"The Success Story of Scandinavia goes from strength to strength"
Finland (Finnish name Suomi) is a republic which became a member of the European Union in 1995. Its population is 5.4 million. The capital Helsinki has 590 000 residents and considering its neighbouring areas, the Greater Helsinki region's population is about one million. Finland is an advanced industrial economy: the metal, engineering and electronics industries account for 50 % of export revenues, the forest products industry for 30%. Finland is one of the leading countries in Internet use. Today, there are more mobile phone than land line subscriptions. Forests cover three quarters of the country's surface area of 338 000 sq. km. Other outstanding features of Finland's scenery are some 190 000 lakes and approximately as many islands. The principal archipelago and the self-governing province of the Aaland Islands lie off the south-west coast while the main lake district, centred on Lake Saimaa, is in the east.
Finland was a part of the Kingdom of Sweden until 1809 when Sweden surrenders Finland (its eastern provinces) to Russia and the Czar declares Finland an autonomous Grand Duchy. The Russian era ends in 1917 when Finland declares its independence.
Finland has two official languages, Finnish and Swedish, the latter spoken as a mother tongue by about 6 % of the people. The official status of Swedish has historical roots in the period when Finland was a part of the Swedish realm, a period that lasted from the early 13th century until 1809. Another indigenous language is Sami, spoken within the small community of Sami people in Lapland (also known as Lapps). English has become the most popular foreign language and is widely spoken.
While Finland is an attractive, efficient centre for Northern European business it is also a knowledge centre offering world-class skills, research and development in cutting-edge technologies, telecoms, e-business, software and semiconductor development, ship building, forestry, biotechnology, industrial design, and logistics. This is the place for international logistics centers, business/academic partnerships, expertise and innovation.
Considering that Finland has developed from an agrarian outpost to its present position as a beacon of high technology, the economy is quite a success story. Traditionally, Finland has been a net importer of capital to finance industrial growth; in recent years it has become a net exporter of capital. Finland has one of the best performing economies in the EU and Europe.
Finland has a highly industrialized, largely free-market economy, with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing—principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important, with the export of goods representing about 30% of GDP. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. The economy has recovered from the recession of 1990-92, which had been caused by economic overheating, depressed foreign markets, and the dismantling of the barter system between Finland and the former Soviet Union. A relatively high unemployment rate (estimated at 7.7% in 2005) has been persistent but recent indicators show that the situation may be improving.
Finland successfully joined the euro zone and has outperformed euro-area partners in terms of economic growth and public finance. During recent years the government cut taxes and tempered inflation in order to incite private consumption to prompt a growth in GDP. Growth in GDP was 5.5% in 2006.
Labour legislation, collective bargaining and social welfare are the framework of the Finnish labour market system. The industrial relations are above all regulated by collective agreements which also regulate the minimum conditions for the work and establish labour peace. Distinctive for the Finnish labour market system is the high trade union density and collective bargaining coverage. About 70 per cent of employees are members in trade unions and 90 per cent of employees are covered by collective agreements. Also the membership in employers´ associations is high. The target of the employers is to shift more decision-making in wage conditions and pay rises to the company level.
Foreign-owned companies are eligible for government incentives on an equal footing with Finnish-owned companies. Most state and EU-sponsored incentive programmes are intended to promote investment in economically less developed regions and might not be applicable for the greater Helsinki area. There are several business aid-, tax relief-, and R&D incentives specially targeted at the SME sector.
The head of state is the President of the Republic who is elected for a period of six years and may serve a maximum of two consecutive terms. The President is chosen by direct popular vote, with a run-off between the two leading candidates if no candidate wins an overall majority in the first round of voting. In 2000, the Finns elected their first female president, Tarja Halonen who was re-elected in 2006 for another 6 year term. The Government must enjoy the confidence of parliament (the Eduskunta) which has 200 members elected every four years. In recent decades, the three biggest parties in parliament have consistently been the Social Democratic Party, the Centre Party, and the moderate conservative National Coalition Party. Multiparty coalition governments, the prevailing type, usually include two of the aforementioned parties. The leader of the Government, the Prime Minister, normally comes from the party with the most seats in parliament. Finland's present constitution, adopted in 2000, allocates more power to the Prime Minister than its predecessor did.
In its foreign policy Finland promotes sustainable development, stability and security in the international community and endeavours to strengthen Finland's international position. Finland attaches special importance to principles such as democracy, the rule of law and human rights, in line with long-established Nordic values.
As a member of the European Union since 1995, Finland is part of an influential body in world politics. Finland is an active member of the Union and supports a further strengthening of its Common Foreign and Security Policy, including its capability to act in crisis management. Finland is also a firm proponent of the Union's enlargement process.
Finland's foreign and security policy is based on military non-alliance and credible national defence. Finland cooperates with NATO in the PfP programme. Finland also has long experience of participation in UN peacekeeping operations. Finland works actively to strengthen multilateral cooperation, the United Nations and international law in general. Finland has launched the Helsinki Process which aims to improve current global governance structures.
The legal system is characterised by civil law tradition originates from the period of Swedish rule. The autonomous status that Finland enjoyed during the 19th century allowed also for legislative self-determination. Hence, virtually nothing of the legal tradition of Russia remains, while Finland continues to display the characteristics of a continental legal tradition, with influences in statutory law and jurisprudence from Scandinavia and particularly from Germany. EC law is directly applicable in Finland and takes precedence over national legislation.
All businesses operating in the Finland are subject to the laws of the country in which they operate. Finland has long had a policy of minimising bureaucracy and deregulating marketplaces in order to generate competition improve customer services and allow companies with good business models to develop and expand.
There is no legislation restricting foreign investors in the Finland. Foreign investment in manufacturing, R&D and internationally traded services is encouraged. Foreign companies and individuals may in general establish or acquire businesses in the Finland and buy securities, land or mortgages without a special license. There are no exchange controls regarding payments into or from Finland.
There are nevertheless strict laws governing employment, industrial emissions, pollution monitoring and control, and waste disposal. Financial transparency is a requirement of limited companies which must submit independently audited annual reports to the Company Registry and Tax authorities. To protect shareholder interests, there are more stringent annual reporting guidelines for publicly limited companies (PLCs).
Finland's court system consists of two separate branches, the general courts and the administrative courts. As a rule, matters concerning relations between natural or private legal persons are subject to the jurisdiction of the general courts, and matters regarding the application of administrative law generally fall within the administrative court's jurisdiction. Criminal matters are handled by the general courts. The courts of each branch are organised into a three tiered hierarchy. In addition, there are various courts with special jurisdiction in civil cases such as the Insurance Court, the Market Court and the Labour Court.
Generally speaking, Finland is a country where considerable weight is attached to the spoken word — words are chosen carefully and for the purpose of delivering a message. Indeed, there are very few other culture-specific considerations that visitors need be aware of. Finns place great value on words, which is reflected in the tendency to say little and avoid ‘unnecessary' small talk. As the Chinese proverb puts it, "Your speech should be better than silence, if not, be silent."
Finnish customs and manners are clearly European, with only a few national variations, and attitudes are liberal. There is very little chance of a visitor committing fundamental social gaffes or breaches of etiquette that would fatally damage relations between himself and his hosts. Such breaches are viewed by Finns with equanimity if committed by their own countrymen and with understanding or amusement if committed by foreigners. Codes of behaviour are fairly relaxed, and reputations — good or bad — are built up over time as the result of personal actions rather than conforming to certain norms or standards. It is difficult in Finland to make or break a reputation on a single occasion.
Finns have a very strong sense of national identity. This is rooted in the country's history — particularly its honourable wartime achievements and significant sporting merits — and is today nurtured by pride in Finland's high-tech expertise. Although Finns are not generally well versed in the history of other countries, they may well be disappointed if a visitor proves to be unfamiliar with the turning points of Finnish history or the sports careers of Finnish athletes. Visitors would be well advised to know something about the achievements of Finnish rally drivers and Formula 1 stars, and would be expected to know that football players Jari Litmanen and Sami Hyypiä are Finns. Culturally oriented Finns will take it for granted that like-minded visitors are familiar not only with Sibelius but with contemporary composers and orchestra conductors. While Finns are aware that Nokia is often mistakenly thought to be a Japanese company, this misconception is viewed forgivingly but with pity.
English and Swedish are widely spoken in Finland and are very common in the business world; some international Finnish companies even use English as their house language. German is less common, although many Finns in their 50s or older learned it as their first foreign language at school. French, Spanish and Russian form a growing part of the linguistic repertoire.
Finland is a nation with 1.5 million saunas — learning to bathe in the sauna comes as naturally as learning to speak. The real Finnish sauna has nothing in common with massage parlours and their likes. Mixed bathing is rare – men and women usually bathe separately. The sauna is also one of the few places where Finns will forget about work and talk about something else.