Finland has long historical ties with Russia. The old big brother – little brother -relationship has changed into mutual business relations that benefit both companies and people on both sides of the border. In July 2011, Russia became Finland’s most significant trading partner since the collapse of the Soviet Union. Finns have excellent knowledge and experiences of operating in Russia; there are about 650 Finnish companies on the Russian market, including 500 in St. Petersburg. Many international companies have taken advantage of Finland’s strategic location and know-how and established their Russian-Baltic hubs in Finland.
According to the monthly report of the National Board of Customs, Russia became Finland’s most significant trading partner in July 2011. Previously the U.S.S.R. was Finland’s most important export and import partner in June 1987. Exports to Russia grew by 30 percent between January and July from last year, and the growth in imports was about 25 percent. Additionally, in relation to the population, Finnish direct investment in Russia is among the highest in Europe.
Transit transport through Finland to Russia is a large and growing area of Finnish-Russian economic relations. Nearly 30 per cent of Russia’s total imports transit through Finland. Finland is a competitive transit hub for value goods especially to Northwestern Russia as the Finnish corridor is reliable, safe, and effective.
Many international companies have established themselves in Helsinki and Finland due to the geographical closeness to Russia and the Finnish expertise of business with Russia. For example, American Airlines moved its Baltic hub to Helsinki and launched direct daily flights between Chicago and Helsinki in May 2011. The airline takes full advantage of Finland’s ready connections to Russia and the Baltics, and the shortest flight path to Asia.
Similarly, Flybe, Europe’s largest regional airline, made Helsinki its hub in the Baltics states by opening a number of low-cost new routes to Denmark, Sweden, Estonia and Latvia. This together with American Airlines’ direct flights to Chicago truly makes Helsinki the hub of the Baltics.
Many Finnish SMEs, especially in eastern Finland, establish international operations first in Russia. St. Petersburg is a handy starting place: it is close and easily accessible from the home country and the market is alluring: the St.Petersburg area has approximately seven million people, Finland has only five million. The companies learn quickly and easily what is needed in the Russian market and can then expand into other parts of Russia.
The presence of the Finns can be felt in Russia: in St Petersburg and its surroundings Finns account for around one-fifth of the foreign-owned companies in the area. The Finnish companies employ about 50,000 people throughout Russia and their investments so far are approximately seven billion Euros.
