Foreign-owned companies have multiple options when deciding where to invest next. What are the push and pull factors for Finland?
Over 400 C-level executives from foreign-owned companies and Finnish companies were interviewed for Business Finland and Amcham Finland's join Finland as a Business Location Barometer 2020. The executives were asked how they view Finland as a business environment before and during the Covid-19 pandemic.
Foreign direct investments (FDI) have a significant impact on the Finnish economy. The barometer shows that 44% of foreign-owned companies plan to hire more personnel in 2020-2021, and 30% intend to invest more in R&D. In addition, one new job created in Finland leads to a minimum of two additional jobs, and one euro invested produces three additional euros.
"It looks like we are heading towards the ideal business environment. When foreign-owned companies were asked what they think about the Finnish business environment, Finland scored slightly higher than two years ago," remarks Antti Aumo, Executive Director of Invest in Finland.
Foreign-owned companies view the Finnish business environment more positively than Finnish companies. Foreign-owned companies regard societal stability, functionality, quality of living, and digital infrastructure as strengths of Finland. These factors were very important to Finnish companies as well.
Personal income tax, salary flexibility, and labor costs were challenges in the Finnish business environment, which have not changed since 2018. Therefore, flexibility of the labor market is a key in maintaining operations in Finland.
Alexandra Pasternak-Jackson, CEO of Amcham Finland, says, "Foreign-owned companies are more active than Finnish companies in moving their operations. They don't hesitate to comment if something needs improvement in Finland. It's very important that we actively listen to their opinions so that we can make the busines environment even more attractive."
With the Covid-19 pandemic, it is now even more important than before to support foreign-owned companies in Finland and meet their expectations to secure a stable environment for growth. Amcham Finland and Business Finland's study offers an opportunity to follow changing trends that have a lasting impact on investment in Finland.
Background: Only approximately 1% of companies operating in Finland are foreign-owned, however, their impact is much greater than this number suggests. These 4 400 companies employ almost 266 000 people, which is approximately 18% of personnel of all companies in Finland. Based on 2018 statistics, the combined revenue of foreign-owned companies was 96 billion euros. Measured by personnel and revenue, manufacturing was the most significant.
Leena Mäenpää-Wirtz, Communications Manager
leena.maenpaa-wirtz (at) businessfinland.fi
Tel. +358 50 521 7712