Finland was the leading Nordic destination for foreign direct investment (FDI) projects in 2017, according to the EY 2018 Nordics Attractiveness Report. Claiming the top spot for the sixth consecutive year, Finland secured a new high of 191 projects, up by 44% from 2016 and representing 46% of all FDI projects initiated in 2017 in the Nordics. Helsinki also retained its position as the leading location for FDI, easily outperforming the other Nordic cities with 80 projects, up by 13% from 2016.
At the European level, Finland was ranked 10th in terms of FDI projects secured, moving up one place from 2016. The number of FDI projects in Finland increased by more than four times the European average of 10%, which was the second highest growth performance recorded by Europe's leading FDI destinations.
"Finland's consistent results for attracting FDI projects show that many international companies recognize the excellent growth opportunities offered by our investment and operating environment. A stable society with a world-class education system, a highly skilled workforce, leading technology know-how, thriving business ecosystems with outstanding R&D opportunities – these are some of the factors behind Finland's strong FDI performance," says Antti Aumo, Executive Director, Invest in Finland, Business Finland.
According to the EY report, Finland secured investments across a broader range of sectors compared to the other Nordic countries, with six sectors capturing 10 projects or more. Notably, Finland captured 43% of all digital projects initiated in the Nordics in 2017 as well as the most investments in manufacturing, pharmaceuticals, and R&D.
However, the biggest number of FDI projects in Finland were directed to sales and marketing operations, followed by manufacturing and R&D. Swedish investors continued to be the leading generators of FDI projects into Finland, followed by the United States, UK, Germany, Estonia, Denmark, Japan, France and Hong Kong.
"Finland is an ideal R&D&I location, often used by major companies as a testing and development platform. We have the best availability of scientists and engineers in the world. Many companies are also attracted by Finland's straightforward culture of cooperation in mutually beneficial ecosystems. For example, we have the global network companies working together on the 5G Test Network Finland with leading Finnish universities and research organisations," says Aumo.
Finland is at the forefront of the digital transformation and its FDI strengths include unique digital health data records and biobanks, smart energy, smart transport and smart retail, data centres and gaming. Other sectors that attract investor interest include business services, pharmaceuticals, finance, chemicals and plastic, cleantech and bioeconomy. Finland's vibrant startup scene is constantly producing new innovative companies.
As the only country in the Nordics that uses the euro, Finland also provides investors easier access to EU markets. In 2018, Nordic banking giant Nordea's shareholders voted to move its HQ from Stockholm to Helsinki in order for the bank to join Europe's banking union.
The strengths of the Finnish society and implemented decisions have worked to Finland's advantage in the international competition for direct investments, according to Mikko Äijälä, CEO, EY Finland.
"State tax policies, for example the reduction of the corporation tax to 20 percent, have made us a competitive investment location compared to the other Nordic countries. In order to maintain our position, Finland should continue to invest in innovations and high-quality education as well as in the further development of taxation and governance. These are important factors for foreign companies when making investment decisions," says Äijälä.
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