Finland: Investing in Finland
Foreign direct investment (FDI) flows to Finland have been fluctuating in recent years, and were negative by USD 1.6 billion in 2023 (compared to +5.8 billion one year earlier) according to the World Investment Report 2024 published by UNCTAD. At the end of the same period, the total stock of inward FDI stood at USD 149.6 billion. Just above half of new foreign investment in 2023 was directed to the Uusimaa region in southern Finland, which includes the capital Helsinki and other major cities like Hyvinkää and Espoo. Examined by country, net inward FDI stock (immediate investor) is highest from Sweden (EUR 16.3 billion), the U.S. (EUR 14.2 billion), Germany (EUR 6.2 billion), Luxembourg (EUR 6 billion), and Norway (EUR 5.5 billion – data Finnish Investment Agency). Foreign-owned companies represent just 1% of all firms in Finland, yet they have a significant impact on the country's economy. These companies generate 23% of the total turnover, amounting to EUR 130 billion, and provide 308,800 jobs across 5,306 firms. They also account for 16% of the private sector workforce and contribute 39% of Finland's exports, valued at EUR 32 billion. In research and development, foreign-owned firms make up 27% of investments, totalling EUR 1.2 billion. Furthermore, they contribute EUR 1.68 billion in corporate tax revenue (official governmental figures). According to the latest figures from the OECD, FDI inflows to Finland totalled USD 859 million in the first half of 2024, compared to a negative inflow of USD 8.68 million in the same period one year earlier.
The country’s strengths include a highly educated workforce, a knowledge-based and innovative economy, a reputation for stability and lack of corruption, competitiveness, a strategic position at the centre of a dynamic zone formed by Russia, Scandinavia and the Baltic countries and its orientation towards high technology, research and development. The country also offers a strong expertise in ICT and cutting-edge technologies, such as microelectronics, quantum and supercomputing, shipbuilding, forestry, and renewable energy. In recent years, the country's government announced several tax incentives for foreign investors to conduct research and development activities in Finland. Among the country’s weak points are the small size of its market, a high vulnerability to the international situation, substantial labour costs and a high degree of dependence of the country’s banking sector on the Swedish and Danish financial sectors. Furthermore, significant amendments to the Monitoring of Foreign Corporate Acquisitions Law (172/2012) entered into force, widening the scope of acquisitions that are subject to mandatory pre-approval. Overall, Finland has a very friendly business environment, as shown by the fact that the country ranks 15th out of 67 countries in the World Competitiveness Index published by the International Institute for Management Development (IMD). Furthermore, Finland ranks 6th among the 132 economies on the Global Innovation Index and 12th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | -1,579 | 13,806 | 9,445 |
FDI Stock (million USD) | 90,468 | 86,292 | 99,901 |
Number of Greenfield Investments* | 143 | 119 | 86 |
Value of Greenfield Investments (million USD) | 2,452 | 2,658 | 2,563 |
Source: UNCTAD, Latest available data
Note: * Greenfield 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.
Country Comparison For the Protection of Investors | Finland | OECD | United States | Germany |
Index of Transaction Transparency* | 6.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 4.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest 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 country's strong points:
Finland's main weak points:
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Latest Update: February 2025