Why do great numbers of Russians choose Finland as their holiday destination? Because Finland is close to them, safe and highly functional, and blessed with a beautiful nature. The same reasons also attract Russian companies to settle down and invest in Finland. The last couple of years have seen a constant rise in Russian business money flowing in to the Helsinki region, the natural gateway between Russia and Europe.
According to Statistics Finland, there were 31 Russian-owned companies in the Greater Helsinki area in 2011 with a total revenue of 2544 M euros. The biggest of them are all newcomers, having arrived in the area just a couple of years ago. In addition, many Russian companies have subsidiaries in Finland, 34 altogether in 2012, and many of them operate in the capital and its surroundings.
The Russian companies in Greater Helsinki provide their customers with all kinds of products and services, ranging from gaseous fuels to transportation, footwear and real estate. Russian investments in Finland are also spreading to new and promising business areas, such as health and clean technologies, and life sciences.
Why just Helsinki?
According to a recent study by the Center for Markets in Transition (CEMAT) at the Aalto University, large and medium-sized Russian companies operating in Finland are seeking knowledge: they are learning how to operate in a competed market with clear rules, and they are eager to access technological know-how. Small Russian firms, for their part, have moved to Finland so they can be close to their Finnish customers – or serve their Russian customers in Finland more effectively.
The study conducted by CEMAT further shows that the Russian firms operating in Finland highly appreciate the country’s simple and transparent regulation and smooth dealing with authorities. Finland’s other advantages include geographical proximity and well-developed export networks to Russia, and the stability of the business environment and the whole country. Finland also serves as an excellent pilot market for doing research and development in one of the leading innovation hubs in the world.
Helsinki has recently welcomed, for example, Online Market Intelligence Oy, a Russian company which opened its European headquarters in Helsinki in 2010. The company is specialized in online panels, research services, and analytics, and provides online fieldwork in Russia, Ukraine, Kazakhstan, Belarus, and the Baltic states.
“The choice of Finland was not accidental. It is close to Russia and easy to reach: it only takes 1.5 hours to travel from Moscow to Helsinki, and it is also easy to travel from Finland across Europe. Finland is also a well-respected EU country with a transparent economy and high level of safety and comfort for the international companies that operate there. As we planned to bill all our EU clients from Finland, this was especially important. We are now considering moving our IT infrastructure to Finland because managing it would be very effective, inexpensive and safe here,” says Dr. Alexander Shashkin, Chief Executive Officer of Online Market Intelligence Oy.
Russian entrepreneurs go west
Recent political unrest in Ukraine and the development under Putin’s regime in Russia have also increased the attractiveness of western countries, including Finland, among the Russian entrepreneurs. A number of entrepreneurs are now seeking to leave Russia, because they have no confidence in the economic and political policies of president Putin.
“As the consequence of the Ukraine crisis, making business in Russia is becoming riskier than it used to be. The stability of the business environment provided in countries such as Finland is thus now a still more significant reason for Russian companies to leave Russia, or for Russian entrepreneurs to invest in Western companies,” says Dr. Päivi Karhunen, Academy Research Fellow at CEMAT.
Did you know?
The biggest Russian-owned companies in the Greater Helsinki area
- Oy Teboil Ab
- Rao Nordic Oy
- Oy Nizhex Scandinavia Ltd
- Lukoil Lubricants Europe Oy
- Oy Karelian Trains Ltd
- Oy Containertrans Scandinavia Ltd
- Ykköstarvike Oy
Further reading: Capital Legal Services sets foot in Helsinki as the first Russian law firm
Text: Laura Tahkokallio