Quick Key Points
- Stimulus packages globally have strengthened the voices of protectionism, however, a large quantity of liquid assets are available on the local market.
- Finnish budget negotiations reached an agreement, and many actions are linked to the government’s green goals.
- Concrete decisions are not lacking only in the area of sustainable growth. Industrial policy strategy extends beyond the current government term
- The focus of economic policy has been on strengthening the competitiveness of Finnish companies, yet more focus could be put on being the Nordic front runner in attracting foreign investments.
- One challenge is that many international companies perceive the Nordics as a unified region where one solution fits all areas.
The fundamental topics of the current year can be summed up in three points: Corona, corona, corona. Stimulus packages across the world have strengthened the voices of protectionism, however, a large quantity of liquid assets are available on the local market. But is Finland worth investing in?
The goal of the budget negotiations finishing last week was to secure a stable, encouraging and predictable business environment, which also includes predictable taxation. These are goals that many international companies operating in the Finnish market have seen as topical.
The budget negotiations, however, reached an agreement on measures to improve the competitiveness of Finnish business and industry. Many of the actions are linked to the government’s goal to make Finland carbon neutral by 2035.
There is some good news regarding the budget decisions for international companies and investors. The electricity tax for industry will be reduced to the EU minimum level. Simultaneously, the industrial energy tax rebate will be gradually abolished over the two government terms. This is especially good news for companies that rely on inexpensive energy.
Finland is aiming to implement the objectives of the EU’s Recovery and Resilience Facility by its very own sustainable growth program for Finland. Over the years 2020 to 2023, over two billion euros will be used on six fast-track priorities, including research and innovation (R&D), green transition and securing international competitiveness. The allocation of this funding is yet to be seen.
Concrete decisions are not lacking only in the area of sustainable growth. The government decided to agree on an industrial policy strategy extending beyond the current government term. The program is attached to the goal of carbon neutrality. Companies that want to influence their operating environment in the long term should stay alert and share their views as the strategy work moves forward. The strategy may very well have positive effects on several international companies, as long as the advocacy plan is solid and prepared well in advance.
The budget for 2021, however, is part of a larger puzzle. The focus of economic policy has been on strengthening the competitiveness of Finnish companies, yet more focus could be put on being the Nordic front runner in attracting foreign investments.
There is still hope though. Successful international companies have realized that the Finnish market is a marathon and not a sprint. As Finland is often described not as a country, but as a country club, building networks and creating a meaningful dialogue in the industrial ecosystem and among policymakers is vital for a successful investment or market entry in Finland.
One challenge is that many international companies perceive the Nordics as a unified region where one solution fits all areas. As many of you know, that couldn’t be less true. Even though the societies function in a similar way, each country has elements that make a significant difference when operating in each market.
All in all, international companies can make their voices heard if they are willing to go the extra mile. When your organization is planning on making an investment in Finland, reach out to a local public affairs office or Amcham, rather than trusting your Swedish government affairs specialist.
Eero Rämö is a Director at communications and management consulting company Tekir. Prior to joining Tekir he has worked in various roles in the NGO sector. He holds two master’s degrees, one in law and one in social ethics.