

Sources: Statistics Finland 2009

Age distribution of the workforce

29%0-24 years

33%

25-49 years

17%65 - years

Sources: Statistics Finland 2009

Age distribution of the population

50–64years22 %


Business Outlook

STATISTICS FOR 2008/2009

According to preliminary data from Statistics Finland for 2008, the volume

of Finland’s GDP grew by 0.9% to EUR 186 billion, which is EUR 35,041 per

capita. This makes Finland’s average GDP growth rate for the past ten years

3.16%. Growth rates in 2007 and 2006 were 4.2% and 4.9% respectively.

In 2008, the volume of consumption grew by 1.9% despite the sharp downturn

in the last quarter. Investments grew by 1%. Households’ real income grew

by an average of 2.7%. The average salary in 2008 was EUR 2860. Finland’s

government enjoyed a surplus amounting to 5.3% of GDP.

According to Bank of Finland statistics for 2008, Finland’s exports totalled

EUR 81 billion, (goods EUR 66 billion and services EUR 15 billion). Exports

made up over 40% of Finland’s GDP. The major exports were electronics and

electro-technical products (24% of total or over EUR 15billion), machines,

machinery and vehicles (22%), Pulp, paper and wood products (17%), basic

metals and metal products (13%), chemicals and chemical products (7%).

In 2008 the volume of exports fell by 1.1% and the volume of imports fell by

1.3%. In February 2009, Finland’s infl ation rate was 1.7% and the unemploy-

ment rate was 7.6%.

FORECASTS AND THE IMPACT OF THE RECESSION

The global recession caused by the fi nancial crisis has halted the forward

march of the Finnish economy, characterised by growth rates above 4%, low

infl ation and interest rates, and a current account surplus.

The economic statistics for 2008 and 2009 show clear evidence of the glo-

bal recession, with Finland’s export sector being particularly hard hit. The

Bank of Finland forecast for 2009 is that Finland’s GDP will fall by 5% in

2009 and unemployment will increase towards 9%. Infl ation is expected to

be around 1% in 2009.

Despite the gloomy short-term prospects, the underlying resilience of the

Finnish economy suggests that it will be among the fi rst to recover in the

EU. As a telling measure of its macroeconomic stability, Finland enjoys the

highest possible rating with the global credit rating agencies Fitch Ratings,

Moody’s and Standard & Poor’s.

Finland’s banking sector has largely escaped the turmoil caused by the glo-

bal fi nancial crisis. Being the only eurozone country in Northern Europe,

Finland has also benefi ted from reduced uncertainty over interest rates and

exchange rates. Finland’s economy was prepared well for the global reces-

sion and its economic prospects remain signifi cantly better than for much

of the EU.

GOVERNMENT POLICY IN A KNOWLEDGE-BASED ECONOMY

The government of Finland views entrepreneurial activity as the bedrock of

Finland’s competitiveness and is committed to providing companies with

the world’s best operating environment. Finland’s economic policy aims to

improve productivity through the utilisation of new ideas, the creation and

rapid adoption of new technology, a highly skilled workforce and the intel-

ligent organisation of work. A knowledge-based competitive edge is seen

as the result of a more diversifi ed array of skills – in science, technology,

business, service solutions, design, branding or ways of organising work

and production.

One of the key long-term factors contributing to the success of the Finnish

economy has been the constructive partnership between the government,

employers and trade unions. The Finnish system has produced a level of

political stability and economic continuity undreamt of in most countries.

FOREIGN DIRECT INVESTMENT (FDI) IN FINLAND

As one of the most competitive and open economies in the world, Finland

has a great deal to off er foreign investors and also much to gain from foreign

direct investment (FDI). Statistics show that most foreign-owned compa-

nies actually grow faster and perform better than the local companies after

establishing themselves in the Finnish market.

On average, about 200 foreign companies locate in Finland every year. Their

main reasons for coming Finland are access to the Finnish and surrounding

markets of 80 million people, as well as the country’s world-class expertise

and technology. Other important reasons include safety, the clean envi-

ronment, and the lack of bureaucracy and corruption. Finland’s modern

infrastructure, logistics and communications networks are also attractive

to many companies.

Many companies that invest in Finland use it as a base to also manage their

business in the Nordic countries, the Baltic region and Russia. Finland is

the ideal business gateway to Russia and most of the transit trade from the

EU to Russia already passes through Finland. Finland’s historical, trade and

cultural ties to the neighbouring countries provide valuable insights for

foreign companies. Finland off ers the fastest and least congested air route

According to the latest report from Fitch Ratings, Finland’s AAA status “is underpinned by sound public fi nances, a solid external position, high income per capita, demon-strable political and social stability and an impeccable debt service record”.

José Manuel Barroso, President of the European Commission, recently stated that “Finland has created wealth not through easy money, not with casino money, but with work, discipline and ideas.”


Research, Development & Innovation

from Northern Europe to Asia. Foreign direct investment (FDI) in Finland is

often related to knowledge-driven investments.

Finland has several high-tech clusters with many small technology com-

panies that have cutting-edge expertise but lack capital and have limited

access to the global markets. These include companies specializing in wire-

less and mobile solutions, health care and life sciences, and new materials

and processes. Connecting these companies with the right foreign investors

results in a win-win situation for everyone.

Finnish companies also have extensive know-how in the Cleantech sector,

including biomass-powered energy technologies, combined heat and power

production, and power plant automation. Finland is one of the indust-

rialised world’s leading users of bio-energy and a developer of combustion

technologies and eff ective fuel chains. Wind energy is another national

and global growth sector with good potential for a high return on invest-

ment. Finland is committed to introducing a new feed-in tariff system and

funding which are intended to attract major investments into the wind

energy sector.

One of the sectors which is expected grow markedly in the future is Business

Services. In 1995 Business Services made up 5% of the GDP but in 2006 the

fi gure was already 7.7%. This trend is expected to continue as outsourcing is

gaining ground and economic activities are diversifi ed. In the public sector

many municipalities are merging and also looking for new outsourcing

possibilities.

OECD statistics show that Finland’s unit labour costs have fallen during the

period 1990-2009, improving the country’s competitiveness in relation to

the OECD average. Wages are lower in Finland compared to the other Nordic

countries.

FDI IN 2008

In 2008, 185 new foreign companies established themselves in the Finnish

market. About 60% of the FDI in Finland was made through business acqui-

sitions. The majority of the companies located in the Helsinki metropolitan

area. About half of the FDI was in the Trade & Services sector. The next most

popular sectors were ICT, environment, healthcare, forestry and the mining

industry. The biggest number of companies came from Sweden, followed by

the UK, Germany and USA. Chinese companies featured in the FDI statistics

for the fi rst time.

Expertise and innovations play an increasingly important role in Finland’s

future strategy,Innovation refers to competence-based competitive

advantage that can emerge from scientifi c research, technology, business

models, service solutions, design, brands or methods of organising work

and production. Capitalised as innovations, competence based competitive

advantages promote the advancement of businesses, society and wellbeing.

This is why innovation is an integral part of the R&D process.

Finland ranks in the top three globally in R&D spending per capita (WEF

2006). Finland is at the top of the list when comparing the infl uence R&D

has on the country’s competitiveness. A lot of assets are put into R&D in

Finland; 4.5 per cent of total government spending in Finland is spent on

Research, Development and Innovation. Businesses in the Helsinki region

invest over 40 per cent of all investment in research and product devel-

opment by Finnish companies. Businesses and the institutions of higher

education work closely together in R&D: 70 per cent of companies with R&D

activities cooperate with universities and universities of applied sciences.

R&D INTENSITY AND COMPETITIVENESS

Finland has a long history of investing in research and education. These

investments give Finland a competitive advantage. The relationship between

R&D intensity and competitiveness factors is very strong: Finland is the

most competitive country in Europe and its R&D intensity is second highest.

32,862 research personnel work in Helsinki and 79,507 in Finland in total. They are divided between companies, public sector, non-profi t organizations and the university sector.(Statistics Finland 2007)

R 2 = 0,52

Finland Luxembourg

Switzerland Sweden

Ireland Italy

Greece Portugal

Czech Republic Hungary

Slovak Republic Poland

UK Germany

Norway Denmark

Belgium Netherlands

France

Spain

EU

RO

PE

AN

CO

MP

ETI

TIV

EN

ES

S IN

DE

X 2

006-

2007

R&D INTENSITY (% of GDP)

Competitiveness and R&D Intensity in European countries

Sources: http://fi ordiliji.sourceoecd.org/vl=1845686/cl=12/nw=1/rpsv/sti2007http://www.hugginsassociates.com/

VTT Technical Research Centre of Finland is a non-profi t-making research organization established in 1942. VTT is the largest multi-technological applied organization in Northern Europe. It provides high-end technology solutions and innovation services. Striving to improve its clients’ competitiveness and compe-tence, VTT combines different tech-nologies, creates new innovations and a substantial range of world-class technologies and applied research services.

VTT uses its extensive international scientifi c and technology network to produce informationrmation, upgrade technology knowledge and create business intelligence and value added to its stakeholders.

VTT’s nearly 6,000 customers are both domestic and foreign companies as well as public organizations in Finland and abroad. In 2008, VTT employed approximately 2,700 people.

Over the past 20 years VTT has made about 1,000 domestic and over 1,800 foreign patent applications. Over the past 20 years it has also published nearly 50,000 publications. At the beginning of 2008 VTT had 950 patents and patent applications in its portfolio.

More information in English: www.vtt.fi

Over the past 20 years VTT has made approx. 1,000 domestic and over 1,800 foreign patent applications.


Principal Industrial and Business Sectors

PATENTS

Finland has a high number of patent applications in relation to the country’s

population 5.3 million. It has more resident patent fi lings per million popu-

lation than some of the other Nordic countries such as Sweden, Denmark,

and Estonia.

Tekes (the Finnish Funding Agency for Technology and Innovation) is the main government fi nancing and expert organization for research and techno-logical development in Finland, founded in 1983. Tekes fi nances industrial R&D projects as well as projects in universities, polytechnics and research institutes. It focuses especially on challenging, innovative and risk-intensive projects.

Tekes employs 370 people. Along its Helsinki-based headquarters Tekes has 14 so-called regional T&E Centres throughout Finland and six offi ces abroad in Beijing, Brussels, Tokyo, Shanghai, Silicon Valley and Washington D.C.

Tekes funds its target projects through low-interest loans or grants, depend-ing on the stage of the innovation and the nature of the proposed project. Tekes also awards fi nancing to foreign owned companies registered in Finland. Foreign companies with R&D activity in Finland are not required to have a Finnish partner to be eligible for funding. The fi nanced project should, however, contribute to the Finnish economy.

In 2008, Tekes was actively funding nearly 2,000 projects with 516 million € altogether and had a total of 1,954 completed projects.

More information in English: www.tekes.fi

Patent applications and granted in Finland, Sweden, Denmark and Estonia

Finland Sweden Denmark Estonia

Patent applications (2007) 2,015 2,925 1,857 63

Patents granted (2006) 1,059 1,490 162 N/A

Source: WIPO / Patent applications by patent offi ce (1883-2007), Patent grants by patent offi ce (1883-2007)

Patent fi lings in Finland, Sweden, Denmark and EstoniaResident* patent fi lings per million population (2006)

Finland 345.57

Sweden 270.40

Denmark 276.87

Estonia 26.84

Source: WIPO / World Patent Report a statistical review, 2008.* Resident: The “resident” fi ling refers to an application fi led with the Offi ce of or acting for the State in which the fi rst named applicant in the application concerned has residence.

Graduates from fi elds of science in total and from some broad subject areas

Source: Statistics Finland 2007

6,110

2,526

1,109

1,061

608

598

Fields of science total

Social sciences

Humanities

Engineering and technology

Medical and health sciences

Natural sciences

In the 1950s the Finnish economy was still largely based on primary

production and an agrarian workforce. Today Finland is leading or near

the top of most international comparisons in terms of growth and develop-

ment in the economic, technological and social spheres. According to

The Research Institute of the Finnish Economy, the system has combined

economic effi ciency and growth with a peaceful labour market, an egali-

tarian distribution of income and social cohesion, backed up by a generous

social security system.

The largest sector of the Finnish economy is Services at 65.7%, followed by

Manufacturing and Refi ning at 31.4%. Primary production is at 2.9%. Fin-

land’s main industrial products are paper and board, electronics and metal

products. The engineering and high technology industries, led by Nokia,

have long been the leading branches of manufacturing.

Foreign trade plays an important part in Finland’s economy, which is fi rmly

integrated into the global economy. In 2008, about 53% of Finland’s trade

was with the EU countries. Finland’s major trading partners are Germany,

Russia, Sweden, United Kingdom, USA, Netherlands and China. Finland is

the only country in Northern Europe to use the Euro as its currency.

TRADITIONAL INDUSTRY

Finland’s largest industrial sector is technology-based and growth in recent

years has been rapid. Many companies operating in this sector are Finland’s

leading exporters and internationally recognised as innovation pioneers.

Finnish companies engaged in electronics and electro-technical activities

generate innovative solutions which are employed in production processes

all over the world, from underground trains to wind power plants, from

space technology to sports and medicine.

The metals sector includes metalsproduction, the further refi ning of steel

and copper products, zinc and nickel for use in the machine, vehicle, con-

struction, electronics and electro-technical industries, and mechanical

engineering. Finnish metal processing is well known for its effi cient uti-

lisation of energy and raw materials, and holds world-leading positions in

a number of processes. More than half the world’s copper and a third of all

nickel is manufactured using the fl ame melting technology developed by

Finns. State-of-the-art cruise ships are built in Finland’s shipyards.

The chemical industry is Finland’s third-largest industrial sector. The range

of products manufactured is huge, with most of them being used in other

Finland has developed world-class expertise in sectors like cleantech, forestry, metal and machinery manufacturing, ICT industry and services, and health and wellbeing. International investors and companies can benefi t from the clusters and centres of expertise in these business sectors that aim to maximize the benefi ts of research, net-working and international cooperation.


industries, especially forestry and agriculture. Products include plastics,

paints, oil products, pharmaceuticals, environmental products and petro-

chemicals.

More information in English at the Federation of Finnish Technology Industries:

www.teknologiateollisuus.fi

PAPER AND PULP

Finland has a uniquely strong and diverse businesses based on forest

resources. This concentration of expertise is referred to as the forest cluster.

Wood products, pulp, paper and paperboard, and other processed products

form the core of the forest cluster, which also includes forestry entrepre-

neurs, logistics companies, machinery and equipment manufacturers,

energy producers, chemicals manufacturers, related research institutions,

universities and consultancies, packaging industry, and the wood-based

construction industry.

The forest cluster accounts for some 10% of Finland’s GDP, about 30% of

aggregate industrial output and about a third of net export income. The

cluster directly or indirectly employs around 200,000 people in Finland.

The aggregate R&D expenditure of the forest cluster is estimated to total

€400-500 million annually. The Finnish forest cluster is also a strong player

in the global trade arena. Finland’s share of the exports of forest-cluster

products in the industrialised countries is almost 8%.

In addition to the traditional products like newspapers, books, packag-

ing and furniture, wood and its constituents are also used to manufac-

ture sweeteners for chewing gum and a cholesterol-lowering additive for

margarine spreads, for example. Other possibilities include the addition

of `smart´ components or nanotechnology to wood-fi bre-based products,

creating entirely new kinds of product opportunities for the forest industry.

HI-TECH INDUSTRY

From eco-friendly batteries to remote diagnostic services for the health sec-

tor, and the production of metals with the help of microbes, there is a wealth

of exciting work being carried out by Finnish companies and researchers at

the cutting edge of technological development in diff erent sectors of the

economy.

Investment decisions are increasingly shaped by issues of sustainability

and responsibility. Finnish companies are delivering technologies for

improved environmental and economic performance by making better use

of raw material inputs, using less energy, consuming less water and other

utilities, reducing emissions, and creating a safer operational and working

environment.

To spark the imagination of international investors and companies, High-

Tech Finland is profi ling a broad cross-section of work by Finnish companies

and researchers in areas ranging from mobile communications and sus-

tainable energy to environmental technologies, new types of health care,

advanced industrial processes and materials, and more.

More information in English at HighTech Finland: www.hightechfi nland.fi

ICT

As one of the most advanced information societies in the world, Finland is

known as a leader in ICT innovation and high quality ICT products. The sec-

tor has enjoyed strong growth during this decade.

Finland has much to off er international investors and companies in the ICT

sector, including fi rst-rate availability of talented and qualifi ed ICT engi-

neers, and easy access to public R&D funding and development networks.

Finland has strong domestic demand for ICT products and services, and

there are also profi table opportunities in Russia and the Baltic countries.

Predictably, Finland has a very strong mobile cluster driven by Nokia. Other

ICT clusters in Finland include Digibusiness, Ubiquitous Computing and the

Nanotechnology Cluster.

Finland is an excellent test bed for new technologies. For example, the city

of Oulu in central Finland has become a global hub for the research, develop-

ment and piloting of wireless technologies. It has more than 800 ICT compa-

nies with specialized focus areas in Near Field Communication (NFC)/RFID,

sensors, Assisted GPS (AGPS) location services, contextual internet, mobile

internet, digital mobile media and realXtend virtual world technologies.

Applications are also being developed for ubiquitous computing, health care

and the elderly, bio- and nanotechnology, security and environmental pur-

poses.

More information in English at TIEKE Finnish Information Society Development Centre:

www.tieke.fi

CLEANTECH

Finnish cleantech companies off er advanced environmental technologies

that can succeed in global markets and provide a signifi cant return on

investment.

The cleantech business is estimated to grow at a pace of 5–15% per year world-

wide and Finland is considered as one of the most progressive countries in

the world in terms of its cleantech expertise and associated technologies.

This know-how provides international companies with excellent opportuni-

In the musical instruments industry,

exotic tonewoods such as ebony,

widely used in everything from acous-

tic guitars to clarinets, are increasingly

diffi cult to source.

Finnish guitar maker Flaxwood uses

patented technology to produce

musical instruments or instrument

components by mould-injecting

organic fi ber-composite materials

using spruce or other sustainably

harvested woods. The results rival

instruments produced using the very

fi nest exotic hardwoods. Flaxwood’s

own line of guitars has proven the

viability of the technology, having

garnered recognition at the highest

level among musicians, and in the

music industry press. Flaxwood’s

guitars were recently awarded the

prestigious “Premier Guitar Gear

Award”.


ties to benefi t from innovative environmental technology companies, solu-

tions, products and services. These include, for example, technologies that

combine waste management and energy production, distributed energy

production, and products and industry-specifi c technologies that can be

seamlessly integrated into large-scale environmental projects.

The Finnish Cleantech Cluster is comprised of about 200 companies and

is made up of the four most notable centres of expertise within the sector,

located in Kuopio, Lahti, Oulu, and Helsinki and the surrounding areas.

The four centres cover around 60% of Finland’s cleantech business and 80% of

cleantech research. Finland’s sparsely populated areas and relatively small

waste quantities also off er ideal conditions for testing new technologies.

Each centre specialises in diff erent aspects of cleantech expertise and strives

to promote the growth and internationalisation of the associated busi-

nesses. They collaborate with each other and network with local businesses

and academia. For international companies the cluster also represents a

useful gateway for fi nding partners in Finland.

Finland was ranked as one of the world’s leading countries in environmental

sustainability in the 2006 Environmental Performance Index (EPI), which

provides benchmarks for national pollution control and natural resource

management results.

More information in English at: www.cleantechfi nland.fi

BIOTECHNOLOGY

Finland is ranked among the top 10 countries worldwide for biomedical

science and clinical medicine, and biotechnology is one of the most promis-

ing high-tech industries in the country. Today Finland’s pharmaceutical

market is worth €1.6 billion and is closely integrated into the global indus-

try through ownership arrangements. Finland’s domestic market off ers an

excellent platform from which to launch and develop innovative healthcare

products.

Finland is also a global leader in the development of new niche applications

based on biotech innovations, such as biomedicals, gene technology and

molecular biology, human genetics, implants, biomaterials, drug discovery,

diagnostics and drug delivery devices. Finnish pharmaceutical and biotech

companies are continuously looking to develop international partnerships.

This includes overseas companies or corporate venturing units for strategic

investment or research cooperation. For example, new biopharmaceuti-

cal companies such as Biotie Therapies Corp, Hormos Medical Corp. and

Juvantia Pharma Oy Ltd are aiming to launch spearhead products globally

through partnerships with international pharmaceutical companies.

Finland off ers a range of possible biotechnology cooperation partners with

diff erent profi les. These include innovative start-ups with skilful, devoted

employees and potential patents for further development. There are also

established drug discovery companies and biotechnology companies inter-

ested in forming strategic partnerships to develop and launch new thera-

peutic methods and products. Finally, there are interesting merger and

acquisition candidates specializing in a particular diagnostic/therapeutic

fi eld.

There is a healthy level of funding and resources available to overseas pharma/

biotech investors and companies interested in establishing a presence in

Finland or developing ties to Finnish R&D networks. The major funding

organisations are Tekes – the National Technology Agency, the Academy of

Finland, Sitra, Finnvera, Finpro and the network of regional Technology Cen-

tres and Centres for Employment and Economic Development. This includes

VTT Technical Research Centre of Finland, the largest technological R&D

organisation in the Nordic region.

Many Finnish bio-products – such as drugs, enzymes and diagnostic tests –

have already been successful in the global marketplace. For example, Orion

Pharma, the largest pharmaceutical company in Finland, is behind Prece-

dex, a popular pain-relieving tranquilliser used in intensive care. Leiras

(today owned by Schering) has also developed the polymer-based Delvivo

drug delivery technology for the hormonal contraceptive Mirena.

More information in English at Tekes: (www.tekes.fi ) • The Academy of Finland: www.aka.fi

• Sitra: www.sitra.fi • Finnvera: www.fi nnvera.fi • Finpro: www.fi npro.fi • VTT: www.vtt.fi

MINING INDUSTRY

FINLAND – A MINING FRIENDLY COUNTRY

Finland has excellent geological databases, good infrastructure and readily

available exploration services. These factors make operations in Finland

attractive and cost-eff ective.

In October 2008, Resource Stocks magazine ranked ’Finland as the safest

place to spend exploration dollars. The mining and minerals industry is very

important to the country, and plays an increasing role in our economy, both

domestically and outside Finland.’

Finland off ers the exploration industry a favourable investment and operat-

ing environment, with signifi cant potential for new discoveries as many

commodities are still highly under-explored. Present activity is concentrated

on gold, platinum group metals, base metals, diamonds and industrial

minerals. Finland has an excellent geological database, good infrastructure

and readily-available exploration services.


MINING AND MINERAL PRODUCTION

Finland has a long history of mining activity, and Finnish metallurgi-

cal technology and manufacturers of mining equipment are well known

throughout the international mining community. The exploitation of cop-

per, nickel, cobalt, zinc and lead ores as well as chromium, vanadium and

iron deposits has provided the raw material base for the country’s metal

industry. The major industrial minerals mined in Finland are carbonates,

apatite and talc.

• Mining history dates back to 1540 when iron ore mining commenced

• Some 270 metal mines have been in operation

• Total output has been 250 million tons of ore (66% sulfi de and

34% oxide ores)

• Main commodities have been: Cu, Ni, Zn, Co, Cr, Fe, V

• Industrial mineral operations include limestone, apatite, talc, quartz,

feldspar and wollastonite

• Well established mineral processing and refi ning plants exist for

Cu, Ni, Zn, Co, Cr & Fe ores as well as for phosphorus fertilizers,

titanium pigments & coating carbonates

TRADE AND SERVICES

There are many opportunities for international investors and companies

in Finland’s Trade and Services sectors, which have grown strongly in the

last few years. Finland is also a cost-eff ective business centre from which

to serve both the domestic and surrounding markets, including the vast

potential of Russia and the Baltic countries.

The retail trade and services have grown strongly as Finnish consumers

enjoy spending time in the city centres and shopping centres, which are

being developed across the whole country.

The Finnish property market continues to deliver a stable return on invest-

ment. There is also a growing demand for service producers due to increas-

ing outsourcing in both the public and private sectors. Facility services like

catering and security services are growing fast, creating opportunities for

international companies. The large neighbouring market area, especially

Russia, off ers additional business opportunities.

Finland’s central location in Northern Europe, combined with its modern

infrastructure and logistical connections, present excellent opportunities

for international logistics companies. Finland also off ers a working border

crossing with Russia and the fastest and least congested transport channel

from Europe to Russia, China, Korea and Japan.

Finland’s Travel and Tourism sector off ers a dynamic business climate, a

clean and unique environment with four distinct seasons, and a society that

is both safe and internationalized. The number of foreign visitors in Finland

has increased signifi cantly during recent years. According to forecasts by

the World Travel Tourism Council (WTTC), the total demand for travel in

Finland will grow by 33.7% between 2006 and 2016.

More information in English at Visit Finland: www.visitfi nland.com


Business Environment

Finland’s business environment is characterized by a well-functioning

partnership between the public and private sectors, and has proved itself

with a record of sustained growth during the past decade and more.

The public institutions that underpin Finland’s economic development are

highly ranked in international comparisons. The country’s institutions and

regulatory administration perform eff ectively and transparently, and sup-

port the private sector to drive the economy forward.

Finland’s corruption level is among the lowest in the world and there is a

strong respect for the law in both the business world and the society at large.

Finland’s security environment is often at the top of the global rankings.

The cost of doing business in Finland is competitive and the corporate tax

rate is one of the lowest in Europe. Foreign-owned companies have full

access to the investment incentives and dynamic innovation environment

available in Finland. The country’s workforce is highly educated and compu-

ter literate, so skills and know-how are readily available. Foreign investors

can also draw on the Finns’ expertise in doing business with the neighbour-

ing countries in terms of logistics, cultural knowledge, language skills, and

experience in venture capital operations.

Science, technology and innovation are nurtured at the highest level of

the Finnish government and through the eff ective framework that brings

together companies, universities, research institutes and public funding

bodies. Key issues concerning technology are regularly discussed at the

Research and Innovation Council, chaired by the Prime Minister.

INNOVATION ENVIRONMENT

Finland is internationally known for its high level of innovation and tech-

nological expertise. Finnish innovations include the text message (SMS),

lactose free dairy products, Xylitol tooth friendly sweetener and the Linux

computer operating system, to name but a few.

Finland is one of the most research-intensive countries in the world.

National spending on research and development totals EUR 6 billion, or 3.4%

of the GDP. Companies account for 71% cent of R&D expenditure. Finland

leads the fi eld in terms of utility patents in the EU and also has the biggest

turnover (15.6%) from new products in the Nordic countries.

During the past decade, the number of R&D personnel in Finland has grown

from 40,000 to nearly 80,000, which is 2% of the overall labour force and the

highest fi gure among the OECD countries. The number of doctorates has

also nearly doubled in the last ten years.

The Ministry of Employment and the Economy oversees Finland’s technol-

ogy policy. The key expert and funding organisations in the Finnish innova-

tion environment are Tekes, the Academy of Finland and Sitra (the Finnish

Innovation Fund). They run technology and research programmes that net-

work industry and the academia, as well as providing funding for the best

scientist and R&D companies in Finland. At the regional level, the technol-

ogy policy is implemented by the T&E Centres (Employment and Economic

Development Centres).

Universities and polytechnics form the higher education sector, which is

exceptionally dense and regionally comprehensive by international compar-

ison. Finland also has 21 government research institutes and several science

parks, business incubators and technology centres. The knowledge transfer

between business and universities is one of the key features of Finland’s

economy and innovation policy.

TRANSPARENCY AND ANTI-CORRUPTION

Corruption is a global problem and it exists in all countries and regions. In

Nordic countries corruption is less of a problem than in many other coun-

tries and one signifi cant reason is the solid tradition of transparency in the

administration.

A report by Transparency International shows that in 2007, Finland ranked

fi rst in anti-corruption. The index draws on a number of expert opinion

surveys that poll perceptions of public sector corruption in 180 countries.

While many countries are perceived to be facing serious domestic corrup-

tion, Finland’s high levels of civil service integrity continue to facilitate

business and public sector effi ciency.

The fact that the police force is seen as the most trusted and reliable insti-

tution in the country tells a lot about the low level of corruption in Finn-

ish society. The lack of corruption makes doing business in Finland more

straightforward than in most places and is one of the attractive features of

the country as an investment location.

According to the study Combating Corruption – the Finnish experience by the

Ministry for Foreign Aff airs, there is a combination of reasons that help to

prevent corruption in Finland. The fi rst is a popular value base that promotes

moderation, personal restraint and the common good. Secondly, Finland has

WEF’s The Enabling Trade Index 2008 ranked Finland’s business environment as the best in the world.

Finland is among the top countries globally in terms of R&D spending per capita. Finnish companies and consumers are early adopters of emerging technologies, which makes Finland an ideal test bed for new solutions and technologies.

The Finnish government’s innovation policy is an important part of its economic policy. It aims to foster the preconditions for innovation, provide incentives for it, and ensure the viability of the innova-tion environment. The active dialogue between companies, universities, research institutes and R&D fi nanciers is one of the cornerstones of Finnish innovativeness.


developed well-functioning legislative, judicial and administrative struc-

tures that closely monitor and guard against the abuse of power. Thanks to

effi cient law enforcement, professional crime investigation methods, and

modern budgetary, accounting and auditing practices, the likelihood of

fi nding and apprehending the perpetrators of corruption is high.

The obligation to provide public argumentation for decisions and public

access to offi cial documents also increases transparency and public trust

in governance. Finland’s independent media is quick to expose even minor

abuses of offi cial functions. Another important factor contributing to the

culture of accountability and preventing the abuse of power is the promi-

nence of women in parliament and high public offi ces in Finland. Finally,

the low-income disparities and adequate wages in Finland serve to reduce

the propensity to accept bribes. Good wages, in turn, require a strong public

economy and a strong corporate sector.

INFRASTRUCTURE

Advanced transport infrastructure and logistics are key strengths of Fin-

land’s domestic economy and its lively trade with the Nordic and Baltic

countries, the EU, Russia and Asia. Business is served by excellent roads

and railways, and a vast network of waterways, canals and sea lanes. As the

eastern border of the EU, Finland is the ideal business gateway to Russia.

The countries share the same rail gauge, so rail cars do not require modifi ca-

tion or reloading when they cross the border.

Finland has 24 airports serving airfreight and passenger traffi c, including the

Helsinki-Vantaa Airport, which is recognised among the world’s best interna-

tional airports in IATA and ASQ surveys. Helsinki-Vantaa Airport off ers global

connections to more than 120 destinations and is an increasingly popular

gateway to Asia as the fastest route between Northern Europe and Asia.

Finland’s fully automated, state-of-the-art ports are highly specialized and

rank among the safest and fastest in the world. Car ferries and container

ships serve the region with regular daily departures. The newly opened

Vuosaari Harbour has been built in a key location for effi cient transport con-

nections in a total market area of 80 million consumers.

The world’s leading providers of logistical services are represented in Fin-

land. They off er the full range of specialist aircraft, ships and vehicles, and

the latest technology for automated warehousing and real-time monitoring

of shipments.

Finland has been an early adopter of emerging digital and wireless tech-

nologies, and Nokia remains the global leader in the mobile phone market.

As a result, Finland’s scientifi c, technological and telecom infrastructure

is highly developed. Internet, broadband and mobile phone penetration is

among the highest in the world.

ENERGY

Foreign investors in Finland can depend on a highly reliable and cost-eff ec-

tive power supply to run their business with maximum effi ciency. Finland’s

power generation, transmission and distribution systems are highly effi -

cient and the price of electricity is among the lowest in Europe. EU Eurostat

fi gures show that in terms of purchasing power, the price of domestic elec-

tricity in Finland is the cheapest in the EU countries and about one third

lower than the average price in the EU.

Finland’s energy policies are focused on energy security, economic develop-

ment and environmental sustainability. Power generation in Finland

is decentralised across more than 400 power stations, which use several

diff erent production technologies and raw materials. This diversifi ed

approach ensures a very stable energy supply and has kept the price of elec-

tricity, natural gas, wood and peat at a competitive level.

Nuclear power and hydropower are currently the two largest sources of

energy. The construction of a fi fth nuclear power plant, will ensure that

future energy demand is met and keep price increases at a moderate level.

Finland has taken the lead internationally in removing unnecessary regula-

tions in the energy sector, creating the preconditions for the internationali-

sation of its energy companies.

FINLAND – LEADER IN BIO ENERGY

Finland is one of the industrialised world’s leading users of bio-energy and a

developer of combustion technologies and eff ective fuel chains. The Finnish

energy cluster has special expertise in biomass-powered energy technolo-

gies, cogeneration (combined heat and power production) and power plant

automation. Cogeneration is exceptionally high in Finland, resulting in

fewer emissions to the environment.

Research and development is constantly carried out into the use of renew-

able energy resources such as barley ethanol, turnip rape and logging waste.

About 30% of all the energy consumed in Finland today is produced from

renewable raw materials and it is possible to purchase exclusively green

electricity generated from environmentally friendly sources.

ENVIRONMENTAL PERFORMANCE

In line with the EU’s energy policy, the Long Term Climate and Energy

Strategy recently adopted by the Finnish Government aims at decreased

energy consumption as well as intense growth in the share of renewable

energy sources.

Finland’s highly developed transport and communica-tions infrastructure enables strategic access to the expanding markets of Northern Europe, Russia and Asia.

Finland’s energy sector produces a reliable and affordable power supply and is a world leader in the use of bio-energy.

Environmental Performance IndexRank Country Score

1 Switzerland 95.5

2 Sweden 93.1

3 Norway 93.1

4 Finland 91.4

5 Costa Rica 90.5

6 Austria 89.4

7 New Zealand 88.9

8 Latvia 88.8

9 Colombia 88.3

10 France 87.8

11 Iceland 87.6

12 Canada 86.6

13 Germany 86.3

14 United Kingdom 86.3

15 Slovenia 86.3

16 Lithuania 86.2

17 Slovakia 86.0

18 Portugal 85.8

19 Estonia 85.2

20 Croatia 84.6

Sources: Yale University, Colombia University, World Economic Forum, European Commission 2008

Finland ranked fourth in the Environmental Performance Index in 2008. The index measures national perfor-mance in environmental policy development and implementation.


Investment Incentives

Foreign investors in Finland are eligible for a wide range of government

and EU incentives on an equal footing with Finnish-owned companies.

Business aid to companies is coordinated by the Employment and Economic

Development Centres. The 15 regional offi ces of these T&E Centres also pro-

vide consulting, training and advice on registration issues and location

choices. Foreign investors can benefi t from several diff erent types of aid:

Investment aid can be granted to companies in the regional development

areas, especially small and medium-sized enterprises (SMEs). Large compa-

nies may also qualify if they have a major employment impact in the region.

Aid to business development can be granted to improve or facilitate the

company’s establishment and operation, know-how, internationalisation,

product development or process enhancement.

Subsidies for start-up companies are available for establishing and expand-

ing business operations during the fi rst 24 months.

Transport aid may be granted for deliveries of goods produced to sparsely

populated areas like Lapland, Northern Ostrobothnia, Kainuu, Northern

Karelia, and Savo.

Energy subsidies can be granted to companies for investments in energy

effi ciency and conservation.

Tax relief is available for companies setting up in Development area 1 (North-

ern and Eastern Finland) in the form of a higher depreciation rate on fi xed

assets.

The state-owned fi nancing company Finnvera off ers services to businesses

of all sizes and in all sectors, except basic agriculture. Its services range from

loans and guarantees, to start-ups and micro-enterprises, to export credit

guarantees to large exporters and their fi nanciers. Finnvera is also Finland’s

offi cial Export Credit Agency (ECA).

More information in English on Finnvera: www.fi nnvera.fi

Tekes, the Finnish Funding Agency for Technology and Innovation, provides

low-interest loans and grants to challenging and innovative projects poten-

tially leading to global success stories. Foreign-owned companies with R&D

activities in Finland are not required to have a Finnish partner to be eligible

for funding. In 2008, Tekes invested EUR 516 million in 1,983 innovative

projects.

More information in English on T & E Centres: www.te-keskus.fi • Ministry of Employment

and the Economy: www.tem.fi • Enterprise Finland: www.enterprisefi nland.fi

VENTURE CAPITAL

Venture capital is available from various private and public sources. The

three sources of public venture capital in Finland are:

Finnvera: www.fi nnvera.fi

Sitra: www.sitra.fi

Tekes – Finnish Funding Agency for Technology: www.tekes.fi

EU funding is largely channelled through the T&E Centres. It is directed to projects developing the competitiveness, know-how and operating environ-ment of the SME sector, with a special emphasis on start-up businesses and service sector companies.

Million

313 350

877

384

0 100 200 300 400 500 600 700 800 900

1,000

2005 2006 2007 2008

Source: The Finnish Venture Capital Association

* Includes both venture capital investments and buyout investments made by the actual members of the Finnish Venture Capital Association.

Total amount of VC investments* in Finland

0.044%

0.052%

0.051%

0.021%

0.026%

0.051%

0.248%

0.350%

0.091%

0.098%

Finland

Sweden

Denmark

EU

OECD Early stages

Expansion

Venture capital investment as a percentage of GDP

Source: OECD 2005

More information on private VC sources at the Finnish Venture Capital Association:

www.fvca.fi .


Setting up a Business in Finland

Foreign companies are welcome in Finland and the process of establishing

a business is quick and easy. The incorporation process usually takes about

2–3 weeks.

Types of business. In Finland foreign companies most commonly conduct

business through private or public limited liability companies or a Finnish

branch offi ce. Business can also be conducted through general or limited

partnerships or cooperatives. A foreign organization or foundation can also

establish a branch in Finland for business.

More information in English on public authorities, trade regulations, and employment

issues at Enterprise Finland: www.enterprisefi nland.fi

SETTING UP A LIMITED COMPANY

Foreigner as founder of a limited company. A limited company may be estab-

lished by one or more natural or legal persons (founders). At least one of the

founders shall be permanently resident or, if the founder is a legal person,

have its domicile in the European Economic Area - unless the National Board

of Patents and Registration grants an exemption from this rule. The nation-

ality of the founder is thus irrelevant. A legal person shall have its domicile

in the EuropeanEconomic Areawhen it has been established in accordance

with the laws of a State belonging the European Economic Area and when its

registered offi ce, central administration or head offi ce is in a State belong-

ing to the European Economic Area. A person who is legally incompetent or

declared bankrupt may not act as founder.

Permission of the National Board of Patents and Registration to act as

founder. If a permit is required, the application, free in form, is be submit-

ted to the National Board of Patents and Registrations either in Finnish or

in Swedish. An application fee (100 euros) is paid for each decided permit. If

permits are applied for three founders of a limited-liability company, three

fees are charged (total of 300 euros). The fee is charged after the decision to

grant or to deny the permit has been made.

Selecting a business name. A name must be chosen for the company before

the formation documents have been completed and the company applies for

entry in the Trade Register maintained by the National Board of Patent and

Registration. The name must identify the business and be distinct from the

business names already in the register.

The European Economic Area (EEA)

was established on 1 January 1994

following an agreement between

member states of the European Free

Trade Association (EFTA), the Euro-

pean Community (EC), and all member

states of the European Union (EU). It

allows these EFTA countries to partici-

pate in the European single market

without joining the EU.

More information in English on registered business names, names pending registration

and auxiliary business names at Business Information System: www.ytj.fi • National

Board of Patent and Registration: www.prh.fi

Trade name of a limited company. The trade name of a private limited com-

pany must include the words “osakeyhtiö” (limited company) or the corre-

sponding abbreviation “oy” and the trade name of a public limited company

shall include the words “julkinen osakeyhtiö” (public limited company) or

the corresponding abbreviation “oyj”. The notifi cation fee of a limited com-

pany is 330 €. The registration of an auxiliary trade name is 60 € per name.

Share capital. A private limited company shall have a minimum share capi-

tal of 2,500 euros and a public limited company, 80,000 euros. The share

capital must be paid to the company’s account in full before the company

can be entered in the Trade Register maintained by the National Board of

Patents and Registration. The mandatory Trade Register’s fee is EUR 330 and

the auditor’s fee to certify the deposit share capital is around EUR 200-300.

The cost of incorporation by a law fi rm is around EUR 1250.

Registration formalities. New businesses submit the basic declaration to

the Trade Register using the start-up notifi cation form. This form can also

be used for registration in the Trade Register, Tax Administration, register

of VAT liable businesses, register of employers, and the tax prepayment

register. For legal purposes, limited liability companies and cooperatives

are only established when they have been entered in the Trade Register

maintained by the National Board of Patents and Registration. The registra-

tion fee for a private trader is EUR 65, partnership EUR 155, and for a limited

company EUR 330. A company must register the following documents with

the Trade Register within three months of signing the memorandum of

association: its articles of association and memorandum, minutes of the

board of directors’ meeting (to register the board’s chairman), a directors’

certifi cate, and an auditor’s certifi cate.

Statutory obligations. In a limited liability company an Ordinary General

Meeting must be held in each accounting period, unless otherwise stipu-

lated in the Articles of Association. All registered companies must appoint

a professional auditor to audit their annual accounts, except for the small-

est companies, which are exempt from this requirement. Companies must

submit their annual accounts to the Trade Register. Public companies must

prepare and publish interim reports at least four times a year. There are no

costs for complying with the reporting requirements.

Limited companies are divided into private and public companies Public companies are listed on the stock exchange.


Employment and the labour market

ESTABLISHING A LIMITED COMPANY

Setting up a Branch of a Foreign Organization. A branch refers to a part of

a foreign organization or foundation that conducts continuous business or

professional activities in Finland from a permanent place of business in

Finland in the name and on behalf of the foreign organization or founda-

tion. The trade name of a branch of a foreign entrepreneur established in

Finland shall contain the trade name of the foreign entrepreneur with a

supplement, which indicates that it is a branch - e.g. CDE Cargo Ltd., branch

of Finland. A trade name may be registered in two or several languages if

the expressions in the diff erent languages correspond to each other in their

contents. The notifi cation fee of a branch of a foreign organization is 330 €.

Trade permit to the National Board of Patents and Registration. A foreign

organization or foundation having its registered offi ce outside the EEA,

seeking to establish a branch in Finland, must apply for a permission to

establish the branch from the National Board of Patents and Registration.

The performance fee for the trade permit for a branch of a foreign organiza-

tion is 100 €. The decision is sent to the applicant or his representative C.O.D

(cash on delivery).

Acquisition of a business. You do not need to found a business yourself; you

can also acquire an enterprise or its business operations, or become a part-

ner in an existing enterprise. The object of acquisition may be, for example,

a private undertaking, shares in a general or limited partnership, the entire

stock of a limited liability company or a majority of the shares. You can

become a member of an existing cooperative by paying the participation

share.

Finnish law does not impose any restrictions on foreign ownership; foreign-

ers may also acquire Finnish enterprises. More information on the right of

non-EEA residents to found an enterprise or be involved in the administra-

tion of a Finnish enterprise can be found on the section “Permits from the

National Board of Patents and Registration for non-EEA residents”.

A large number of transfers of businesses to younger generations are

expected in Finland in the next few years. According to diff erent estimates,

between 60,000 and 80,000 enterprises are going to change hands in the

next few years. If no new owner can be found within the family, an alterna-

tive is to sell the business to a third party.

Source and/or more info from.

THE STAGES OF ESTABLISHMENT

OF A LIMITED COMPANY ARE

THE FOLLOWING:

• drafting of the Memorandum

of Association

• drafting of the Articles of

Association (to be included in

the Memorandum of Association)

• subscription of the shares

• Constituent Meeting of the Share-

holders (if not incorporated without

a Meeting of Incorporation)

• adoption of the Articles of

Association

• election of the Managing Director

and the chairman of the Board of

Directors (if elected)

• payment of the share capital

• registration of the limited company.

TRADE UNIONS IN FINLAND

An important function of trade unions in Finland is to run unemployment

funds and to provide earnings-related unemployment benefi ts. These are

typically much higher than the basic unemployment allowance provided by

KELA (the Social Insurance Institution of Finland).

EMPLOYMENT CONTRACTS

In employment contracts and employment relationships, employers must

comply with the minimum requirements on employment terms and condi-

tions stated in a nationwide collective labour agreement considered to be

representative in the sector. An employee posted to Finland is entitled to

the salary determined by a universally valid Finnish collective labour agree-

ment for the sector.

According to the Employment Contracts Act, the employer must provide the

employee with a description of the most essential terms and conditions of

employment if they are not indicated on a written employment contract.

An employment contract can be made for a specifi ed period or until fur-

ther notice. In an employment contract the employee personally commits

to working for the employer under its management and supervision against

wages or other compensation. An employment contract can be made for a

specifi ed period or until further notice. An employment contract for a speci-

fi ed period requires a justifi ed reason. An employment contract can be made

in writing, orally or electronically. There are no requirements regarding the

form of an employment contract. However, it is recommended that contracts

be made in writing, indicating all the terms and conditions.

ACCIDENT AND PENSION INSURANCE

The employer has a statutory obligation to take out accident and pension

insurance for the employees; the employees are also provided with group life

assurance and unemployment insurance in connection with the statutory

accident insurance. The employer must arrange for statutory occupational

health care.

TAX AND SOCIAL SECURITY

The employer is responsible for paying any withheld taxes and social secu-

rity contributions to the tax authorities, and for submitting annual noti-

fi cations to the tax authorities, and the pension and accident insurance

companies, with informationrmation on the wages and salaries paid to

employees.


TERMS AND CONDITIONS OF EMPLOYMENT

Working hours. Regular working hours are usually at most 8 daily hours and

40 weekly hours. In a two week period the working hours are not more than

80 hours and in a three week period 120 hours. The weekly hours may also

be arranged in longer periods during which the average weekly hours do not

exceed 40 hours. Working hours may be arranged by law or collective agree-

ments alternatively, for example in two or three week periods.

OVERTIME RULES

Holidays. An employee has a right to receive pay also for the time he/she

is on annual holiday. Normally holiday leave accumulates 2 days (when

employment has lasted less than 1 year) or 2 1/2 days for each holiday credit

month. Normal wages are paid for the time an employee is on holiday.

Sick pay. According to the law, an employee who is unable to work due to an

illness or an accident is entitled to paid sick leave. Wages are paid for the

day when the illness started (if it had been a working day for the employee)

and for the working days. If the employment relationship at the start of the

disability has lasted for at least one month, the employee will be paid full

wages for the said period. If the employment relationship has lasted for a

period shorter than one month, half of the wages will be paid for the same

period.

Parental leave. Parental leave lasts 158 working days taken during pregnancy

or in the period following birth. It is extended by 60 weekdays per child in

the case of multiple births.

In the case of a baby born prematurely parental leave is 208 working days.

Parents can take their parental leave entitlement in up to two turns of a

minimum of 12 days each. They have to let their employers know about their

parental leave plans at least two months beforehand.

Costs to Business

Statutory contributions by employers amount to about 26% of the gross salary

payable. They include:

• Social security contribution

• Pension insurance

• Unemployment insurance

• Accident insurance

• Group life insurance

Compared to many alternatives, Finland is a very cost-effi cient location

for running a business. For example, the capital city Helsinki has a wide

array of high quality offi ce premises available at competitive costs. The

total costs of employing highly educated professionals in Helsinki are lower

than in most other European locations. Helsinki’s compact size and reliable

transport system helps companies to save money in transportation costs.

Finland’s electricity prices are among the lowest in Europe.

Sources: Statistics Finland, Helsinki Business Hub, Eurostat

MEETING FINNS IN BUSINESS

To succeed as an entrepreneur in

Finland, it is important to be familiar

with the norms, attitudes and customs

of Finnish business culture. There are

many characteristics of western,

individual-based culture in Finnish

society. Finns endeavor to make

sensible use of their time. They follow

timetables and other plans faithfully

and expect the same from others,

expecting well-defi ned targets and

processes, authority and responsibili-

ties. Finns are careful and gather

background informationrmation in

advance, but they make decisions

quickly and thoroughly. Changing a

decision is diffi cult without well-

founded reasons. Power and responsi-

bility are fl exibly distributed with a

strong streak of independence. Finns

dislike being too closely supervised.

Personal dignity is highly valued.

The Finnish way of thinking and

working is very consistent. As a result,

they sometimes shun unfamiliar

modes of operation. In Finnish society,

all are treated equally and the use of

fi rst names universal – but modesty is

appreciated. Finns like to solve con-

fl icts by negotiation, looking for an

outcome that is fair for all. In negotia-

tions, don’t always expect immediate

feedback on your comments, and

enjoy taking breaks from the conver-

sation. Finns greatly value a genuine

interest in Finnish culture and enjoy

discovering cultural differences.

A healthy sense of humour is an asset,

and if you have the opportunity to take

a sauna, try it out, your Finnish hosts

will be mightily impressed.

A typical breakdown of the monthly payments made by the employer for an employee with a salary of EUR 3000.

Salary 3000

Social security payment (2,801%) 84

Pension insurance TyEl (about 21,4%) 642

Unemployment insurance contribution (0,65%) 20

Accident insurance at work compensation (0,3148%) 9

Group life assurance payment (0.074%) 2

Total employer costs € 3757

Typical salaries in Finland, €

Production and operations manager (in business services enterprises) 6,168

Sales and marketing manager 5,563

Electrical engineer 4,232

Chemist 3,934

Artistic specialist and commercial designer 2,202

Average personnel costs per employee in euros (Source: Eurostat 2006)

Real estate, renting and business activities 40,400

Hotels and restaurants 27,100

Transport, storage and communication 39,900


Visas, work and residence permits

People from countries outside the EU may stay in Finland as tourists for

three months without a permit. If they wish to work in Finland, they need

to apply for a residence permit, even if the period of stay is shorter than

three months. EEA and Swiss citizens, their spouses and children under

21 years of age or dependent on their parents’ care do not need a work permit.

Permits for entrepreneurs and employees. The permits required depend

on whether the person is from or residing in another Nordic country, an

EU country or outside the EU. The notifi cations and permits required can

include registering the right to reside in Finland, the residence permits of

the entrepreneur or employees, and registration in the Population Register.

Persons residing outside the European Economic Area (EEA) may also need

a permit from the National Board of Patents and Registration to serve in

managerial and other duties of responsibility in businesses.

VISA APPLICATIONS

Applying for a visa to the Schengen area and application form. Foreign

nationals who need an entry visa are requested to apply at the nearest Finn-

ish mission. In countries where Finland does not have a mission, another

Schengen country can represent Finland in visa matters. The Schengen

member states are Austria, Belgium, Czech Republic, Denmark, Estonia,

Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithua-

nia, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia,

Slovenia, Spain and Sweden. These states have jointly agreed about the rules

concerning the movement of third-country nationals in their territories and

decided which countries’ citizens are required to present a visa.

RESIDENCE PERMITS

Residence permits For Citizens of EU and EEA countries. Citizens of the

Nordic countries (Sweden, Norway, Denmark and Iceland) may freely enter

Finland and reside in the country without a residence permit. They can

also take up paid employment without a residence permit for an employed

person. EU citizens and citizens of Iceland, Liechtenstein, Norway and Swit-

zerland have the right to enter, reside, study, seek work, or practice a profes-

sion in Finland for three months without a residence permit. If the stay

lasts longer than that, they must register their right to reside in Finland at

a police department.

Residence permits for citizens of non-EU/EEA countries. Citizens from non-

EU/EEA countries should apply for a residence permit fi rst. Everyone apply-

ing for a residence permit must fi ll in a separate form. This applies to all

children too. The application is subject to a fee, which will be charged for

children too, even if they are entered in the passport or other travel docu-

ment of a parent or guardian.

Application forms. The application form for a residence permit (OLE 1) and

a list of the required attachments is available from diplomatic missions.

In order for a residence permit to be granted, the applicant must have a

valid passport or other approved travel document. In Finland, the residence

permit with photo is in Finnish or Swedish, depending on which language

the applicant chooses on the application form. There is no provision for

residence permits in English, since EU legislation requires that national

languages be used in each EU Member State.

The cost of a worker’s residence permit is EUR 200.

More information in English on acquiring residence permits at the Finnish Immigration

Service: www.migri.fi

WORK PERMITS

Employment of a foreign national in Finland requires a residence permit,

which is applied for before arriving in Finland from a Finnish mission abroad.

Private entrepreneurship or the exercise of a profession in Finland requires a

separate residence permit intended for entrepreneurs. Residence permits for

employees or entrepreneurs are not required for citizens of EU-member states

or citizens of Iceland, Liechtenstein, Norway and Switzerland.

For EU and EEA citizens. EU citizens and citizens of Iceland, Liechtenstein,

Norway and Switzerland can freely work in Finland if the work lasts for a

maximum of three months. After that, they must register their right to

reside in Finland, but they do not need a special residence permit.

For Non-EU citizens. Foreign employees who are non-EU citizens and equiva-

lent persons need a residence permit for an employed person if they intend

to work in Finland. An alien who has entered the country either with a visa

or visa-free is not allowed to engage in remunerated employment in Finland

but, rather, has to apply for a residence permit. A residence permit can

be granted on the basis of either temporary work or work of a continuous

nature.

In granting the permit, the needs of the labour market are taken into con-

sideration. The aim of the residence permit certifi cation is to support the

possibility of those who are on the employment market to gain employment.

Thus, the availability of work force is also supported.

Granting a residence permit for an employed person requires that the alien’s

means of support be guaranteed. The employment offi ce will estimate both

the labour political requirements and the suffi ciency of the means of support.

More information in English at Enter-

prise Finland: www.enterprisefi nland.fi

• National Board of Patents and

Registration: www.prh.fi • Finnish

Immigration Service: www.migri.fi

Ministry of Foreign Affairs www.formin.fi


TaxationLegal Framework – Corporate Law

Finland has a civil law system where EC law is directly applicable and takes

precedence over national legislation. There are several important legal con-

siderations to take into account when establishing a business in Finland.

Foreign investment. There are no general restrictions on foreign invest-

ment, although authorisation is required in certain regulated sectors such

as banking. There are no exchange controls or currency regulations. Govern-

ment subsidies are available in certain areas and usually take the form of

start-up grants, subsidised loans, state-guaranteed fi nancing and freight

subsidies.

Directors’ liability. The managing director and members of the board and

supervisory board are liable to compensate the company or the shareholders

for damages caused deliberately or through negligence; and third parties for

any breaches of the articles or the Companies Act.

Parent company liability. A parent company is not generally liable for its

subsidiaries’ debts, unless it has provided a guarantee for those liabilities.

Reporting requirements. Companies must submit their annual accounts

to the Trade Register. Public companies must prepare and publish interim

reports at least four times a year. There must be statutory audit in Finland

of a Finnish branch offi ce, if the company’s annual accounts are not being

compiled, audited or made public in the manner corresponding to the cur-

rent EU rules.

Tax residency. Finnish or foreign individuals are treated as a Finnish resi-

dent if they either have their main abode and home in Finland or stay in

Finland for more than six consecutive months.

Patents are protected by registration with the National Board of Patents and

Registration. Protection generally lasts for 20 years.

Employer obligations. If a foreign company has a permanent establishment

for the purposes of income taxation, its role as an employer in Finland is no

diff erent from that of a domestic employer. Therefore the company should

become registered as an employer, withhold money from the wages paid out,

fi le monthly tax returns and annual employer payroll reports.

Employment regulations. The most relevant statutes regulating employ-

ment relationships in Finland are the Employment Contracts Act 2001 (ECA

2001) and Codetermination within Enterprises Act 1978 (CEA 1978). Other

generally relevant statutes applicable to most employment relationships are

the Working Hours Act 1996, Annual Leave Act 2005 and Safety at Work Act

2002. In general, all employers are subject to labour laws, irrespective of

their size and line of business. Finnish labour laws are generally applicable

to all employment relationships in Finland, including foreign employees

working in Finland and Finnish employees seconded to work abroad.

For businesses, normal taxes consist of a corporation tax (profi t tax) and

a real estate tax. 26 per cent corporation tax is paid on annual net profi ts.

Other taxes consist of an assets transfer tax (formerly stamp duty) and a

withholding tax. The employers are also required to make a social security

contribution.

Individuals have to pay a progressive income tax from their salaries. Foreign

personnel working in Finland for longer than a six-month period are also

required to do pay Finnish income tax. This guarantees that all residents

continue to receive top-level public health care, free schooling for children,

and other valuable public services. Private individuals’ income tax has come

closer to the European level in recent years in Finland.

CORPORATE INCOME TAX

Corporation tax is an income tax collected from limited companies and other

corporations. The tax is levied of the taxable income of a corporation. The

taxable income of a corporation is calculated by subtracting the deductible

expenses of the corporation from its taxable income.

Examples of tax rates in FinlandTax Sub classes Tax rate

Corporate income tax 26%

Value added tax (VAT) • Standard 22%

• Foodstuffs and animal feed 17%

• Books, medicines, admissions to commercial sporting facilities, sporting events, cultural and entertainment events 8%

• Newspapers and periodicals 0%

Transfer tax, securities 1.6%

Excise tax Varies, usually not a percentage

VALUE ADDED TAX (VAT)

VAT is an indirect tax assessed as a percentage of the value of all goods and

services, unless specifi cally exempted. It is a consumption tax paid by the

end consumer. VAT-registered businesses can deduct VAT paid on purchases

for business activities from their VAT liability. The Finnish acronym for VAT

is ALV. In 2009 the standard VAT is 22%.

More information in English at the

Finnish Tax Administration: www.tax.fi

• National Board of Patents and

Registration: www.prh.fi

The current 26% corpo-ration tax is among the lowest in Europe. It is paid on annual net profi ts.

Text: Peter Jaspers, Attorney at Law,

BJL Bergmann Attorneys at Law


TRANSFER TAX

Transfer tax is payable on the transfer of the ownership of securities, and

it is paid on the purchase price. There are two separate transfers when

exchanging securities and both transferees should pay the tax relating to

the received acquisition.

EXCISE TAX

Excise duty is levied to provide for general government fi nances. The col-

lection of excise duty can also contribute to health and social aff airs, the

environment, energy, transportation, or economic policy. Excise duty is

levied on all products that are subject to it, whether domestically produced,

imported from a member state of the European Community, or imported

from a country outside the Community’s tax territory. Excise duty is levied

on alcohol and alcoholic beverages, tobacco products, liquid fuels, electricity

and certain fuels, and soft drinks. Waste tax and oil waste duty are also

comparable to excise duty.

Excise taxation is implemented and controlled by the Finnish Customs.

TAX LIABILITY AND TAXES

Taxes in Finland are levied by the central government, local municipalities

and the church.

For business entities, normal taxes consist of a corporation tax (profi t tax)

and a real estate tax, and for individual persons, an earned income tax.

Other taxes consist of Assets Transfer Tax (former Stamp Duty) and with-

holding tax, and for individuals, inheritance and net wealth tax.

The 22% value-added tax (VAT) is levied on all transactions, with a few excep-

tions such as food and animal fodder (17%), books, medicines, accommoda-

tion, transport of persons, cultural events etc. (8%), and banking, health

and educational services (tax-free). Excise taxes are levied on tobacco and

alcohol, among other things.

There is also a special motor vehicle tax and an environmental tax on energy

consumption and certain waste materials.

The Assets Transfer Tax of 1.6% is levied on privately traded shares (0.8% if

through the stock exchange). A preliminary tax on an employee’s income is

deducted and paid monthly by the employer, who also pays social security

and other compulsory premiums. This deduction covers the national income

tax (progressive, from 7.5–60% per annum), the municipal income tax (e.g.

in Helsinki 17,5%), and the church tax (a fl at rate from 1–1.98%, depending on

the municipality. The church tax can be waived in cases where the employee

is not a member of the Evangelical-Lutheran or Orthodox churches).

INCOME TAX FOR EXPATS

If a foreign person works in Finland for less than six months, withholding

tax of 35% is paid. However, if the employer is a foreign company without a

permanent offi ce in Finland and the salary is paid through a bank, taxes are

paid in the home country, not in Finland. Key foreign personnel, even if in

Finland for longer than six months but not longer than 24 months, also pay

the 35% income tax, when their monthly salary exceeds EUR 5882.

More information in English at: www.vero.fi • www.enterprisefi nland.fi


Baltic Sea Region

The Baltic Sea region comprises of (?) Finland, Denmark, Sweden, Norway,

Estonia, Latvia, Lithuania, Germany, Poland, and Russia. The region

exceeds European standards in many indicators and seeks to be a role model

for Europe in achieving sustainable growth based on equality, innovation,

mobility and integration. The principal metropolises cooperate in many

spheres of society, tied together by the sea that connects them.

The countries in the Baltic Sea region cover an area of 2.4 million km2, which accounts for nearly half of the EU.

STRATEGIC LOCATION

Finland is centrally placed to serve a market area of 80 million people in

Northern Europe. This includes the Nordic and Baltic countries, as well

as Russia. St Petersburg is just an hour’s fl ight from Helsinki. Helsinki

also has regular air, sea and rail connections to the other major cities of

Stockholm, Tallinn and Riga. Most of the transit trade between the EU and

Russia already goes via Finland. Many Finnish companies have extensive

experience of project management and implementation in the Baltic coun-

tries and Russia.

Finland also offers the fastest and the most congestion-free transport channel from Europe to Russia, China, Korea and Japan through the Helsinki-Vantaa international airport.

Sweden Finland

Russia

Estonia

Latvia

Lithuania

Norway

Denmark

Germany Poland

Map of region

1,320,220

1,860,000

1,822,000

521,000

Helsinki*

Stockholm

Copenhagen

Tallinn

Population in the capitals of Baltic Sea Region

Sources: Statistics Finland, AP Home pages, Local transport companies* Greater Helsinki

Size of the workforce in the capitals of Baltic Sea Region

Sources: Statistics Finland 2006, Statistics Sweden, Statistics Denmark, Statistics Estonia, OECD* Greater Helsinki

688,684

989,700

858,000

214,000

Helsinki*

Stockholm

Copenhagen

Tallinn

57

90 83

8 0

20

40

60

80

100

2002 2003 2004 2005 2006

Source: Statistics Finland, Eurostat* Greater Helsinki

GDP (€ billion) of Helsinki, Stockholm,Copenhagen and Tallinn

Helsinki*

Stockholm Copenhagen

Tallinn

43,903 47,100 48,950

16,825

0

10,000

20,000

30,000

40,000

50,000

60,000

2002 2003 2004 2005 2006

Helsinki*

Stockholm Copenhagen

Tallinn

Source: Statistics Finland, Eurostat* Greater Helsinki

GDP per capita (€ million) of Helsinki, Stockholm, Copenhagen and Tallinn

PPS* in Baltic Sea region countries

Source: Eurostat* Purchasing Power standard: The purchasing power standard (PPS) is the name given by Eurostat to the artifi cial currency unit in which the PPPs and real fi nal expenditures for the EU 25 are expressed – namely, euros based on the EU 25.

260,663

157,946

142,936

20,746

Finland

Denmark

Sweden

Estonia

PPS* in Baltic Sea region capitals

Source: Eurostat* Purchasing Power standard: The purchasing power standard (PPS) is the name given by Eurostat to the artifi cial currency unit in which the PPPs and real fi nal expenditures for the EU 25 are expressed – namely, euros based on the EU 25.

50,646

74,619

59,894

12,669

Helsinki

Stockholm

Copenhagen

Tallinn

Investment Guide Book42

LANGUAGE SKILLS

Finland is a bilingual country; its two offi cial languages are Finnish and

Swedish. Foreign languages are studied from the age of 9 and every student

studies at least two languages by the age of 16.

82%

65%

33%

11%

6%

6%

English

Swedish

German

French

Russian

Spanish

Languages spoken by Finnish workforce (18–64 years)

Source: Statistics Finland 2006

PRODUCTIVITY

The productivity of Finland has grown year by year since 1995. The growth

has been signifi cantly faster than Europe’s on average.

0%

5%

10%

15%

20%

25%

30%

35%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Source: OECD

Cumulative productivity growth in some Nordic countries andEU 1995–2007

Finland

Denmark

Sweden

EU15

EU19

Finland

Metals and metal products,electronics,machinery and scientifi c instruments,shipbuilding,pulp and paper,foodstuffs,chemicals,textiles, clothing

Helsinki

Information technology,shipbuilding,specialised business expert services,fi nancing and insurance,the media,pharmaceuticals and hospital technology

Sweden

Iron and steel,precision equipment (bearings,radio and telephone parts,armaments),wood pulp and paper products,processed foods,motor vehicles

Stockholm

IT,computer manufacturing,research and development

Denmark

Iron, steel, nonferrous metals,chemicals,food processing,machinery and transportationequipment,textiles and clothing,electronics,construction,furniture and other wood products,shipbuilding and refurbishment,windmills,pharmaceuticals, medical equipment

Copenhagen

Food,hotel,IT and telecom sectors,life sciences (i.e. pharmaceutical andbiotechnology cluster)

Estonia

Engineering,electronics,wood and wood products,textiles;information technology,telecommunications

Tallinn

Transit trade,Food processing,textile production,engineering and electronics

Source: CIA The World Factbook, Eurostat Urban Audit

Main Industries

1. Helsinki2. Espoo3. Vantaa4. Kauniainen5. Hyvinkää6. Järvenpää7. Kerava8. Kirkkonummi9. Mäntsälä10. Nurmijärvi11. Pornainen12. Sipoo13. Tuusula14. Vihti


Greater HelsinkiWelcome to Helsinki

Greater Helsinki, comprising of the cities of Helsinki, Espoo, Vantaa, Kau-

niainen and 10 surrounding municipalities, is the commercial, political

and cultural center of Finland. Moreover, we are at the heart of the Baltic

Sea Region, which is a rapidly developing market of more than a hundred

million people. Greater Helsinki is also at the geographical and cultural

crossroads between East and West. We have a long history of doing business

in Russia and we are becoming an important business hub between Europe

and Asia.

Over a third of the Greater Helsinki inhabitants have a higher-level educa-

tion – a remarkable fi gure – meanwhile, Finnish students are consistently

ranked amongst the smartest on the planet. In addition, we have the work

ethics and trans-sectoral skills needed to succeed in knowledge-intensive

businesses in a global economy. Supported by an unmatched, modern infra-

structure, it’s no wonder Finns are constantly ranked as one of the world’s

most productive workforces.

Greater Helsinki off ers a very high standard of living and welfare. According

to most quality of life indicators, Finland and its capital region are amongst

the best places in the world to live. It is a green place – both in terms of

its natural public spaces as well as our attitude toward the environment.

Finnish society is also very stable, allowing our people and businesses the

opportunity to fl ourish and bloom.

We would like to invite you to discover more of Greater Helsinki in person

and we believe it will be worth your while.

Greater Helsinki consists of the cities of Helsinki, Espoo, Vantaa and Kauniai nen

as well as surrounding municipalities represented by the Uusimaa Regional

Council. In addition to urban areas, Greater Helsinki still has many small

towns, villages, sparsely settled rural areas, national parks and lots of islands.

Someone once said that all Finland has are trees and brains. Helsinki has

plenty of trees and plenty of brains, but most important is where they are

located. Helsinki is strategically located at the heart of the Baltic Sea region,

surrounded by fast growing markets, with fast access to the EU and easy air

access beyond Europe far to the East and West. Greater Helsinki accounts for

around 35 per cent of the national GDP and is the driving force behind the

competitiveness of the Finnish economy.

The companies that established business in Greater Helsinki during 2004–2005 are happier with their city than their counterparts in other European cities. (ECER Banque Populaire Ranking study. Nearly 2,400 European entrepreneurs from 37 European cities answered the study.)

1. Helsinki2. Espoo3. Vantaa4. Kauniainen5. Hyvinkää6. Järvenpää7. Kerava8. Kirkkonummi9. Mäntsälä10. Nurmijärvi11. Pornainen12. Sipoo13. Tuusula14. Vihti

Helsinki is one of the leading regions by the Regional European Competitive-

ness Index, scoring second after Brussels. The metropolitan area has also

seen an increasing amount of Foreign Direct Investment (FDI). Especially

companies operating in the electronics and software sectors have been inter-

ested in investing in the Uusimaa region (Helsinki and surrounding areas).

DRIVING FORCE OF THE FINNISH ECONOMY

Helsinki can be called the driving force of Finland’s economy: The gross

domestic product of Helsinki is 34% of the whole country’s GDP (Helsinki 57

billion €, Finland 167 billion € in 2006). GDP per capita is 38% higher than

that of Finland (31,700 € in 2006). The PPS (Purchasing Power standard) of

Helsinki is 50,646, and of Finland 260,663 € (Eurostat 2007).

Source: Statistics Finland* Greater Helsinki

GDP (€ billion), Helsinki*

57

48

50

52

54

56

58

2002 2003 2004 2005 2006


GDP per capita (€), Helsinki*

43,903

38,000

40,000

42,000

44,000

46,000

2002 2003 2004 2005 2006

Jussi Pajunen (Mayor of Helsinki)

Marketta Kokkonen (Mayor of Espoo)

Juhani Paajanen (Mayor of Vantaa)

Torsten Widén (Mayor of Kauniainen)

Ossi Savolainen (Regional Mayor,

Uusimaa Regional Council)


Helsinki EcosystemsHelsinki ranks on top when European regions are put in order by their com-

petitiveness. Despite its size, Helsinki off ers a vibrant and effi cient business

environment.

PHILIPS INNOHUB

Philips Applied Technologies founded

its fi rst InnoHub in Singapore in 2004.

The second InnoHub started operating

in the Helsinki area in fall 2008.

It was founded in cooperation with

VTT Technical Research Centre of

Finland and Well Life Centre in Espoo.

The objectives of the newest InnoHub

are to generate breakthrough innova-

tions for products and services in

the fi eld of well-being, healthcare and

life-style. The focus will be on the

clients in the Nordic and Baltic

countries.

The function of InnoHub is to help

companies transform their business

ideas to practice. InnoHub is a service

desk where ideas are turned from

technical concepts into a specifi c

plan and further tested in an open

innovation environment in a real-life

setting. End-users are involved in

the development process from the

beginning of the project, together

with product developers and business

partners. Companies can benefi t from

InnoHub and its services by becoming

a member or through ad-hoc projects.

The Regional Competitiveness Index

Rank RegionRegional Competitiveness

Index Score

1 Brussels 193.5

2 Helsinki* 188.3

3 ÎIe de France 185.2

4 Stockholm 177.8

5 Luxembourg 165.9

6 Prague 165.7

7 Hamburg 163.5

8 London 162.6

9 Bratislavský kraj. 159.6

10 Bremen 155.8

Source: Rober Huggins assosiates: European Competitiveness Index 2006-2007* Uusimaa

The public and private sectors in Helsinki are working together to create

unique systems of cooperative businesses, also called ecosystems. These

clusters in specifi c industries allow a great deal of synergy and productivity

that would not be possible working alone. The source of business success

has expanded from tangible products to technology and knowledge intensive

businesses. Information technology, life sciences, logistics and environ-

mental industries are some of the most developed in the world.

KEY ECOSYSTEMS

The following ecosystems are defi ned as the key ecosystems in Helsinki.

• Cleantech

• ICT

• Life sciences

• Design & Creativity

• KIBs

• Logistics

• Leisure

• Wholesale & Retail

• Construction & Real estate

Key fi gures on the ecosystems, Helsinki*Number of

enterprises** EmploymentRevenue

(1,000 EUR)Gross value added

(1,000 EUR)

ICT 10,243 79,020 43,159,887 8,694,339

Logistics 5,617 53,936 11,645,869 4,096,362

KIBS 12,203 75,600 11,275,052 5,668,528

Design & creativity

6,096 29,728 4,843,474 2,173,836

Life sciences 5,469 19,697 3,492,745 1,354,976

Clean tech 344 2,253 945,833 165,289

Source: Statistics Finland 2007* Greater Helsinki** That have at least one establishment operating in the ecosystem and in the area

DEMOGRAPHY OF BUSINESS

The total number of companies that have at least one establishment in Hel-

sinki is 71,234. 2.8% of them are foreign affi liates. The companies operating

in Helsinki with at least one establishment in the region, employ 458,089

persons in total.

Key fi gures on the ecosystems, Helsinki*Number of

enterprises**Employment Revenue

(1,000 EUR)Gross value added

(1,000 EUR)

ICT 10,243 79,020 43,159,887 8,694,339

Logistics 5,617 53,936 11,645,869 4,096,362

KIBS 12,203 75,600 11,275,052 5,668,528

Design & creativity

6,096 29,728 4,843,474 2,173,836

Life sciences 5,469 19,697 3,492,745 1,354,976

Clean tech 344 2,253 945,833 165,289

Source: Statistics Finland 2007* Greater Helsinki** That have at least one establishment operating in the ecosystem and in the area

Main economic indicators, Finland2005 2006 2007 2008* 2009* 2010*

GDP (change, %) 2.8 4.9 4.5 2.1 -0.5 0.7

Industrial producion (change, %) 3.9 9.1 5.2 3.9 3.1

Imports of goods and services (change, %)

9.6 7.8 6.6 0.4 -2.1 2.6

Exports of goods and services (change, %)

6.1 11.8 8.2 3.9 -3.3 1.0

Private consumption (% change) 3.8 4.1 3.2 3.1 0.7 1.9

General government consumption (change, %)

1.9 0.6 1.3 1.3 1.9 1.6

Current account (% of GDP) 4.9 4.6 4.1 3.8 2.5 0.7

Consumer prices, average (change %), EU harmonized

0.9 1.6 2.5 4.1 1.8 1.7

Unemployment rate (%) 8.4 7.7 6.9 6.3 7.2 7.7

Sources: Statistics Finland, Ministry of Finance, Bank of Finland 12/2008* forecast


INTERNATIONAL BUSINESS ENVIRONMENT

Number of enterprises with at least one establishment in Helsinki*

Source: Statistics Finland 2007* Greater Helsinki

65,751

4,354

905

224

Micro

Small

Medium

Large

Micro <10 persons Small 10-49 persons Medium 50-249 persons Large 250< persons


Development in the turnover and number of foreign affi liates* with at least one establishment in Helsinki**

Source: Statistics Finland

*A company resident in the compiling country over which an institutional unit not resident in the compiling country has control, or an enterprise not resident in the compiling country over which an institutional unit resident in the compiling country has control ** Greater Helsinki

Number of foreign affiliates

Revenue of foreign affiliates ( )

0

500

1,000

1,500

2,000

2,500

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

2004 2005 2006 2007

Revenue

Number of foreign affiliates

2.8% of the companies in Helsinki are foreign affi liates.

OTANIEMI MICROCLUSTERS (OMC)

The Otaniemi Microclusters (OMC)

project promotes business-driven

research and research-driven busi-

ness in Otaniemi, Espoo. The OMC

project’s objective is to identify

world-class research and international

anchor companies. The Otaniemi

Microclusters project has joined

forces with both public and private

organizations with a mission to create

world class microclusters in Otaniemi

that generate lively technological

ecosystems These microclusters

generate world class innovations and

fast growing hitech companies as well

as value adding hi-tech jobs, attract

global technology actors and VC

money to Otaniemi, and offer open

innovation platform to anchors and

academia.

The liaison formed between the public

and private players makes an attrac-

tive space for high-growth business

start-ups, forming a benefi cial micro-

cluster for all three. The outcome of

the concentration of professionals and

open innovation will be an increased

quality in research and business.

There are four ongoing and upcoming

cluster programs: Nanosurface@

Otaniemi, Mobility@Otaniemi,

Microsystems@Otaniemi, and

Energy@Otaniemi.

More information in English on Otaniemi

Microclusters: www.omc.otaniemi.fi

Number of foreign affi liates* with at least oneestablishment in Helsinki**

Source: Statistics Finland*A company resident in the compiling country over which an institutional unit not residentin the compiling country has control, or an enterprise not resident in the compiling countryover which an institutional unit resident in the compiling country has control** Greater Helsinki

1,011

620

280

70

Micro

Small

Medium

Large


451

340 213

199 122

91 82

76 73

63

Sweden

United States United Kingdom

Germany Denmark

France Norway

Netherlands

Japan

Switzerland

Number of foreign affi liates* with at least one establishment in Helsinki** by country of origin (TOP 10)

Source: Statistics Finland*A company resident in the compiling country over which an institutional unit not resident in the compiling country has control, or an enterprise not resident in the compiling country over which an institutional unit resident in the compiling country has control** Greater Helsinki

Development of revenues and number of enterpriseswith at least one establishment in Helsinki*

54,000 56,000 58,000 60,000 62,000 64,000 66,000 68,000 70,000 72,000 74,000

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

2004 2005 2006 2007

Number of enterprises

Revenue ( )

Revenue Number of enterprises



Helsinki infrastructure

Fortune Global 500 companies in Finland (TOP20; banks and insurance companies included)Rank Company Name in Finland

5 Toyota Motors Toyota Motor Finland Oy

9 General Motors General Motors Finland Oy

11 Daimler Daimler Finland Oy

13 Ford Motor Volvo Auto Oy

17 Citigroup Citibank

26 Deutche Bank Deutche Bank AG Helsinki Branch

35 AIG-American International Group AIG Europe S.A. (Finland)

37 Siemens NokiaSiemens Networks Oy

41 Hewlett-Packard Hewlett-Packard Oy

46 IBM Oy International Business Machines Ab

47 Gazprom Gasum Oy

48 Hitachi Hitachi Data Systems Oy

50 Nissan Motor Nissan Nordic Europe Oy

52 E.ON Fennovoima Oy

55 Deutche Post DHL Global Forwarding (Finland) Oy

57 Nestlè Suomen Nestle

73 BASF BASF Oy

75 Sony Sony Music Entertainment Finland Oy

78 BMW Oy BMW Suomi Ab

79 Procter & Gamble Procter&Gamble Finland

81 UnitedHealth Group Ingenix International (Finlan) Oy

82 Hyundai Motor Hyundai Motor Finland Oy

88 Nokia Nokia Oyj

89 ThyssenGroup Polarputki Oy

90 Lukoil Teboil Oy

92 Toshiba HM-Offi ce Oy

97 Suez Sita Finland Oy Ab

101 Robert Bosch BSH Kodinkoneet Oy

106 Dell Oy Dell Ab

107 Johnson&Johnson Janssen-Cilag Oy

Sources: ODIN, ORBIS, Fonecta

Many Fortune Global 500 companies have presence in Finland.

In recent years enormous investments have been made in Helsinki’s infra-

structure. Through recent undertakings ranging from the expansion of

the Helsinki-Vantaa Airport to the construction of a new cargo harbour and

extending its fi bre optic networks, Helsinki off ers one of the most eff ective

infrastructures in the world.

A WELL-DEVELOPED AND FUNCTIONING INFRASTRUCTURE

Getting around in the region is easy. The network of commuter trains,

metro, trams and buses take you fl exibly from the surrounding areas to

downtown Helsinki. There are many business parks in the metropolitan

area that off er great locating premises. The Aviapolis business park in Van-

taa is located a mere stone’s throw away from the Helsinki-Vantaa Airport

and business parks such as Technopolis in Espoo off er premises for those

seeking an environment catering from technology and innovation.

General infoMobile penetration over 100 percent; over 6.4 million subscribers in June 2008

Internet more than 75 percent of Finns use internet regularly or occasionally (Finland’s total population is 5.3 million); for those under the age of 40, the fi gure is 100 percent.

Broadband connections 1.923 million (at the end of June, 2008)

Railways 5,732 km, electrifi ed 2,617 km

Waterways 7,842 km, includes Saimaa Canal system of 3,577 km; southern part leased from Russia

Airports 76 spread around the country, two of them with runways over 3,000 m

Ports Helsinki, Hanko, Kotka, Turku, Hamina, Pori, Naantali, Rauma, Raahe, Porvoo

BUSINESS PARKS

There are several business districts in Helsinki. All of them provide the

companies with a good location and connections within the city and to

elsewhere in Finland.

Otaniemi mainly tempts technology companies. The business area is located

in the same neighborhood with the Helsinki University of Technology in

Espoo. New offi ce space is being developed in the area that will host the new

Aalto University opening its doors in 2010.

Other business districts in Espoo are for example Keilaniemi, Tapiola, Niit-

tykumpu and Matinkylä. Traffi c connections to these areas will be improved

when the westbound metro is completed by 2013.

The broadband penetration is at a high level: it is 76.8% in Helsinki and 69.2% in the whole country. (Statistics Finland, 2009)


Costs

Ruoholahti’s offi ce area has attracted companies from various fi elds, such as

IT/hi-tech and business consultancy companies. The area is in the vicinity

of the city centre. Other offi ce areas outside the city centre include Pasila,

Sörnäinen, Vallila and Lauttasaari.

Aviapolis is located in the immediate vicinity of the Helsinki-Vantaa inter-

national airport. The companies operating in the area currently employ

approximately 30,000 people. The development of Aviapolis continues: an

area of 400,000 square meters has already been zoned for the construction

of offi ce space. Traffi c connections will be improved by the opening of the

Ring Rail Road in 2014 that connects the airport area seamlessly with the

Helsinki city centre.

Business parksSome main business districts in Helsinki*

Aviapolis Otaniemi Ruoholahti

Number of companies 765 487 1,536

Distance to the city centre (km) 19 7 3

Distance to the airport (km) 0 23 20

Source: Statistics Finland (number of companies)* Greater Helsinki

COMMUTING TIMES

Less than half an hour is spent travelling from home to work in Helsinki.

Metro, commuter train, tram lines and bus networks provide the commut-

ers a quick and safe journey to their offi ces.

Average commuting timesAverage commuting times in Helsinki, Stockholm, Copenhagen and Tallinn

Helsinki Stockholm Copenhagen Tallinn

Average travel time from home to work (mins)

26 35 27 28

Average travel time from city center to airport by bus (mins)

35 50 27 21

Sources: Eurostat Urban Audit, Helsinki-Vantaa Airport, Flygbussarna, The Danish Travel Plan, Tallinn public transport schedules

More information in English on Helsinki City Transport: www.hkl.fi

Compared to many alternatives, Helsinki is a very cost-effi cient city for

running a business. A very wide array of high quality offi ce premises is

available at competitive cost. The total costs of employing highly educated

professionals in Helsinki are lower than in most other European locations.

SALARY COSTS AND CONTRIBUTIONS

Average yearly income of certain professionals*Occupation €

Production and operations manager (in business services enterprises) 74,016

Sales and marketing manager 66,756

Research and development manager 65,952

Electrical engineer 50,784

Chemist 47,208

Artistic specialist and commercial designer 26,424

Source: Statistics Finland* ISCO-88 Classifi cations

RentsCity Central Business District rents

Class A Gross Rent* (USD)Suburban / Out-of-town rents

Class A Gross Rent* (USD)

Helsinki 40.87 20.43

Stockholm 57.44 28.72

Copenhagen 33.45 19.37

Oslo 38.18 24.36

Tallinn 29.87 18.55

Riga 37.72 25.15

Vilnius 27.51 22.95

St. Petersburg 71.28 46.93

Warsaw 59.45 36.44

Hamburg 42.44 26.72

Source: Colliers International / Global Offi ce Real Estate Review 2009* The average rent quoted per square foot per annum for a class A offi ce building withing the CBD plus additional costs such as property taxes, service charges or or operating expenses

ContributionsContribution Rate

Employer’s social security contribution General I Class 2.771%

II Class 4.971%

III Class 5.871%

Group life assurance (obligatory) Varies between insurance offi ces

Accident insurance payment 0.3–7.5%

TYEL-pension insurance premium Over 20% of wages (average 21.8%)

Unemployment insurance premium 1–4%

Sources: Vero.fi , Suomen Yrittäjät

Traffi c connection from the city centre to the Helsinki-Vantaa airport will become even faster once the Ring Rail Road starts operating in 2014.

HELSINKI CITY TRANSPORT

Helsinki’s public transport was ranked

the second best in Europe in the 2008

BEST (Benchmarking in European

Service of Transport) study. The most

valued aspects of public transporta-

tion to citizens were its environmen-

tally friendly values and its social

signifi cance. The number of bus and

train stops in the transportation

network in the city centre was consid-

ered important. Travellers thought that

the Helsinki City Transport provides a

safe way to travel.

Helsinki City Transport participates in

many research and development

projects, which aim at fi nding more

environmentally friendly public trans-

portation. The bio-diesel project has

an objective to reduce emissions and

greenhouse gases. Another project

has a goal of minimizing the use of

energy by taking buses using hybrid

energy into use. Helsinki City Trans-

port will be testing hybrid buses in the

near future together with traffi c opera-

tors. The metro and local trains form

the base of the public transport in the

metropolitan area, and in the future

they will be further developed. There

are numerous extension plans for the

rail traffi c, for both the tram routes and

the metro, which will be extended to

Espoo, while different rail options are

planned for quick access to the

Helsinki-Vantaa International Airport.


Helsinki workforce

Employer’s social security contributions. The contribution is payable by the

employer every month. It is determined according to the monthly amount of

paid wages. If a foreign company is permanently established in Finland, it

is always obliged to pay this contribution.

Group life assurance (obligatory). The rate varies between insurance offi ces.

Accident insurance payment. Employers should take out accident insurance

for their employees from an insurance company.

TYEL-pension insurance premium. Employers are obliged to take out pension

insurance for their employees. It is taken from a Finnish pension insurance

company. The premium includes the employee’s share, which the employer

must withhold on every payday.

Unemployment insurance premium. The premium is withheld and collected

from wages, and it is payable to the same insurance company as the accident

insurance payment. The employee’s share of the premium is withheld by the

employer.

For more information in English, the Finnish Tax Administration at: www.vero.fi

OCCUPANCY COSTS

In addition to being an aff ordable place to open business, Helsinki’s compact

size and effi cient traffi c solutions off er companies an opportunity to save

money in transportation costs. Reliable high-speed communications serv-

ices are available for businesses at aff ordable prices everywhere in Helsinki.

Based on industrial end-users consuming 2 GWh per year and excluding

VAT, the average price of 100 kWh of electricity was € 9.18 in the EU in 2007.

Electricity prices ranged from € 4.43 in Latvia to € 13.87 in Italy. Prices were

relatively low in the Baltic States as well as in Bulgaria, Finland, France and

Poland (less than € 6.00 per 100 kWh). (Eurostat)

Electricity prices (EUR/100 kWh; including taxes)Household Industry

Finland 11.60 6.89

Sweden 17.14 6.31

Denmark 25.79 10.74

Estonia 7.50 6.30

Source: Eurostat / Europe in fi gures - Eurostat yearbook 2008

The Finns are known as a hard-working people, and Helsinki is consistently

in the Top 10 for productivity in Europe. Education and training are strongly

emphasised in Finland, and the investment pays off : Finnish professionals

are well educated and boast excellent language profi ciency. English as

a business language causes no problems for Finnish workers as they are

required to take English at all levels of their studies. The availability of

a highly educated workforce in knowledge intensive business areas is high.

The labour costs are relatively low compared to many other Western

countries.

LEVEL OF EDUCATION

Finland is well known for its excellence in education: Finnish students have

repeatedly ranked fi st in OECD’s PISA study. The compulsory education con-

tinues until the age of 16 and after that most continue to vocational schools

and high schools, and further on to higher education in universities and

universities of applied sciences.

35%

39%

36%

33%

Finland

Sweden

Denmark

Estonia

Share of adults with tertiary education(bachelor or higher)

Source: Education at Glance 2008 / OECD Indicators

Helsinki off ers a diversely skilled, highly educated and cost-eff ective work-

force. Finland has made the development of a competent, multilingual, and

motivated workforce a national priority. The workforce is generally highly

computer literate and profi cient in several languages.

The education system is ranked high in international competitiveness

reports and it meets the needs of a competitive economy e.g. with a high

number of qualifi ed engineers and other professionals with university

degrees in various fi elds. Vocational education has also witnessed a major

transformation in recent years, enhancing the skills and qualifi cations of

young people entering the labour market.

The number of engineers in Helsinki is high: about 30,000 in a total population of 1.3 million. There are fi ve schools that offer both bachelor and higher level education in engineering. (Statistics Finland)

Sources: Statistics Finland 2006* Uusimaa

Nature of educational background in Helsinki*

Secondaryeducaton

41 %

UpperSecondary

education 21 %

Bachelor’sdegree16 %

Master 20 %

Doctor 2 %


Private sector68 %

Universitysector17 %

Publicsector15 %

Source: Statistics Finland 2006* Uusimaa

R&D expenditure in Helsinki* by sector

The Finnish higher education system consists of two parallel sectors:

polytechnics and universities. Universities are characterized by scientifi c

research and higher education based on it. There are altogether 20 universi-

ties in Finland. Polytechnics are working life oriented and operate on the

basis of higher expertise requirements set by working life.

UNIVERSITIES AND UNIVERSITIES OF APPLIED SCIENCES

There are 17 universities and universities of applied sciences in Helsinki.

Universities and universities of applied sciences in Helsinki*Universities Universities of applied sciences

Aalto / Helsinki School of Economics Arcada University of Applied Sciences

Aalto / Helsinki University of Technology Diaconia University of Applied Sciences

Aalto / University of Art and Design Helsinki Haaga-Helia University of Appliec Sciences

Academy of Fine Arts HAMK University of Applied Sciences

National Defense University Helsinki Metropolia University of Applied Sciences

Sibelius Academy HUMAK University of Applied Sciences

HANKEN – Swedish School of Economy andBusiness Administration

Lahti University of Applied Sciences

Theatre Academy of Finland Laurea University of Applied Sciences

University of Helsinki

Source: Hera (Helsinki Education and Research Area)* Greater Helsinki

Post-graduate students and doctorate students in the universities of Helsinki

Source: Kota Online 2007

5,406

2,519

336

203

162

130

2,203

814

146

90

70

37

University of Helsinki

Aalto / Helsinki University of Technology

Aalto / Helsinki School of Economics

Aalto / University of Art and Design

Swedish School of Economics and Administration

Sibelius Academy Post-graduate students

Doctorate students

EMPLOYMENT

The key ecosystems employ 260,235 persons in Helsinki. The size of the total

workforce (16-64 years old) is 921,000 persons. (Statistics Finland)

A new university – Aalto University – will begin its work in 2010 when the Helsinki University of Technology, Helsinki School of Economics and the University of Art and Design are combined.

Employment by occupation, Helsinki*Occupation Employment

Corporate managers 78,100

Physical, mathematical and engineering science professionals 61,200

Architects and engineering science professionals 28,000

Sales and marketing managers 25,500

Business professionals 19,700

Production and operations managers 14,000

Electronics and telecommunications engineers 7,700

Legal professionals 7,700

Artistic, entertainment and sports associate professionals 7,300

Mechanical engineers 4,700

Research and development managers 4,700

Electrical engineers 4,200

Physicists, chemists and related professionals 2,600

Source: Statistics Finland 2008* Greater Helsinki

43,1

45,9

43

45,4

41,8

Finland

Sweden

Denmark

EU15

EU19

GDP per hour worked (at current prices, US dollars)

Source: OECD 2007

82.2%

87.6%

82%

86.6%

79.8%

Finland

Sweden

Denmark

EU15

EU19

GDP per hour worked as percentage of USA*

Source: OECD 2007* USA = 100

R&D EXPENDITURE

A total of EUR 2399,73 million was spent on R&D in Helsinki in 2006 (EUR

5761,19 million in Finland in total). The amount was divided between pub-

lic, private and university sectors.

The Finns are productive despite strong trade unions, short working days and long holidays.

Employment by ecosystem, Helsinki*

Ecosystem Employment

ICT 79,020

KIBS** 75,600

Logistics 53,936

Design & creativity

29,728

Life sciences 19,697

Clean tech 2,253

Source: Statistics Finland 2007* Greater Helsinki** Knowledge intensive business services

CAREER SERVICES FOR

INTERNATIONAL STUDENTS

The KVOTA project develops trainee-

ship possibilities for international

degree students in Finland. It is a

cooperation project between the

career and recruitment services in

higher education institutions, cities

and companies in Greater Helsinki.

KVOTA is a part of the Helsinki Educa-

tion and Research Area (HERA) project

that develops the international activi-

ties of higher education institutions.

During the summer of 2008, the

KVOTA project approached over one

hundred companies by phone. Half of

the companies had a positive attitude

towards the idea of hiring an interna-

tional student as a trainee. KVOTA was

a pilot project that initiated marketing

international students to employers. It

is followed by the VALOA project that,

like KVOTA, concentrates on promot-

ing international students to employers

and seeking and securing traineeship

opportunities for them.

More information on career services

for international students: www.hera.fi


Quality of life

Helsinki off ers a very high standard of living and welfare. According to

most quality of life indicators, Finland and Helsinki are among the best

places in the world to live. Helsinki is a green city both in terms of its

natural pubic spaces as well as our attitude toward the environment.

Finnish society is also very stable, allowing out people and businesses

the opportunity to fl ourish and bloom. You will enjoy living in multilingual

Helsinki, if you feel the same about life as the Finns.

Helsinki is a compact, yet spacious metropolis, and surrounded by the sea.

Downtown Helsinki is easy to explore on foot or by tram and bus. The entire

metropolis is served by a superb mass transit network, by bus, commuter

train and metro, with plenty of park and ride facilities if you live further

out. Europe’s largest underground bus terminal serves over 150,000 com-

muters a day, with covered walkways connecting the downtown area. Snow

or shine, you are connected. Our winter is a fact of life, but the infrastruc-

ture is designed for it.

FAST JOURNEYS TO WORK

Modern working life in Helsinki is easier compared to the larger metropo-

lises of the world. For example, the average journey to work in Helsinki is 6.2

km (3.9 miles), which takes up to 30 minutes during rush hour. In Central

London the average journey to work is 14 km (8.7 miles), which can take up

to an hour, and sometimes considerably more.

In downtown Helsinki, the journey to work is most often done by tram.

There are 11 main tram routes in Helsinki and in 2004 over 56 million jour-

neys were made by tram.

The Metro is another quick and safe way to travel. The journey time between

stations is one to two minutes. The peak-hour train frequency is app-

roximately 4 minutes and off -peak 5 minutes. A single ticket costs €2–2.20

($3–$3.40) and is valid for 60 minutes from the moment of purchase, however

most frequent travellers have travel cards. There are an estimated 700,000

of them in daily use.

Currently Greater Helsinki is gearing up for major expansions to its metro,

commuter rail, tram and bus networks. A western metro line extension is

already set to go ahead and should be up and running in 2012, by which time

the whole metro system is scheduled to be fully automated with driverless

cars enabling shorter time-intervals in between trains. There are also plans

to establish new peripheral east-west commuter train and bus lines. Exten-

sions to the tram network are also underway.

Helsinki leaves other locations green with envy.

The general consensus is for further development of the public transporta-

tion system, but according to studies other means to lower the use of private

cars may be needed in the future as passenger cars still account for 85 per

cent of all transport nationwide.

At the moment Helsinki has a wide network of Park and Ride parking areas

near stations, terminals and bus stops and some companies off er subsidised

travel passes to encourage their employees to use public transport.

All in all, one should bear in mind that the healthiest way to travel to work

is on foot or bicycle. In the summer you can even borrow a “Citybike” for a 2

euro (3 USD) deposit.

FREE EDUCATION

In Helsinki there are 9 universities and 10 universities of applied sciences,

with more than 60,000 students, a growing proportion from abroad. Many

further education courses are taught in English, and there are international

schools for primary and secondary education.

Facilities for student work and play match any European capital and chal-

lenging local careers await for the creative and the innovative, due to the

close cooperation between academia and business. Helsinki has expanding

employment in a wide range of advanced and interconnected disciplines.

In Finnish universities an average bachelor’s degree will take three years to

complete and a master’s degree fi ve years.

Some of the most advanced doctoral research work is being conducted in the

key cluster areas of technology, business development and creativity, and

the synergy between them. But the breadth of advanced education covers

the full spectrum. There are over 6000 researchers in the specialized Hel-

sinki universities and universities of applied sciences.

AALTO UNIVERSITY

The most recent change in the fi eld of higher education in Helsinki is the

merging of the Helsinki School of Economics (HSE), the University of Art

and Design Helsinki (TaiK) and the Helsinki University of Technology (TKK)

into the Aalto University. This new top university will formally exist in time

for the autumn 2009 semester. It is hoped that by 2020 the merger will have

resulted in a world-class technological, commercial and design university,

with innovation at its heart.

In Finland, higher education is free also for international students whereas, for example, an international student of the University of London will pay approxi-mately €15,600 per year.


Helpful Organizations

There is plenty of student accommodation in Helsinki and the surrounding

municipalities. For a shared apartment, a student in Helsinki can expect

to pay c. €200–€300 ($300–$450) in rent per month, whereas in London the

average monthly rent is around €600 (over $900). The standard of accom-

modation in Helsinki is also much higher than in London.

Active student status also entitles the student to a 50 per cent discount on

travel in the capital area. Student discount in London is only 30 per cent. A

student who lives permanently in Helsinki will pay approximately 21 euros

(32 USD) per month for travel; other students have to pay approximately 40

euros (60 USD).

FINNISH DAYCARE ALMOST AS GOOD AS HOME

Most people would agree that nobody can look after a child like its own

parents. The good news is that, in Finland, the daycare system comes a very

close second to a child’s own parents. This helps improve the overall quality

of life for the whole family.

The daycare system is also a good way to prepare a child for school. As a Nor-

dic welfare state Finland is perfectly capable of guaranteeing this chance for

parents and their children. Finnish daycare facilities can off er their services

between 6.30 in the morning and 18.00 in the evening, excluding public

holidays and the summer holiday period. Foreign language daycare can be

found in Helsinki in the following languages: English, Spanish, French,

Swedish, German, and Russian.

FINLAND’S WORLD HERITAGES

One of the best things about being out and about in Helsinki is that, despite

its laid-back surface, one can dig a little bit deeper and fi nd some world-

class gems. Finland hosts seven UNESCO World Heritage sites: the fortress

of Sveaborg Sea Fortress, Old Rauma, the Petäjävesi old church, the Verla

groundwood and board mill and the archaeological site of Sammallahden-

mäki, the Struve geodetic arch and the Kvarken archipelago.

It’s easy to see that the Finns enjoy a close relationship with the sea. Fur-

ther activities include boat trips to Helsinki’s other main island attraction

Korkeasaari Zoo, and sightseeing tours abound. However, if you get lucky

and make friends with the locals who have second homes on the archipelago

lying off the coast then you’ll really be able to appreciate the Finnish holy

trinity of sauna, beer and sausages in its proper setting.

The International School of Helsinki is an IB World School authorized to offer International Baccalaureate programs to students aged 4 onwards in grades K1 to 12.

Helsinki is among the world’s cleanest, safest and most culture-oriented capitals.

Finland and Helsinki off er a top-

level business environment, excel-

lence in technology and, as the

business centre of Northern Europe,

the most cost-eff ective, direct

access to 80 million consumers.

If you are interested to learn more,

or need a guide through the process

of establishing a presence in

Finland, the following organiza-

tions can off er you direct help.

INVEST IN FINLAND

Invest in Finland is a national

expert service organization assist-

ing foreign companies in establish-

ing or expanding their business. It

is funded by the Ministry of Trade &

Industry. Whether it’s opening a

sales offi ce, mapping out merger

and acquisition targets, or setting

up a R&D/manufacturing unit, we

at IIF give you a head start on

achieving profi table growth. Give

us a call or just send an email and

let’s fi nd your next business

opportunity.

INVEST IN FINLAND

Kaivokatu 8, 6th fl oor

FI-00100 Helsinki, Finland

tel. +358 10 773 0300

fax. +358 10 773 0301

info@investinfi nland.fi

GREATER HELSINKI

PROMOTION (GHP)

Greater Helsinki Promotion Ltd

(GHP) is the international business

promotion agency for the Helsinki

area. GHP receives its funding from

public sources – from the cities of

Helsinki, Espoo, Vantaa and Kau-

niainen, as well as the Uusimaa

Regional Council. GHP is a service

agency for foreign companies that

are interested in locating in the

Helsinki region.

Each company needs to fi nd its own

business case and we are the local

neutral partner for your business

development team. We look forward

to hearing from you.

Visiting address:

Mechelininkatu 1 a, 00180 Helsinki

Tel: +358 9 562 6677

Fax: +358 9 562 6688

Email: [email protected]

FINPRO

Finpro is an association founded by

Finnish companies. The aim of

Finpro is to guarantee that Finnish

companies, especially SMEs, have

access to high quality, comprehen-

sive internationalization services

around the world.

During the last 90 years Finpro has

evolved into an international con-

sulting network that has been

instrumental in the internationali-

zation projects of thousands of

Finnish companies. Its main objec-

tive is to accelerate and promote the

internationalization of Finnish

companies and fi nd new markets

for them. Finpro off ers its client

organizations comprehensive sup-

port along the entire journey, and

both strategic and practical assist-

ance. Finpro encompasses over 330


professionals in more than 40 coun-

tries representing a unique,

dynamic partner for Finnish com-

panies and institutions.

Postal address: P.O. Box 358,

Visiting address: Porkkalankatu 1,

00181 Helsinki, Finland

Tel: +358 204 6951

Fax: +358 204 200

Email: info@fi npro.fi

TEKES

TEKES, the Finnish Funding

Agency for Technology and Innova-

tion, is the main public funding

and expert organization for

research and innovation in Fin-

land. Tekes funds innovative

research and development projects

in companies, universities and

research institutes, and especially

promotes innovative, risk-intensive

R&D projects. The focus areas of

Tekes strategy are wellbeing and

health, a knowledge society for all,

clean energy, management of

scarce resources, the built environ-

ment, intelligent systems and envi-

ronments, service business and

innovations, and interactive media.

TEKES

Postal address: P.O.Box 69

Visiting address: Kyllikinportti 2, FIN-

00101 Helsinki, Finland

Tel: +358-1060 55000

Fax: +358-9-694 9196

Email: [email protected]

FINCHI

FinChi is a non profi t organization,

based in Shanghai, dedicated to

supporting Finnish high-tech com-

panies in entering and expanding

in China. FinChi provides a wide

range of services, resources and

reliable offi ce solutions.

FinChi was established by the

Ministry of Trade and Industry of

Finland, together with Finpro and

Tekes. This unique innovation con-

cept is also fully supported by the

Shanghai Pudong government.

The strong local connections enable

FinChi to network high-tech compa-

nies and local Chinese enterprises.

The FinChi community fosters a cul-

ture of innovation, wealth creation

and lucrative business ventures. To

date, FinChi has served nearly 30

Finnish organizations ranging from

government agencies to research

institutes, from traditional paper

industry to venture capitalist.

FINCHI Innovation Center Co., Ltd.

Rm401-402, #2 BLDG

690 Bi Bo Road

Zhangjiang Hi-Tech Park

Shanghai 201203

Tel: +86 21 6104 2222

Fax: +86 21 6104 2200

E-mail: fi nchi@fi nchi.cn

芬华创新中心有限公司碧波路690号，2号楼，401-402室上海市张江高科技园区邮政编码：201203电话：+86 21 6104 2222传真：+86 21 6104 2200

FECC

The Finnish Environment Cluster

for China supports green opportu-

nities between the two countries.

FINNISH ENVIRONMENTAL CLUSTER

FOR CHINA/FECC

Cleantech Cluster Programme

Lahti Science and Business Park Ltd

Niemenkatu 73

FI-15140 Lahti, Finland

China

Yang Fenghui

Tel: +86 21 6104 2271

[email protected]

FINNODE

FinNode is your access node to

a global network of resources. We

are a business and technology

community designed to help North

American companies hook up with

partners in Finland and the U.S. –

whether you are looking for specifi c

IP, cutting-edge research, R&D

resources or even available talent

FINNODE

3945 Freedom Circle

Suite 110

Santa Clara, CA 95054

Tel: +1 408 748 7400

Email: jukka.salminiitty@fi nnode.com


www.investinfi nland.fi

Documents

Finland and Helsinki Fact Book · Information & Communication Technology (ICT), Cleantech, Renewable Energy, Health Care and the Pharmaceutical, Bio and Medical Industries, as well