Finland Encouragement Laws

Finland Encouragement Laws

• Finland is enjoying accelerated growth in the number of foreign investors.
• Among other reasons that attract foreign investors, the following may be counted:
  - A developed infra-structure, that includes quick and efficient access to Russia and Eastern Europe as well as 50 sea ports that make commerce efficient.
  - A skilled workforce with good command of English and other languages
  - A developed scientific and technological infrastructure.
• As a general rule, 100% foreign ownership is recognized in most sectors and there is no discrimination against foreign companies in favor of local companies.
  Nevertheless, when an investor who is not a resident of a country in the European Union is concerned, a license must be obtained in sectors that may present a security, health or financial risk.
• On the island of Aland, as a result of agreements dating back to 1921, ownership of real estate and a license to open a business are restricted exclusively to residents of the island.

Finland Benefits to Investors

• As a general rule, there is no discrimination between benefits granted to foreign investors and those granted to local investors.
• The benefits are given in the form of investment grants, loans at reduced interest or a state guarantee for exporters.
  Occasionally, the benefit is granted in the form of a combination of an investment grant and low interest loans, depending on the geographical location of the investment and the size of the investing company.
• Areas hit by unemployment are divided into three categories.
  Most of the north and center of the country are defined as Development Area 1.

The benefits are granted on industry, service and tourism related investments.

Finland Investment Grants

• As a general rule, the grants are designated for medium - sized / small companies that meet the following requirements:
  - Less than 250 workers are employed by the company.
  - An annual turnover of less than EUR 40 million or total assets of less than EUR 27 million in the balance sheet.
• The benefit is as a percentage of the total fixed assets in the company balance sheet.
• The grant varies from 30% in a Development Area 1 to 15% in a Development Area 3.
• Apart from the three development areas, the grant is given only to small companies that meet certain requirements.
• Small companies may receive a grant in the first year of up to 45% of the cost of the payroll for the project.

Finland Tax Benefits

• The benefits are granted only to small and medium - sized companies.
• The benefit is granted in Development Areas and it enables accelerated depreciation of fixed assets so as to allow full depreciation within 3 years, including the year of purchase.
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• The benefit is restricted to qualifying industries.

Finland Loans and Guarantees

• The benefits are granted through the Finnvera Government Corporation.
• The Corporation has 15 regional branches.
• The main benefits are granted mainly to small and medium - sized companies.
• The benefits include cheap finance and the provision of guarantees both for business development purposes and for the encouragement of export.

Finland Research and Development Grants

• The benefits are granted by Tekes, the national technology agency of Finland.
• The benefits are granted in the form of grants and low interest loans, to all types of companies, including large companies and academic institutions.
• The grant may reach 50% of the cost of the payroll, the cost of purchasing raw materials, machinery and the purchase and registration of patents and more.