Finland: Investing

FDI in Figures

In the context of the international financial crisis, FDI inflow to Finland decreased dramatically in 2009; since then it has been growing slowly, a trend which is expected to continue into 2010. With regard to domestic FDI stocks, the country is ranked 38th in the world.

The country’s strenghts include: its reputation as having the least amount of corruption in the world, its competitiveness, its strategic position at the center of a dynamic zone formed by Russia, Scandinavia and the Baltic countries, and its economic orientation towards high technology, research and development.

For more information, refer to the Invest in Finland website.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	-1,974	-4	4,314
FDI Stock (million USD)	83,137	84,441	82,706
Performance Index*, Ranking on 141 Economies	139	112	-
Potential Index**, Ranking on 141 Economies	14	-	-
Number of Greenfield Investments***	38	24	-
FDI Inwards (in % of GFCF****)	-3.4	17.4	-
FDI Stock (in % of GDP)	30.8	37.2	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2009, in %
Sweden	52.4
Netherlands	15.3
Denmark	8.1
Germany	3.6
Luxembourg	3.2
Belgium	2.7
France	2.5

Main Invested Sectors	2009, in %
Finance and insurance	32.8
Services (other than trade, finance and insurance)	26.3
Metallurgy and engineering	16.5
Trade	10.8
Manufacturing (other than metallurgy, enginee ring, chemical industry)	5.2
Chemical industry	4.8

Source: Bank of Finland - Last Available Data.

Form of Company Preferred By Foreign Investors: Limited Liability Company or public limited liability company
Form of Establishment Preferred By Foreign Investors: Limited Liability Company
Main Foreign Companies: See information on the Invest in Finland website.
Sources of Statistics: Statistics Finland
R&D statistics by Finnish Funding Agency for Technology and Innovation

Why You Should Choose to Invest in Finland

Strong Points: The country's strong points are:
- Political stability;
- A strategic geographic location between Scandinavia, Russia and the Northern European expanding markets;
- A multilingual population;
- One of the least corrupt countries in the world;
- The significant investment done in Research and Development expenses (ranked 3^rd in the world);
- An extremely industrialised economy, based mainly on the free market and which showed a per capita return similar to the United Kingdom, France and Germany; and
- One of the most competitive economies in the world, according to WEF Global Competitiveness Report 2007-2008.
Weak Points: Finland's main weak points are:
- A limited domestic market; and
- High taxation rates.
Government Measures to Motivate or Restrict FDI: In the past years, Finland has made considerable progress in eliminating discriminatory regulations against foreign investors. The government's clear intention is to promote the country's integration into the European economic zone. Finlands strategic geographic location, situated between its European Community partners and the newly independent Eastern European states, gives it a definite advantage.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Finland: Finland is a signatory to 56 conventions.
International Controversies Registered By UNCTAD: Finland has been involved in no case of disagreement concerning foreign investment. UNCTAD offers a database listing disagreements and the countries involved, complementary information about the evolution of settlement of international disputes concerning investment.
Organizations Offering Their Assistance in Case of Disagreement: Arbitration Institute , Central Chamber of Commerce of Finland
ICCWBO , International court of arbitration, International chamber of commerce
ICSID , International Center for settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: Yes

Country Comparison For the Protection of Investors

	Finland	OECD	الولايات المتحدة	Germany
Index of Transaction Transparency*	6.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	4.0	5.2	9.0	5.0
Index of Shareholders’ Power***	7.0	6.8	9.0	5.0
Index of Investor Protection****	5.7	6.0	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed
Acquisition of Holdings: Possible
Obligation to Declare: 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.
Competent Organization For the Declaration: Ministry of Employment and the Economy
Requests For Specific Authorizations: A non-EEA person or company operating in Finland must obtain a license or a notification when starting a business in the regulated forms of trade such as banking and insurance sector.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Business incubators in Finland, office rental.
The Possibility of Buying Land and Industrial and Commercial Buildings: Yes
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 and 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: Aid is aimed mainly at improving the long term competitiveness of small and medium-sized enterprises.
Privileged Geographical Zones: Undefined
Organizations Which Finance: Business aid to companies is coordinated by Employment and Economic Development Centres (T&K Centers). 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).

Investment Opportunities

The Key Sectors of the National Economy: Telecommunications, computers and peripherals, computer software, environmental technologies, medical equipment, biotechnology, safety and security, travel and tourism services
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 but growing fast; e-commerce in telecommunications is expected to benefit. 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 Programs: Finland has opened up electricity, gas, telecommunications postal and rail markets in recent years to meet EU requirements.
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: State-owned betting company Veikkaus currently has exclusive rights to market legal gambling services in Finland. The state has a monopoly on the retail of alcoholic beverages.
Sectors in Decline: Agriculture

Finding Assistance For Further Information

Investment Aid Agency: Finnvera
Finnish Funding Agency for Technology and Innovation
The Finnish Innovation Fund
Finnish Investment Promotion Agency
The representations of the Finnish Investment Promotion Agency abroad
Other Useful Resources: Enterprise Finland
The EU website on SMEs and Entrepreneurship
Doing Business Guides: Finnvera financing guide
Finland Commercial Guide 2010 - Buy USA

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