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Doing Business in Finland
Finland, an EU member since 1995, has redefined itself from a quiet agricultural based economy to a trend setting, global center for technology and design. The country is highly integrated into the global economy with international trade accounting for a third of GDP. Finland’s commercial clout far exceeds its modest population of 5.4 million. Per capita income in Finland is more than $49,000, and Finland’s gross domestic product is about $232 billion (World Bank 2015). It routinely ranks at the very top of international surveys on education, quality of life, competitiveness and transparency.
Finland is at the epicenter of Europe’s “New North” – a unique intersection of geography, infrastructure, education, good governance, and high-technology industry. Among EU countries, Finland is second only to Ireland in terms of high-tech and knowledge-based manufacturing intensity.
Finland sits next to its Nordic neighbors Sweden and Norway and shares a 900-mile long border and a complicated history with Russia. Despite Russia’s economic recession and trade sanctions stemming from its occupation of the Crimea region of Ukraine, the commercial relationship between Finland and Russia remains significant. Many Finnish companies have longstanding business operations in Russia.
The European Union makes up more than 60% of Finland’s total trade. The largest trade flows are with Germany and Sweden. Finland’s key export sectors are transportation, electronics, forestry, machinery and chemicals. Finnish trade policy is managed by the European Union. It is the only Nordic country to use the Euro.
Currently, the United States represents the third largest market for Finnish exports and Finland’s sixth largest source of imports. Two-way trade between the U.S. and Finland was about $6.1 billion in 2015, chiefly medicine and medical equipment, paper and paperboard, aircraft, chemicals, and telecommunications and advanced instruments. Finnish imports of U.S. goods in 2015 were valued at $1.56 billion. Finnish exports of goods to the United States totaled about $4.5 billion. Finland’s import climate is open and receptive to U.S. products and investments. There are few barriers to trade.
- Finland has a vibrant start-up scene and offers opportunities for investment and collaboration in video gaming, ICT and e-health solutions.
- Finland introduced its latest national long-term climate and energy strategy in 2013. Growth in Finland’s cleantech sector has been driven by smaller firms operating in the areas of new materials, smart grids, recycling, and measurement technologies.
- The development of renewable energy, especially biomass, in Finland is expected to offer opportunities for U.S. companies with innovative renewable energy technologies, processes, and equipment.
- Driven by the need to conserve scarce energy, Finland has been involved in the development of low-energy and eco-efficient construction alternatives since the late 1980s.
- Finland has expertise in developing computer software products and is looking for U.S. partners.
- The Finnish healthcare sector is open to state-of-the-art medical equipment and e-Health solutions.
- There are opportunities for U.S. companies in the defense and security sectors; Finland has issued a Request for Information in support of its Fighter Jet Replacement Program.
- U.S. chairmanship of the Arctic Council offers a unique opportunity to engage with Finnish companies on cold climate technologies and solutions, e.g., ice-breakers, applicable to the circumpolar environment.
Market Entry Strategy
In addition to being an EU member, Finland is particularly closely linked culturally and economically with the other “Nordics”: Denmark, Iceland, Norway and Sweden. These economies are all advanced, high income and highly connected. While each country has its own unique market and characteristics, there are certain synergies that tie together these highly innovative marketplaces. With an aggregate GDP of $1.71 trillion and a combined population of 26 million people, the Nordics represent a unique opportunity for U.S. companies with sophisticated high quality products, technologies and services.
These open but competitive markets allow for a variety of market entry strategies. Representatives and distributors are common methods employed for initial market entry. The U.S. Commercial Service team in the Nordics works regionally and collaboratively to offer cross border, multi-market advice and solutions for U.S. companies looking to identify local business partners or other market entry options in Finland, as well as throughout the Nordic-Baltic region and the rest of Europe.
For more information, please contact U.S. Commercial Service Helsinki (at U.S. Embassy Finland): firstname.lastname@example.org