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A guide to placing contractors in Finland

Michelle Reilly, CEO of 6CATS International

2017 was certainly a good year for Finland. Not only did it celebrate 100 years of independence, but it also saw positive economic growth, with the central bank’s economic forecast in December putting this figure at 3.1% for the year.

But as the New Year begins, what lies in store for the country and what opportunities are there for recruiters placing contractors into Finland?


Following a great year in economic growth, forecasts suggest the country is likely to continue on this upward trend, though perhaps not on the scale noted in the last 12 months. According to the central bank’s forecast, GDP will grow 2.5% next year and 1.5% in 2019 and 2020. While this falls short of the 2017 increase, it remains above the estimated potential growth rate according to the country’s Ministry of Finance.

While the Ministry has stated that much of the growth predicted in the coming year will be driven by widespread domestic and foreign demand, there are a few key sectors which are worth recruiters keeping an eye on.

Leading sectors

Home to Nokia, Finland has been working to rebuild its status as a key player in the tech sector as it faces continued pressure from the likes of Apple and Google in the US. As part of this work, the government has been investing in tech start-ups while also working to encourage large multinational tech corporations to relocate to the country. This activity has put Finland back on the radar, with international money now flowing into the nation’s tech scene. With this comes the need for niche experts to support start-ups to make their way in the industry as well as contract professionals to aid the expansion of international brands.

The country is also known for its innovation in a number of sectors, including tech and finance. At the end of 2017, for example, the Finnish municipality of Sysmä announced plans to trial its own digital money in a move to keep up with the rise of cryptocurrency. Innovative investments such as this will certainly cause a spike in demand for specialist contractors in the digital banking arena – a skillset which is in short supply in the country.

Finland is also renown for having an unusual, but highly effective education system. Having made major reforms including moving away from the evaluation-driven model many European countries follow, the country has consistently ranked highly in global OECD and the Programme for International Student Assessment (PISA) league tables. Part of this innovation includes greater incorporation of tech into the classroom, driving demand for technology experts in this field.

Finnish exports to countries such as Germany, Sweden and Russia are currently thriving, so it’s perhaps no surprise that export-orientated industries are expected to grow in the near future. However, talent for many of these fields is in short supply, driving demand for expats in areas such as construction and manufacturing.

Placing contractors

Looking forward to the next 12 months, the likelihood of increased opportunities for contractors is certainly there. When you also consider that the nation is experiencing a dearth of talent due to a worrying retirement cliff – with the labour market losing around 110,000 people since 2010 as a result of a generation gap – it’s certainly safe to say that recruiters should be looking to Finland for contractor placements. But what do you need to know about the contracting field in the country?

As it currently stands, EU nationals do not need a work permit to operate here, while non-EU members do. While this is common across many member countries, there will of course be changes once the UK exits the bloc, so recruiters are likely to face new requirements when placing UK residents in Finland in the future.

Any contractor will need a fixed address in the country and will be required to register with the local office - the Maistraatti – within a week of entering Finland. Individuals will then be issued with a Finnish social security and tax number.

While tax requirements aren’t too dissimilar to other EU member states, recruiters need to ensure contractors are aware that tax is split into State tax, with a top rate of 31.75%, and Municipal tax that ranges from 16.5% to 22.1% depending on location. For self-employed contractors, social security is levied at 23% of the taxable income. Once a placement comes to an end in Finland, the contractor will be required to send a de-registration letter to authorities confirming their final day of work.

When it comes to selling Finland to a contractor as a destination of choice, there are a number of appealing factors ranging from it’s fantastic social, food and entertainment scene to access to some more natural wonders, including the Northern Lights. It’s also worth noting that the country is well-known to be a leader in gender equality. In the 2016 Global Gender Gap Report, carried out by the World Economic Forum, it was ranked as the second most equal country. The Economist has also awarded Finland third best country to be a working mum.

This commitment to equality extends beyond gender with the country becoming well known for its pledge to create a happier workforce. In fact, in a survey carried out by TotalMoney, Finland came fourth across the globe for its work-life balance, receiving high scores in the employee happiness category.

Clearly Finland holds a raft of potential for recruitment firms placing professionals overseas. However, don’t be lulled into a false sense of security when it comes to contractor compliance. The world of employment tax is becoming increasingly complex across Europe and recruitment firms would certainly do well to seek expert advice.

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