2024: Doing Business in Finland

1. What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in your country that could have a big impact on businesses?

Foreign investors view Finland’s technological prowess, skilled workforce, stable business climate, and commitment to sustainability as the primary drivers for investing in Finland. Finland offers a 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. Finland consistently ranks high in quality-of-life indices.

In April 2023, Finland joined NATO and the centre-right National Coalition Party won the most seats in parliamentary elections and formed a centre-right coalition government with the far-right Finns Party, the centre-right Swedish People’s Party, and the centre-right Christian Democrats.

Finland is committed to clean energy and environmental sustainability. In May 2022, Finland approved the Climate Change Act, aiming for carbon neutrality by 2035 through emissions reduction and climate adaptation. Investors interested in green technologies find opportunities in renewable energy, circular economy initiatives, and eco-friendly solutions.

Real GDP growth is expected to accelerate in 2024. Inflation is slowing down, and economists predict that the general interest rates will start to decline. This will hopefully unlock and encourage investments. Furthermore, decreasing costs and increasing

2. From what countries do you see the most inbound investment? What about outbound?

According to a release published in February 2024, in 2023 Finland received the highest number of direct investments per unit from Sweden, the United Kingdom and Norway. Direct investment fell slightly compared to the previous two years, but this can be explained by the global economic and geopolitical tensions. The largest outbound investments from Finland were to Sweden, the Netherlands and Ireland. These figures are based on a 2023 report concerning investments confirmed in 2021. It’s important to note that these figures can change from year to year based on many factors, including global economic conditions and specific investment opportunities. At Castrén & Snellman, we have seen a lot of investments from the Nordic countries, Germany, the UK, and the US.

3. In what industries/sectors are you seeing the most opportunity for foreign investment?

Finland is known for its diverse nature, which is why the bio and circular economy is one of the sectors that should attract the attention of foreign investors. This sector aims to reduce dependence on fossil fuels and mitigate climate change by using renewable resources to produce food, energy, products, and services.

Finland’s data and technology industry offers another great opportunity. Alongside a highly educated workforce, a stable and competitive environment, and a strategic location, Finland’s focus on high-tech R&D and strong expertise in ICT make it a hub for innovation. The significant role of the data and technology sector in Finland’s economy and the steady flow of foreign direct investments further underscore its potential for growth and profitability.

4. What advantages and pitfalls should others know about doing business in your country?

Finland’s political stability, low corruption levels, and transparent legal system create a secure business environment. Finland is a global leader in green technology, health and welfare, and data and technology thanks to its innovative approach and expertise in these fields. The education system, known for its high standards, produces a steady stream of highly skilled graduates, providing a valuable talent pool for businesses. Furthermore, Finland boasts a high-quality industry across various sectors, primarily based on free markets. These factors, combined with the country’s commitment to sustainability and innovation, make Finland an attractive destination for businesses looking to expand or establish their operations.

The Finnish authorities and regulators are easily approachable, and businesses can rely on them to stick to an agreed schedule. Even though most Finns speak English very well, there can sometimes be a slight language barrier. Foreign companies can get by just by using English, but knowing some Finnish makes it easier to understand Finnish culture, customers, and colleagues.

Despite its relatively small population and market size, Finland offers unique opportunities for businesses. However, these demographic factors can sometimes limit the potential for significant growth and expansion. Companies operating in Finland may need to adopt innovative strategies to overcome these challenges. For instance, they might consider tapping into the global market to compensate for the domestic market’s size, thereby leveraging Finland’s strengths while also addressing the challenges posed by its market size.

5. What is one cultural fact or custom about your country that others should know when doing business there?

Finns are very punctual. If a meeting is scheduled to start at a certain time, Finns usually assume that after a short introduction, they can move on to the business at hand. As part of punctuality, Finnish culture includes directness. Finns are often very business-forward people and don’t make much small talk. Punctuality is something to keep in mind when planning business meetings, lunches, or dinners. It is typical for Finns to be a little early for meetings so that the other party doesn’t have to wait for them.

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