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Investing in Finland
Finland has long been a beacon for innovation. But what can this small Nordic nation offer to discerning international investors looking for big gains? Finnish impact startups shine on the global stage. And Finnish venture capital funds outperformed both the listed market and European peer funds. If you’re considering investing in Finland, Helsinki Partners is ready to guide you.
Why invest in Finland?
Finland may not be the first European nation to spring to mind for investments, but its offerings are compelling. Here are eight reasons why this Nordic gem should be on every investor’s radar:
1. Advanced digital technologies
Finland is widely recognized as a leader in technology and innovation, with a rich history of producing world-class companies and technologies. Finnish startups are known for their cutting-edge solutions in areas such as artificial intelligence, Internet of Things, and 5G. The Finnish government and universities provide strong support for innovation and research, which drives the development of advanced digital technologies. This has resulted in a thriving startup ecosystem that is home to several fast-growing technology companies, like ICEYE, Swappie, and OURA, among others.
2. Strong startup ecosystem
Finland has a thriving startup ecosystem that is supported by the government, universities, and the private sector. This provides Japanese investors with access to a pipeline of innovative impact startups. The country’s supportive ecosystem, including access to funding and mentorship, also enables startups to grow and succeed. Additionally, the Finnish government has made sustainability a priority, which has helped create a culture of innovation and a favourable environment for impact startups.
3. Innovative research in health technology
Finland has advanced innovations in HealthTech, making it a hub for companies looking to revolutionize healthcare. The Finnish healthcare system is widely recognized as one of the best in the world, providing high-quality care to its citizens. The Finnish government and universities have invested heavily in research and development in the health tech sector, driving the development of innovative solutions. As a result, Finland has a booming startup ecosystem that is focused on developing cutting-edge health tech solutions.
4. High-quality talent
Finland is known for its highly educated and skilled workforce, which is critical for the success of impact startups. Investors can benefit from this pool of talented individuals when investing in Finnish startups. The Helsinki region inhabitants have completed an average over 4 years of post-comprehensive level education and Finnish students are consistently ranked amongst the smartest on the planet.
Finns have the work ethic and trans-sectorial skills needed to succeed in the knowledge-intensive businesses of the global economy.
5. Innovative business models
Finnish impact startups are known for their innovative business models, which often leverage technology to solve complex social and environmental challenges. This makes Finnish impact startups attractive investment opportunities for investors who are looking for creative solutions.
6. Strong political support
The Finnish government is committed to promoting sustainable development and has implemented policies to support the growth of impact startups. This provides a stable and supportive environment for Japanese investors to invest in Finnish startups.
7. Sustainable solutions across a wide range of industries
Finnish startups are known for their ability to create innovative and sustainable solutions in almost any sector. From renewable energy to circular economy and smart cities, these startups have the expertise and drive to tackle global challenges and create positive change. This is due in part to Finland’s strong education system, which encourages interdisciplinary thinking and problem-solving.
While impact investing has become more mainstream in recent years, the competition in Finland remains relatively low compared to other countries. This provides Japanese investors with a unique opportunity to invest in impact startups that are still in their early stages of development but have great potential for growth. In addition, Finnish startups have a proven track record of delivering results, making them an attractive and profitable investment option for investors.
8. Ready to scale
Another reason why Finnish impact startups are attractive to investors is that they are ‘born global’ and designed with readiness to scale in mind. These startups have a strong focus on export and internationalization, making them well-positioned to reach markets beyond Finland’s borders. Furthermore, Finland’s small size and strategic location at the crossroads of Europe, Asia, and North America make it easier for startups to expand globally. This allows Japanese investors to benefit from the potential of Finnish startups without having to worry about geographical barriers.
Diving into the Finnish Investment Landscape
Beyond its stunning northern lights and picturesque vistas, Finland is a hotbed of investment opportunities. With a vibrant startup scene, thriving real estate market, and robust stock exchange, Finland caters to a diverse investor palette. Here’s a snapshot:
- Start-Ups: With the rise of startups in the tech domain, there are abundant opportunities for venture capitalists and angel investors. Startups in Finland are known for their innovation, especially in the tech, bio, and circular economy sectors.
- Real Estate: The real estate market, particularly in cities like Helsinki, Oulu, and Tampere, has been on an upward trend. Real estate investments can range from residential properties to commercial complexes and office spaces.
- Stock Market: The Helsinki Stock Exchange, now known as Nasdaq Helsinki, is the primary securities exchange in Finland. It’s home to many publicly listed companies, providing an opportunity for stock investments.
Steps to Invest in Finland
Navigating Finland’s investment terrain is a rewarding journey, but preparation is key. Here, we distill the process into manageable steps, making your Finnish investment venture as smooth as possible:
- Research and Identify Opportunities: The official investment promotion agency, Invest in Finland, strengthens Finnish business ecosystems and aids Finland’s growth by attracting foreign direct investments. They produce information about Finland as an investment destination and update information about foreign-owned companies operating in Finland. Helsinki Partners offers similar information targeted specifically for investment opportunities in the Capital Region.
- Business Setup: Finland welcomes international businesses. Most foreign entities are set up as private or public limited liability companies. However, options like Finnish branch offices, general partnerships, limited partnerships, and co-operatives are also available.
- Business Licenses: While Finland practices freedom of trade, certain industries mandate a business license. These licenses, primarily designed to ensure community, environment, and consumer safety, are provided by local authorities for fixed periods.
- Work and Residence Permits: EU/EEA citizens staying in Finland for over three months need to register their right of residence. Non-EU/EEA residents require a residence permit. They also need to register at the Digital and Population Data Services Agency to obtain a Finnish identity number.
- Banking: Before opening a corporate bank account in Finland, one needs an extract from the trade register and a personal ID. After opening the account, the company registration process can be completed with the Finnish Patent and Registration Office.
- Stock Investments: For stock investments, you’ll require either an equity savings account or a book-entry account.
- Tax Implications: Capital gains on share sales are taxed as capital income. The tax rate for capital income up to €30,000 yearly is 30%. Beyond that, the rate is 34%. Dividends, too, are taxable. 85% of dividends paid to private individuals is taxed as capital income, while 15% is tax-exempt.
Finland’s investment environment is welcoming and presents an array of opportunities across various sectors. With proper research and the right partners, foreign investors can find lucrative avenues to invest and grow their capital in this Nordic nation.
Helsinki Partners provides free services for international investors looking to invest in Helsinki, including tailored recommendations, industry insights, and practical support for foreign investors.
Helsinki Partners’ journey to the land of the rising sun
Understanding the power of cross-border collaborations, Helsinki Partners recently journeyed to Japan. More than just an exploratory venture, our trip aimed to forge mutual understanding and synergies between Finnish and Japanese business spheres.
Engaging with influential Japanese business leaders and innovators, the warmth and interest we received highlighted the potential for shared growth. Japan, a stalwart in technology and innovation, resonates with Finland’s ethos. Yet, many Japanese investors remain unaware of the plethora of opportunities Finland houses.
Tomosaku Sohara, Managing Partner of NordicNinja VC, joined our delegation and provided invaluable insights into the dynamics of investing in the Nordic deep tech sector.
The market in Finland is so small that from the start companies have to think global. In Japan, companies don’t even have to think about going abroad because the market’s so large, they don’t have to scale outside of Japan. Finland’s the opposite.Tomosaku Sohara, Managing Partner of NordicNinja VC
This expedition has not only opened doors for potential collaborations but also positioned Finland prominently on the radar of Japanese investors, showcasing its unique strengths and potential.
Bridging the investment divide: Helsinki Partners’ returns to Japan
In the vast landscape of global investments, Finland stands out, brimming with untapped potential and innovation. From its bustling startup scene to its steadfast commitment to sustainability, the Finnish investment climate is rich, diversified, and ready for exploration.
Helsinki Partners, having previously journeyed to Japan and recognising the profound synergies between the two nations, is set to embark on a return trip. Our purpose is twofold: to continue fostering the bridges we’ve begun building and to introduce even more Japanese investors to the many opportunities that Finland offers.
We invite you to be part of this exciting venture. If you’re keen on deepening your understanding of Finland’s investment landscape or eager to discuss potential collaborations, our business advisors are ready to engage. Join us on this journey; let’s script new chapters of cross-border collaborations together.
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