Finland: Regional 2024 Doing Business In Update

Published on May 16, 2024

2024 Finland Regional Update

Firm Name: Castrén & Snellman
Authors: Jarno Tanhuanpää, Niina Bodekole, Sakari Lukinmaa,

1. How is the political environment impacting business in or with your country?

Finland offers a politically stable and transparent business environment: the legal system is reliable, and corruption levels are low. Setting up operations is relatively smooth, with straightforward regulatory processes. Foreign investors view Finland's technological prowess, skilled workforce, stable business climate, and commitment to sustainability as the primary drivers for investing in Finland. In April 2023, Finland joined NATO, and the center-right National Coalition Party won the most seats in parliamentary elections and formed a center-right coalition government.

The Government recently discussed the 2025–2028 General Government Fiscal Plan. The goal of Prime Minister Petteri Orpo's Government is to stabilize the general government debt-to-GDP ratio. As the most significant method for supporting economic growth, the Government proposes a maximum of EUR 150 million tax credit to large industrial investments, particularly those promoting green transition. The tax credit would be granted by December 31, 2025, to new investment projectswhere the decision to implement has been made. The tax credit is a response to the increased competition for industrial investments.

2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?

The Nordics: Sweden, Norway and Denmark, Benelux, The United Kingdom, France, Iberia, Central and Eastern Europe, Greece and the Balkans, Germany, Austria and Switzerland.

Over 50 % of Castrén & Snellman’s assignments are cross-border and we expect this to continue and see great potential in international collaboration in the future, as well.

3. What legislation has recently changed or is changing that a potential international client should be aware of?

The regulatory scrutiny on small and medium-sized mergers has increased in Finland. The new, lower turnover thresholds under the Finnish Competition Act have been in force for over a year, and competition authorities in different EU states keep an increasingly close eye on mergers. The parties of a merger need to be even more careful in mapping out the merger's effects and potential remedies and anticipating the competition authorities' new theories of harm and investigative priorities. The authorities' possibility to assess mergers in narrowly defined product and geographic markets, together with the lowered thresholds, may lead to even fairly small mergers being risky.

The Consumer Protection Act in Finland was reformed on October 1, 2023, to affect online stores. The reforms concern the presentation of different payment methods and authenticating consumers' identities in distance selling.

From a national regulatory perspective, the planned changes to VAT may affect the business of international companies in Finland. The Government has submitted a proposal to amend the rates of VAT and insurance premium tax laid down in the VAT and Insurance Premium Tax Acts. The general VAT rate and the insurance premium tax rate are proposed to be increased from 24% to 25.5%. The laws would enter into force on September 1, 2024.

As in other EU countries, Finland is also affected by the lively and fast-changing EU regulatory environment. The most relevant changes are sustainability and artificial intelligence.