Finland Market Entry

Subchapters:

Market entry
Forms and conditions of operation on the market
Marketing and Communications
Issues of intellectual property protection
Public procurement market
Payment terms, payment ethics and resolution of commercial disputes
Visas, fees, specific conditions of travel to the territory
Employment of citizens from the Czech Republic
Fairs and events

Market entry

A foreign company can start its activities in Finland by establishing an independent subsidiary, registering a branch in the commercial register or by submitting a declaration of incorporation to the tax administration, on the basis of which the company will be entered in the necessary registers (register of advance payments, register of employers and register of VAT payers).

According to cheeroutdoor.com, Finland has a contractual credit rating from two rating agencies: Fitch Ratings and S&P Global Ratings (latest ratings from autumn 2021 and April 2022 are AA+ from both companies, stable outlook). In addition, other rating agencies such as Scope Ratings (AA+) and DBRS Morningstar (AA) issue unsolicited ratings to the government.

Finnish legislation does not contain any special provisions regarding the relationship to resale. Selling directly to retailers or end customers can be challenging due to the patriotism of Finnish consumers, especially without knowledge of the specifics of the local, relatively closed and capacity-limited market, which is why we recommend using the services of sales representatives. The activities of sales representatives are governed by the Sales Representatives and Sellers Act (in Finnish only). Some local companies can represent a good intermediary for the re-export of goods to the Baltic countries.

When entering the Finnish market, it is necessary to comply with the Consumer Protection Act, the Directive of the European Parliament and the Council on Unfair Commercial Practices towards Consumers in the Internal Market and the Competition Act. More information regarding the practical performance of business activities on the Finnish market can also be found on the website of the Finnish Competition and Consumer Authority.

Finland has been a member of the EU since 1995, and as part of the free market, goods and services imported from the Czech Republic are not subject to customs duties. Only the import of certain types of goods (e.g. medicines, live animals, plants and food of animal origin, cruise ships, jet skis and outboard motors, endangered animals and plants and goods made from them, firearms and ammunition, etc.) from EU countries is subject to import restrictions and therefore requires a special permit that must be issued in advance. More information for companies interested in exporting to Finland can be found on the website of the Finnish Customs Office.

Forms and conditions of operation on the market

The predominant forms of business entities in Finland are trades (toimimini, 49%) and joint-stock companies (osakeyhtiö, 42%). A joint-stock company is a combination of a Czech s.r.o. and a.s. If the joint-stock company is listed on the stock exchange, its shares (shares) are freely available for sale. Other forms of business companies (limited partnership, open company and cooperative) are only minimally represented. It is typical for Finland that the state has a stake in major companies. Despite the small number of cooperatives in Finland, they have over 4 million members (90% of adult Finns are members of a cooperative), produce about 20% of GDP and employ about 100,000. people. The most well-known cooperatives in Finland are cooperative banks and insurance companies (e.g. OP group with approx. million members) and cooperative stores (e.g. S-Group with approx. 2 million members).

In contrast to the legal regulation in the Czech Republic, a business (toimimini) is a personal business corporation. Its disadvantage is the responsibility of the entrepreneur for the obligations of the corporation. In terms of tax burden, a business is a less advantageous form than a joint-stock company. Setting up a business is administratively easy and cheap (the fee for setting up is EUR 60).

A joint-stock company (osakeyhtiö) is a capital business corporation. Partners are not liable for the company’s obligations and the only risk is associated with investing in a share in the company. As of 2019, the requirement for a minimum share capital is abolished. The company incorporation fee is EUR 275.

Large trading companies usually prefer traditional Finnish suppliers. Czech companies interested in supplying their products to large retail chains are therefore recommended to first look for a Finnish sales representative who will enter into negotiations with the buyers of important distribution companies. Representatives work for a regular commission, usually represent several companies or have exclusivity for other territories as well.

The establishment of a branch, company or representative office does not encounter any unusual obstacles. You need to know the legislation governing labor relations with local employees. Due to the complexity of the tax system and the considerable rights of employees (collective agreements, workplace health care), it is advisable to contact an experienced legal office dealing with commercial or labor law or to use the legal advice of industry organizations.

Advice on company establishment is provided by the Patent and Registration Office. Relevant information can also be found on the pages of the national information portal Suomi.fi or on the pages of Business Finland.

Marketing and communication

Among the largest advertising agencies in Finland is Salomaa-Yhtiöt (Salomaa Group), which brings together a number of companies active in the field of marketing communication (Dagmar, SEK, Yuru, Kaski Agency, Proof and RADLY). When it is necessary to use the services of a PR agency, Czech companies can contact, for example, the following companies: PING Helsinki, Harkonsalo & Vesa (H & V) Public Relations, King Street Public Relations or the Finnish branch of TBWA, whose clients are Finnish giants from all fields (e.g. Fortum, Atria, S Market, Prima Pet Premium, etc.).

During the last two years, the company Duunitori has become the largest Finnish personnel agency with 8 million ads read per month, more than 500 thousand. visitors per week and more than 600 thousand people following the company on social networks. The agency offers various packages to employers looking for new workers, which it specifically addresses on FB, Instagram, LinkedIn, using Google Ads, Smartly.io or RTB House. Prices for the agency’s services start at 400 EUR for better visibility of the ad in search on the Duunitori website and on the company’s social networks; the most expensive package at EUR 2,600 is then intended for demanding recruitment of specialists, while Duunitori guarantees viewing of the request by a certain number of job seekers. Other important HR agencies include, for example, Baron, AIMS Finland (specialization in demanding executive search) or InHunt Group.

Companies in Finland annually invest approximately EUR 3 billion in marketing communication, of which advertising in newspapers, television, radio and the Internet represents approximately 40% of the total turnover of this industry. Within the Internet, companies focus mostly on digital advertising, or services of effective SEM marketing (Search Engine Marketing) and optimization for search engines (Search Engine Optimization). About a quarter of the costs are spent on direct marketing and a fifth on promotion in the form of printed materials and participation in trade fairs. Among the social media, major Finnish companies use the LinkedIn professional network the most.

Alcohol marketing is restricted by legislation that prohibits advertising, indirect advertising and other promotional activities for spirits with a volume of more than 22% alcohol. Advertising of alcoholic beverages up to 22% alcohol is prohibited in public places such as bus stops, billboards, etc. On television and radio, advertisements for any type of alcohol (even low-percentage) can only appear after 10 p.m.

Issues of intellectual property protection

Intellectual property rights are protected in Finland by extensive domestic legislation, EU law (Directive 2001/29/EC) and international treaties (Paris Convention for the Protection of Industrial Property and WIPO treaties). The office dealing with the issue of intellectual property protection is the Finnish Patent and Registration Office (PRH). PRH offers a free service manual for the protection of intellectual property in English on its website. This manual will help you identify, protect, manage and use your company’s intellectual property. It is necessary to be active and protect intellectual property well in advance of the product launch. For example, a patent holder can send a written request to stop the infringement of its rights. If the patent holder is not granted, he can file a lawsuit in court and demand damages. In relation to Czech entities, no violation of the protection of intellectual property rights has yet been recorded.

Public procurement market

Finland, as a member of the EU, announces important public contracts through the Official Journal of the EU. Information on individual prepared and ongoing tenders, as well as the results of tenders, can be found in English on the website of the Finnish Ministry of Finance, Hilma. On this portal it is possible to register and set up notices for new orders according to the selected specifications. The government announces on the Hansel website planned tenders up to 18 months in advance. However, most tenders are only available in Finnish, in which all the necessary documentation is usually also required. A number of tenders are “tailor-made” for Finnish companies, which is why their success rate is high. Nevertheless, it definitely makes sense for Czech companies to pay more attention to public contracts – the Embassy of the Czech Republic in Helsinki is ready to provide additional information on individual tenders and support in submitting bids.

Based on the above, Czech companies interested in participating in a specific tender can be recommended to create a joint business-legal entity with a Finnish entity and submit an offer on behalf of this joint venture. Before the tender is issued, so-called “market consultations” are organized, in which Czech companies interested in the contract can take part and, as part of them, influence the award of the tender to a certain extent. After the publication of the call for tenders, there is a period in which any entity can raise various types of questions to the tenderer. After this period expires and the submission of bids is closed, a so-called confidentiality period occurs, in which the tenderer does not submit any information due to the protection of sensitive data. If the Czech entity is dissatisfied with the procedural course of the tender, it can appeal to the administrative court.

Evidence of the interest of Finnish companies in cooperation with foreign entities within the framework of tenders, and specifically with Czech companies, is the fact that, for example, the largest Finnish construction company YIT, during earlier cooperation, informed the Embassy of the Czech Republic in Helsinki of its openness to cooperation with Czech subcontractors, for which they appreciate quality goods and services, while approximately 10% of the value of all tenders in which YIT participated was realized in cooperation with a foreign entity. YIT offers free consultations on the situation on the Finnish construction market, the establishment of a branch office and all related administrative matters and is willing to share knowledge and experience with Czech subcontractors in case of financial, logistical or other problems. On the YIT website in the section dedicated to potential partners you can fill in the information about the company applying for subcontracting cooperation, which is automatically sent to the company’s procurement department.

Payment terms, payment ethics and resolution of commercial disputes

Common terms of payment for foreign trade are payment order, documentary direct debit and documentary letter of credit. The most common due date for invoices is 14 days, between entrepreneurs the invoice due date may be longer than 30 days only if the parties have expressly agreed.

The payment morale of the Finnish clientele is very high. From the experience of the commercial and economic section, there are known rare cases from the past years when Finnish companies got into financial difficulties and subsequently did not pay the Czech company for the delivered goods or services. Therefore, even in Finland, it is necessary to thoroughly check the customer’s business operations and secure payment with a suitable instrument.

Finnish companies prefer the amicable resolution of business disputes. Possible legal actions against Finnish companies are best conducted through Finnish law firms or companies specializing in debt collection. Arbitration is a significantly cheaper and faster alternative to dispute resolution. In Finland, there is a permanent arbitration body, The Arbitration Institute of the Finland Chamber of Commerce, which offers mediation services in addition to arbitration.

Visas, fees, specific conditions for traveling to the territory

Finland is part of the EU and the Schengen area, and you can travel here from the Czech Republic with a valid passport or identity card. The length of stay is not limited, but for stays longer than 90 consecutive days, EU citizens must register with the Migration Office (Migri/Finnish Immigration Service).

Finland is a very safe country where you can move everywhere and in all ways and means of transport. The cities have a high-quality public transport network and there is reliable train and bus transport between the individual cities. Transport is expensive by Czech standards (a public transport ticket valid for 80 minutes costs approx. 75 CZK). From the airport, there is a direct and very fast train connection directly from the underground of Terminal 2 to the Central Station in the center of Helsinki (27 min.). It is necessary to purchase a ticket for AC bands worth EUR 4.10 for transportation. Tram No. 3 goes from the station directly to the Eiran hospital stop (12 min.), from which the Embassy of the Czech Republic is approx. 150 m away.

Card payment is very widespread in Finland and there are only an absolute minimum of places where it is not possible to pay by card. Tap water is of good quality in Finland and is available free of charge in all restaurants and cafes.

Employment of citizens from the Czech Republic

Citizens of the Czech Republic do not need a work permit to work in Finland as EU citizens. From the experience of the ZÚ, not all Finnish employers are aware of this fact or mistakenly confuse the registration of EU citizens with the application for a residence permit, and therefore it is good to draw their attention to this. For stays longer than 3 months, EU citizens must register with the Migration Office (Migri/Finnish Immigration Service). If a citizen of the Czech Republic is coming to Finland for a longer period of time, we recommend that you register as soon as possible, given that registration is tied to the allocation of a personal number (henkilötunnus), which is the basis for functioning in Finland and without which it is very difficult to conclude contracts with e.g. telephone companies operators, insurance companies or banks. The personal number can be obtained by writing to Population Register (Digital and Population Data Service Agency).

The use of healthcare by EU citizens, i.e. including citizens of the Czech Republic, is governed by standard mechanisms in Finland, as an EU member state. Detailed information is provided by the Health Insurance Office. Before leaving for Finland, it is important to obtain a European Health Insurance Card from your health insurance company, which guarantees citizens of the Czech Republic the provision of necessary medical care in the network of public health facilities, under the same conditions and at the same price as citizens of Finland. Considering the relatively high co-payment and capacity limitations of the public health system, it is advisable to take out additional commercial insurance for medical expenses for a stay in Finland.

Citizens of the Czech Republic working in Finland become part of the Finnish social and health security system and, upon request, the local social security and health care institution Kela issues them a so-called “kela-card”. With a kela-karta, citizens of the Czech Republic have access to all healthcare services under the same conditions as citizens of Finland. Services in the private healthcare sector are not reimbursed and it must be taken into account that they are very expensive (in some cases, you can request a refund of part of the costs from the state insurance company Kela according to the price list of the services, but usually only a very small part of these costs can be covered). In Finland, employees usually also have access to contractual occupational health care.

In Finnish legislation, the minimum wage is not determined, its amount is determined on the basis of a generally binding collective agreement in the given sector. Links to collective agreements are provided on the website of the largest Finnish trade union headquarters SAK, where the connection to the respective collective agreements is indicated for individual trade unions. In fields and companies that do not fall under collective agreements, employers have the obligation to pay employees a usual and reasonable wage according to the type of work performed and the worker’s experience. For a general idea, here are some examples of average monthly earnings (taken from Statistics Finland): supermarket clerk: EUR 2,700, buyer: EUR 4,000, storekeeper: EUR 2,500, mechanic: EUR 3,800, teacher: 4 €500, Manager: €6,000, Specialist: €4,500, Doctor: €7,500, Construction worker: €3,000.

A special category is posted workers, i.e. employees of Czech companies who are sent to Finland for the purpose of subcontracting work and their usual workplace is located in a country other than Finland. The sending company must comply with Finnish labor law and tax regulations in case of posting. In addition, special obligations are set for the field of construction. The rights and obligations of employers are summarized on the website of the Labor Inspectorate (Occupation Safety and Health Administration in Finland).

Fairs and events

May 2022:

Cyber Security Nordic, Helsinki
Maxpo 2022 (construction and environmental machinery), Hyvinkää Airport
Teknologia 22 (Technology and Industry), Helsinki
Petrochemical and Refining Congress (petrochemical industry), Helsinki
Assistive Devices Fair, Helsinki
PacTec, FoodTec & PlastExpo Nordic (packaging, food, plastics), Helsinki

June 2022:

The 2022 HIMSS European Health Conference & Exhibition (healthcare), Helsinki
XXIV International Sportsmen’s Fair (outdoor and hunting equipment), Riihimäki
IglooConf (IT), Helsinki
Arctic15 (startups and investments), Tampere, Helsinki
PulPaper 2022 (forest industry), Helsinki
ChemBio Finland (Chemical and Biotechnology Industry), Helsinki

August 2022:

Wasa Future Festival (sustainable development, energy, new technologies, transport, culture), Vaasa
Helsinki Finance Summit (investment and finance), Helsinki
Shift Business Festival (sustainable business), Turku

September 2022:

Habitare (furniture, home accessories), Helsinki
Caravan Finland (caravans and camping equipment), Lahti
IDC IT Security, Helsinki
Nordic Business Forum, Helsinki
Alihankinta – Subcontracting Trade Fair (metal industry, electronics, rubber industry, industrial ICT solutions, design and consulting), Tampere

October 2022:

FinnBuild (international construction trade fair), Helsinki
Helsinki Book Fair (books), Helsinki
Wine & Food, Helsinki
Smart City & Buildings (technology, planning, and innovation of smart cities), Helsinki

November 2022: