Finland: Investing

FDI in Figures

Foreign direct investment (FDI) flows to Finland have been fluctuating in recent years, and stood at USD 9.4 billion in 2022 (compared to 13.8 billion one year earlier) according to the 2023 World Investment Report published by UNCTAD. In the same year, the total FDI stock amounted to USD 99.9 billion (+15.8% y-o-y), roughly 35.5% of the country’s GDP. 47% of new foreign investment in 2022 was directed to the Uusimaa region in southern Finland, which includes the capital Helsinki and other major cities like Hyvinkää and Espoo. Examined by country, net inward FDI stock is highest from Sweden (EUR 22.8 billion), the Netherlands (EUR 11.6 billion), Luxembourg (EUR 9.8 billion), and Norway (EUR 5.2 billion – data Finnish Investment Agency). In 2022, foreign owners' returns on direct investments in Finland reached a total of EUR 7.9 billion, with EUR 6.3 billion in dividends paid abroad and EUR 0.7 billion in interests. Reinvested earnings constituted EUR 0.9 billion. When analyzed by country, the majority of returns from Finland originated from investors in Sweden (EUR 3.8 billion), the Netherlands (EUR 1.4 billion), and Luxembourg (EUR 0.5 billion). The primary sectors contributing to returns from foreign owners were manufacturing, with EUR 3.6 billion, and financial and insurance activities, with EUR 1.5 billion (Statistics Finland). In terms of stock, inward FDI to Finland are mainly directed towards enterprises engaged in manufacturing, financial and insurance activities, information and communication, real estate, and wholesale and retail trade. According to the latest figures from the OECD, FDI inflows to Finland totalled USD 1.76 billion in the first half of 2023, compared to USD 1.48 billion in the same period one year earlier (+19.3%).

The country’s strengths include a highly educated workforce, a knowledge-based and innovative economy, a reputation for stability and lack of corruption, competitiveness, a strategic position at the centre of a dynamic zone formed by Russia, Scandinavia and the Baltic countries and its orientation towards high technology, research and development. In recent years, the country's government announced several tax incentives for foreign investors to conduct research and development activities in Finland. Among the country’s weak points are the small size of its market, a high vulnerability to the international situation, substantial labour costs and a high degree of dependence of the country’s banking sector on the Swedish and Danish financial sectors. Furthermore, significant amendments to the Monitoring of Foreign Corporate Acquisitions Law (172/2012) entered into force, widening the scope of acquisitions that are subject to mandatory pre-approval. Overall, Finland has a very friendly business environment, as shown by the fact that the country ranks 12th out of 82 countries in the Economist Business Environment ranking; as well as 11th out of 63 countries in the World Competitiveness Index published by the International Institute for Management Development (IMD). Furthermore, Finland ranks 6th among the 132 economies on the Global Innovation Index 2023 and 12th out of 184 countries on the 2023 Index of Economic Freedom.

What to consider if you invest in Finland

Protection of Foreign Investment

Procedures Relative to Foreign Investment

Freedom of Establishment

Foreigners can invest in Finland at the same conditions as citizens, except for sectors considered critical, such as energy, communications, defense or food supply.

Acquisition of Holdings

For defense acquisitions, all foreign investors must apply for prior approval. The same concept applies for investments in sensitive sectors of the economy (like energy, communications, food supply, etc.) from foreign investors domiciled outside the EU and European Free Trade Association area, with the Ministry of Economic Affairs and Employment having the power to stop the investment in case of conflict with “vital national interests”.

Obligation to Declare

The Ministry of Economic Affairs and Employment validates FDI and decides on the possibilities for a foreign investor to target a sector considered strategic by the Finnish state.

Competent Organisation For the Declaration

Ministry of Economic Affairs and Employment

Requests For Specific Authorisations

Certain acquisitions of large Finnish companies may require follow-up clearance from the Ministry of Employment and the Economy in accordance with the act on the control of foreign acquisitions of Finnish companies. The purpose of the clearance is to protect essential national interests.

Office Real Estate and Land Ownership

Possible Temporary Solutions

InstantOffices, CoWorker, Match Office.

The Possibility of Buying Land and Industrial and Commercial Buildings

Non-EU/ETA investor can buy residential housing and condominiums without restrictions; however, law HE 253/2018 requires non-EU/ETA foreign individuals or entities to receive Defense Ministry permission before buying land in Finland (even in the case of companies registered in Finland, but whose decision-making bodies are for at least of one-tenth of non-EU/ETA origin).

Risk of Expropriation

Private property rights are well protected in Finland. Private property is only expropriated for public purposes (eminent domain) in a non-discriminatory manner, with reasonable compensation, and in accordance with established principles of international law.

Investment Aid

Forms of Aid

Foreign investors can benefit from financing aids such as long-term low-interest loans. See the Investment Promotion Agency website for more information.

Privileged Domains

Support is given in the form of grants, loans, tax benefits, equity participation, guarantees, and employee training (such measures are generally offered to both local and foreign-owned companies).
For information about the business funding measures, consult the dedicated pages on Business Finland website.

Privileged Geographical Zones

For information about the business support measures for specific sectors (including food, health, smart energies, etc.), consult the dedicated pages on Business Finland website.

Free-trade zones

The Finnish government does not provide area-specific incentives at the moment.

Public aid and funding organisations

Loans are guaranteed by the state-owned financing company Finnvera. Funding for challenging and innovative projects potentially leading to global success stories is provided by Finnish Funding Agency for Technology and Innovation (Tekes).
Finland’s Centers for Economic Development, Transport, and the Environment (ELY) may also grant funding for investment and development projects. Further information on business funding is available on Business Finland's website.

Investment Opportunities

The Key Sectors of the National Economy

Telecommunications, IT devices, information and communication technologies, renewable energies, software, environmental technologies, medical equipment, biotechnology, safety and security, travel and tourism services, development of Arctic natural resources, franchises.

High Potential Sectors

Best franchising opportunities lie in underdeveloped areas of B2B services (such as personnel, building repair/maintenance, training and IT) and consumer services (cleaning services, interior design, nursing, etc.).

Telecommunications is a highly competitive sector which is growing quickly; as well as e-commerce. Finland also serves as an excellent gateway to the emerging computer software markets of Russia and the Baltic countries. The overall high level of public and private investment in biotechnology, infrastructure and technical know-how offer opportunities for foreign firms.

Privatization Programmes

Finland has opened up electricity, gas, telecommunications postal and rail markets in recent years to meet EU requirements. Sales of direct holdings of the State totaled USD 1.72 billion from 2010 to 2019.
For constant updates on privatization programs, please refere to the official Government ownership steering portal.

Tenders, Projects and Public Procurement

Tenders Info , Tenders in Finland
Ted - Tenders Electronic Daily , Business opportunities in EU 27
DgMarket , Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors

The state-owned betting company Veikkaus has exclusive rights in the market for legal gambling services.
The state also has a monopoly on the retail sale of alcoholic beverages. 
The State can approve FDI in areas of vital national (defense and security) or strategic interest (energy, food supply or communications).

Finding Assistance For Further Information

Investment Aid Agency

Invest in Finland (official investment promotion agency for Finland)
Findland Chamber of Commerce (international network of the Finnish chambers of commerce)
Finland’s Centers for Economic Development, Transport, and the Environment (ELY)

Other Useful Resources

Enterprise Finland
Finnavera (financing company owned by the State of Finland)
The Finnish Innovation Fund Sitra

Doing Business Guides

Doing Business in Finland (UHY)
Finland - Market Overview (The U.S. Department of Commerce)
Doing business in Finland (Thomson Reuters Practical Law)

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