Foreign-owned companies are feeling right at home in Finland – and continue to seek impressive growth
A society where everything works? Where quality of life and digital connectivity are world-class – and there’s skilled workforce available? – If you’re a big CEO of an international company, there’s probably only one question remaining in your mind: where do I sign up?
Recently, Amcham and Business Finland partnered up – for the second time – to ask company executives what they think about Finland as a business location. Finland as a Business Location 2020 Barometer includes the responses from 172 foreign affiliates as well as 231 Finnish international companies. Conducted between March and September, 2020, the barometer reveals that the foreign companies are really into Finland – even more so, sometimes, than the natives themselves.
According to the barometer, foreign-owned companies view the Finnish business environment more positively than Finnish companies – citing such reasons as societal stability, functionality, quality of living, and digital infrastructure as key strengths of Finland.
And it’s not just talk, either. Foreign-owned companies, which participated in this survey, plan to hire more personnel in 2020-2021, and 30% intend to invest more in R&D than the year before.
This is mighty good news for the Finnish economy, since the impact of the foreign-owned businesses runs deep and stretches wide. While only about 1% of companies operating in Finland are foreign-owned, these companies – numbering 4,400 – 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 a whopping 96 billion euros.
One of the executives interviewed for the barometer is Karolina Burmeister, Country Manager, Head of Corporate Banking for Finland at Citi. Burmeister states that from the perspective of an international bank, Finland has “a fantastic operating environment”.
“This is literally the most stable country in the world, with a very predictable and transparent legislative and regulatory environment, and with a government committed to the international community and EU decision-making,” she says, adding that the bank also benefits from the highly ranked educational system when recruiting in Finland.
Miriam Holstein, CEO, Bayer Nordic, is thinking along the same lines, praising Finland as an excellent place to set up R&D and production.
“The deep knowledge and skills, high level of education, skilled workforce, health technology, health data and legislation all support our R&D activities, creating a very good business environment for a global life science company like us,” she says.
Bayer’s recently published an extra 35 million euro investment – on top of its 80 million euros of annual investments – in Finland, which is a solid example of a another interesting trend. The barometer reveals that, of late, more foreign companies have moved their operations to Finland than Finnish companies.
Out of the 403 respondents, 26 foreign and 18 Finnish companies moved at least one operation to Finland between 2018-2020. The main operations that foreign affiliates moved to Finland were production of physical goods, R&D and management.
Antti Aumo, Executive Director of Invest in Finland, comments that the “Finnish formula” is certainly something that the international companies have taken a liking to.
”It looks like we are heading towards the ideal business environment,” says Aumo.
However, Finland is not there quite yet. According to the barometer findings, there are still challenges such as personal income tax, salary flexibility, and labor costs.
Alexandra Pasternak-Jackson, CEO of Amcham Finland, agrees that foreign-owned companies are more active than Finnish companies in moving their operations – and 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,“ she says.
- 44% of foreign affiliates interviewed plan to increase the number of employees in Finland between 2020-2021.
- 30% of foreign affiliates in this survey will grow investment in R&D in 2020-2021 in Finland.