FINLAND: Useful Info

Finland is the fifth largest country in Europe, and the market potential is as large as its geographical breadth. Its strength lies in its engineering and high-technology industries, led by phone giant Nokia. In fact, Finland incredible growth during the 1990’s was largely due to strides made in the mobile phone and telecommunication sector. This has helped it become one the best performing economies in the EU and Europe, despite a relatively small population.

Finland is Europe’s largest archipelago, and its picturesque landscape rich in forests and lakes—numbering over 60,000—make it a popular tourist destination.

Quick Facts

Population: 5.2 million
Capital—Helsinki
Area: 337,113 sq. km. (130,160 sq. mi.);
Major Languages: Finnish 93%, Swedish 6%
Main Exports: electronics, metal, forest products, chemicals
Monetary Unit: Euro
GNI per capita: 32,790

Economic Background

The Finnish economy relies on three export sectors: electronics and electro technical goods, metal and engineering products, and forest industry products account for about 26.5%.

The nature of its exports is an indication of the country’s growing industrial economy, a dramatic shift from a mere 20 years ago when forest products were its primary export. It also explains its dependence on imports of raw materials and machinery and components to support its manufacturing base. There is also a high demand for consumer goods like textiles, clothing and cars, approximately 25% of its total imports.

UK firms are in a good position to seek business or investment opportunities in Finland, because of the long and vigorous trading history enjoyed by the two countries. Finland is the UK’s 23rd largest export market. An average of 6.4% of its imports are from the UK, which it considers its fifth largest supplier. Aside from this, the UK has more than a 20% share of Finland's invisible imports. The exports of UK services are valued at about £1.4 billion.

There are many reasons why Finland presents excellent business and investment opportunities. Its industrial base, constantly innovated to meet the latest global standards, are excellent for joint ventures and technology transfers. The Finnish government also offers many tax and regional incentives to foreign investors. Its nominal corporate tax rate is 26%, much lighter than international standards, and the generous depreciation allowances encourage reinvestment of profits. Foreign owned limited companies are also given free hand with the repatriation of profits and capital. They can even apply for government grants or loans for promotions and research and development. Start-ups can even approach Finnvera, Finland’s state-owned company, for assistance in marketing, management training, and consulting.

Finland provides additional incentives to companies setting up in development regions, including tax relief for the first three years of operation. Infrastructure such as the Internet is readily available and the excellent road systems make travel easy, even to those new territories.

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