In September 2002, the Confederation of Finnish Industry and Employers (TT) published a survey, which found that multinational companies based in Finland are increasingly seeing a need to move their head offices abroad. Tight personal taxation, distance from financial markets and the strong growth of subsidiaries abroad are cited as key reasons for moving functions to other countries.
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In September 2002, the Confederation of Finnish Industry and Employers (TT) published a survey, which found that multinational companies based in Finland are increasingly seeing a need to move their head offices abroad. Tight personal taxation, distance from financial markets and the strong growth of subsidiaries abroad are cited as key reasons for moving functions to other countries.
In September 2002, the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) published the findings of a survey entitled 'Will head offices move out of Finland?'. According to the results, 'internationalised' companies based in Finland are seeing a growing need to move their head offices abroad. The companies in question believe that there are only few economic reasons why their activities should remain on their present scale in Finland.
The majority of Finnish-based companies still run their core activities from units located in the country. However, the number of activities located in other countries has clearly been growing over the past few years. In future, companies do not plan to to move their core activities abroad at once, but gradually. Some 80% of the most internationalised companies state that they will reduce their head office activities in Finland within a few years. Finland is seen as having lost its competitiveness as a domicile for parent companies. The location of major financial markets and the taxation of subsidiaries' profits are factors favouring exit. On the other hand, the companies' history and the nationality of the management tend to keep the parent companies in Finland.
In the TT survey, companies state that they have difficulties in recruiting more foreign managers to work in Finland. In a few cases, this has led to a partial move of the activities of the management group and the head office abroad. The reasons for this situation are considered to be Finland's stringent personal taxation, narrow wage dispersion and high cost level, which do not favour working there. Recruiting foreign experts has been somewhat easier than recruiting foreign managers, because wage levels and taxation are not seen as such great barriers for this group, the report states.
In order to make Finland more attractive for business, TT would like to cut taxes and emphasises the public sector's role in creating the conditions for greater competitiveness and a more 'business-friendly' environment.
In January 2003, TT had already warned about head offices moving from Finland if constructive measures are not taken (FI0201142N).
Eurofound recommends citing this publication in the following way.
Eurofound (2002), Multinationals consider moving head offices abroad, article.
