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Selling

In this page: Market Access Procedures | Distributing a Product

 

Market Access Procedures

 

Customs Procedures

Import Procedures
A customs declaration for imported goods is submitted on the SAD form (Single administrative document) for VAT levy.

As part of the 'SAFE' standards advocated by the World Customs Organisation (WCO), the European Union has set up a new system of import controls, the 'Import Control System' (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system has been in effect since 1 January 2011. Since then, operators are required to submit an Entry Summary Declaration (ENS) electronically to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
Specific Import Procedures
The Åland Islands have a special status in terms of customs and taxation. Taxation provisions on taxation within Finland cannot be applied when delivering goods from the Åland Islands to mainland Finland, but provisions on import from outside the EU must be applied. The Finnish Customs provides more information.
Importing Samples
May qualify for duty free entry if:
- They are of negligible value (EUR 6 or less);
- They are for solicitation of orders for the goods of the kind represented by the sample;
- There is not more than one sample of each style or quality in a consignment;
- The goods are supplied directly from abroad;
- They will be consumed or destroyed during demonstration and are packaged and properly marked in a manner which precludes their being used as other than samples (i.e. foodstuffs, non alcoholic beverages, perfumes and chemical products).
 
 
 

Customs Duties and Taxes on Imports

Customs threshold (from which tariffs are required)
EUR 150
Average Customs Duty (Excluding Agricultural Products)
The duties for non-European countries are relatively low, especially for manufactured goods, ranging from 2.61% or 4.17%. However, textile and clothing items still have high duties and quotas. For more information, the European Online Customs Tariff Database (TARIC) should have the most up to date information.
Products Having a Higher Customs Tariff
Relatively high tariffs apply to textile, automobile, consumer electronics, cereal, meat, dairy, sugar, alcohol, footwear, rubber, plastic & metals.
Preferential Rates
In the framework of several agreements that the European Community has concluded with third countries, as well as in the framework of autonomous preferential arrangements for some beneficiary countries, tariff concessions are provided for a pre-determined volume of goods. These tariff concessions are called "preferential tariff quotas". Click here to visualize preferential agreements by county.
Customs Classification
Finland, like most member states of the European Community, bases its Harmonised Tariff Schedule on the TARIC (Integrated Tariff of the European Community), which is issued by the Commission and the Member States for the purpose of applying EU measures relating to import and exports, and when necessary trade between member states. The TARIC also serves as a basis for the working tariffs and tariff file of Finland and other Member States.
Method of Calculation of Duties
Finland customs values shipments at CIF prices. Import duty rates are divided into two classifications: Most Favored Nations (MFN) and General one. Import duties are calculated on ad valorem basis.
Method of Payment of Customs Duties
The tax is paid to the tax office using a monthly declaration.
Import Taxes (Excluding Consumer Taxes)
None
 
 

Labeling and Packaging Rules

Packaging
See EU restrictions for packaging.
Languages Permitted on Packaging and Labeling
Packaging and labeling information has to be both in Finnish and in Swedish.
Unit of Measurement
Metric units.
Mark of Origin "Made In"
The marking "made in (country), "product of (country)", or other words of similar meaning must appear in close proximity to and in comparable size letters of the other locality to avoid possible confusion.
Labeling Requirements
The CE conformity marking is required to be displayed on regulated products offered for commercial sale on the European market. Labeling and marking requirements in Finland are based on the Act on Product Safety, which was enacted in accordance with the EU directive on general product safety. The following information should be included in retail packaging, or otherwise marked on the product (a sticker, label, etc.):
- Name of the product (indicating clearly the contents of the package);
- Name of the manufacturer or the name of the company that had the product manufactured;
- Amount of contents (weight or volume of the contents to be specified, measures in metric system).
Specific Regulations
- Finnish law prohibits import of whale meat and PCB/PCT chemicals used in transformers and condensers causing problem wastes.
- EU legislation distinguishes environmentally friendly products and services through a voluntary labeling scheme called the Eco-label. In addition, the Ympäristömerkki is a neutral and reliable Nordic environmental label.

Distributing a Product

 

Distribution Network

Types of Outlet

Department stores
Clothing, cosmetics, jewellery, food
Stockmann, Sokos, Anttila
Hypermarket
Food supermarkets with varying range of other product categories
Prisma, Citymarket, Euromarket
Supermarkets
Food (+ limited range of other products)
S-market, K-market, Valintatalo, Alepa, Lidl, Sale
Convenience stores
Supermarkets or kiosks with extended opening hours.
R-kioski, Siwa, ABC (in connection with gas stations)
General stores
Home equipment, tableware, casual clothing, cosmetics, sweets etc.
Hong Kong, Vapaa Valinta, Tarjoustalo
Alcoholic beverages
Retail of alcohol (monopoly)
Alko
Specialized stores
Specialized by product or by type of customer targeted.
Clothing: Halonen, Aleksi 13
Footwear: Andiamo, K-kenkä
Bookstores: Akateeminen, Suomalainen
Electronics: Musta Pörssi, Markantalo, Gigantti, Tekniset
 

Evolution of the Retail Sector

Growth and Regulation
Finland is a prosperous Northern European country. It has a strategic location on the interface between the markets of Russia, the Baltic and Nordic countries. Indeed most of the transit trade from the EU to Russia already passes through Finland. The Finnish retail market can be characterised as a stable market, relatively small with 5.49 million inhabitants but highly urbanized : 68% live in towns or urban areas. According to the Federation of Finnish Commerce, the retail sales reached 10% of the GDP in 2016, around US$ 4 billion. The Oxford Economics projected a retail sales' growth of 2.0% for 2017, the same for 2018.

Finland is not too well known for its high streets as the consumers tend to be keener on doing their shopping in shopping centres, especially in northern cities. According to the Finnish Council for Shopping Centers, there are 87 shopping centres in Finland.  The majority of high street shopping locations can be found in the largest cities. Due to the sparsity of high street locations in Finland, retail units are highly sought after.

Finland has several retail outlet areas located all over the country, typically just outside city centres, with just under 700 outlet stores in total. Traditionally, retail outlet areas in Finland consist of big box stores that are located in close proximity of one another. The retail park segment, however, consists mostly of furniture retailers and other home or household-related retailers, as well as sport equipment retailers.

According to recent figures, the e-commerce has witnessed rapid growth and has become a viable option for Finns, whether it is for retail, grocery or other products. The increasing interest towards e-shopping has forced offline retailers to contemplate developing their own e-shopping platforms in order to maintain customer satisfaction. Additionally, the increasing use of e-shopping has fostered more price-conscious shopping behavior in customers who now have the option between online and traditional retail.
Market Shares
Goods may be sold through an agent, distributor, established wholesaler, or selling directly to retail organisations. The main sectors of the Finnish economy are dominated by oligopolies.
Consumables for everyday use are marketed by an integrated system of distribution with a total of 3,879 stores in 2016, dominated by two big groups:
-    S Group (brands Prisma, S-Market, Alepa) with a 47.2% market share, around EUR 7,900 million sales in 2016
-    K Group (brands K-citymarket, K-market, K-Supermarket) with a 36.2% market share, around EUR 6,055 million sales in 2016
-    The german discounter Lidl is the third player, with a 9.3% market share, around EUR 1,551 million sales in 2016.
Retail Sector Organisations
Federation of Finnish Commerce
 

E-commerce

Internet access
Finland has an internet penetration rate of 92.5%, among the highest in the world. The use of internet is widespread among all age groups: 93% of 16-24 year olds, 96% of 25-34 year-olds and 96% of 35-44 year-olds log on daily. The older generations also log on regularly with 45-54 year-olds and over 55s showing a 90% and 70% daily penetration rate, respectively.
In the search engines market Google gets close to a monopoly, with a share of 96.6%. Bing and Yahoo have negligible shares (1.9% and 0.7% respectively).
E-commerce market
There are currently 3.32 million e-commerce users in Finland, with an additional 530.000 users expected to be shopping online by 2021. 90% of online shoppers in Finland buy via desktop, whereas the number of people buying via smartphones or tablets is still below 10%. While the use of mobile devices for purchasing is still low, trends show an increase in mobile commerce, especially amongst millennials.
Finns rely heavily on foreign retailers for online purchases, and it is estimated that almost 50% of online shoppers have made purchases abroad. The top 3 product categories purchased from international retailers are clothing and footwear (especially for women), home electronics, and media.
The top sites for online shopping in Finland are tori.fi, verkkokauppa.com, eBay, oikotie.fi, and kela.fi.
Recently there has been a rise of C2C sales of consumer goods and online services, the main platforms being online marketplaces such as Tori.fi and Huuto.net.
On 1 January 2015, a reform of the Finnish regulation on information society came into effect. The Information Society Code sets regulations on e-privacy, consumer protection, communications networks, and data security. It aims to promote consumer protection, data security, simplified procedures, and equal opportunities for service providers in the market.
E-commerce sales and customers
In 2017, the Finnish B2C e-commerce turnover reached EUR 9.8 billion, a 15% growth compared to the previous year. Fashion is currently the leading product category, accounting for USD 1.42 billion, followed by electronics & media, which generates USD 1.04 billion in sales (Statista).
When purchasing online, Finns spend the most on home technology and clothing purchases, and electronics are popular products to be bought online. When it comes to purchasing services online, the most popular were travel tickets, package tours, and accommodations.
The two largest drivers for Finns to shop online are the greater variety of goods and lower prices. Among younger generations consumer reviews and recommendations from friends have a strong influence on the purchasing process, whereas for older buyers having also the possibility to visit a physical store before buying online can be a plus.
The leading payment methods for online shopping in Finland are credit or debit card (with a total share of 32%), followed by direct payment via bank transfer, invoice and Paypal. Mobile payments have increased considerably: in 2017, 34.41% of payments were made using either a tablet or a phone, compared with 27.43% in 2016 (PayTrail).
Social media
In 2017 over 66% of the Finnish population aged 18 to 64 was active on social networks, nevertheless active social media penetration - referring to not only registered social media users but also those who actively log into social media services on a monthly basis - in Finland amounted to a little over 50% (Statista). This rate is considered low when compared to Northern European and Scandinavian standards.
The main social media platforms are Facebook (75%), YouTube and Google+. LinkedIn and Twitter are each used by roughly 20% of Finns. The messaging service Whatsapp is widely used, especially among younger generations, were the penetration rate is at around 88% (compared to 56% of Facebook Messenger).
 

Distance Selling

Evolution of the Sector
According to the World Federation of Direct Selling Associations, Finland had USD 213 million in direct retail sales during 2016, a 2.4% growth compared to 2015. The industry also has 83,868 independent representatives. Euromonitor International states Finland's social welfare system prevents direct selling from recruiting effectively. The country is also known for its bureaucratic obstacles. Up to 86% of independent representatives are female.

Direct selling has decreased in the last decade as Internet sales have increased. The market includes many small companies that are relatively small compared to retailers in other distribution channels. Furthermore, these companies are mostly from the US or Sweden. The industry is regulated by the Finnish Direct Marketing Association.
 
 

Commercial Intermediaries

Trading Companies
 
  • Type of Organization
Most of the larger importers and trading houses are members of the Federation of the Finnish Commerce (Suomen Kaupan Liitto), which is a central organization of 10,000 companies as well as trade associations covering the bulk of foreign goods sold to Finnish trade and industry.
  • Main Actors
For more information on certain trading houses, see  the Association of Finnish Technical Traders website or the Compiler Trade Portal.
Wholesalers
 
  • Type of Organization
Most of the larger wholesalers are members of the Federation of Finnish Commerce and Trade (Suomen Kaupan Liitto), which is a central organization for 40 trade associations covering the bulk of foreign goods sold to Finnish trade and industry. The members of FFCT are particularly strong in certain specialized sectors such as electronics, electric components and instruments, pharmaceutical and health care products, technical products and machinery, raw materials and chemicals.
  • Main Actors
Kesko,Inex Partners, third largest daily goods retailer in Finland
Useful Resources
Federation of Finnish Commerce and Trade
The Confederation of Finnish Industries (EK)
 

Using a Commercial Agent

The Advantages
More realistic marketing strategy for a small or medium-sized firm. Import agents are often appointed as sole agents for the entire country.
Where to Be Vigilant
In selecting a representative, the importer should check whether that company handles competing products. Due to a relatively small market and long distances, we recommend that a local agent/distributor with sales network covering all of Finland be appointed.
Elements of Motivation
Only one local distributor needed.
Breach of Contract
For a fixed term (agreed and written in the contract) or for an indefinite period that remains valid throughout time of stay.
Finding a Commercial Agent
The Finnish Foreign Trade Agents' Federation, List of established agents

Learn more about Traders, Agents in Finland on Globaltrade.net, the Directory for International Trade Service Providers.

 

Setting Up a Commercial Unit

The Advantages
Setting up a business in Finland is quick and easy.
Where to Be Vigilant
Licenses are required for foreigners from outside the European Economic Area (EEA) to serve as a founder, board member or managing director in a limited company, or to join a partnership.
Different Possible Forms of Settlement
 
  • A Representative Office
Such an office can obtain market data and other information as well as provide necessary promotional and service support, but cannot serve as a commercial trading unit.
  • A Branch Office
If the corporation or foundation is from outside the EEA, it must apply for a permit from the National Board of Patents and Registration (NBPR) for the establishment of the branch. The branch must submit a basic declaration to the trade register maintained by the NBPR. Although foreign companies may operate in Finland through a branch, this does not offer any special advantages. A branch must conduct its accounting and bookkeeping in the same manner as a Finnish corporation, except that its financial statements need not be audited if the overall books of the foreign company are being prepared, audited and disclosed to the public according to EU provisions (or in a similar manner).
  • A Company
Foreign-owned firms can choose the limited company form, which requires entry in the Trade Register, a process that takes about one week to complete. One or more persons or organizations resident in countries of the EEA may establish a limited company. Non-EEA residents may form a limited company with permission from the Ministry of Employment and the Economy.
 

Franchising

Evolution of the Sector
According to the Finnish Franchising Association, the Finnish franchising market represented over $4.5 billion, with close to 250 franchising systems operating close to 7,000 units around the country in 2016. The annual growth rate in terms of revenue is expected to be 7.3% for 2017.Finland's franchising market is 71% domestic origin.
Population density in urban areas, changes in economic and social factors, and the continuously active field of franchising indicate that franchising will continue expanding into new business areas.  Growing demand in the services sector along with increased interest in self-employment will foster many new franchising opportunities.

The services sector, which includes consumer and B2B services, is the fastest growing and offers the best market potential for new franchise businesses, but interest towards restaurant/ coffee business is rising. In 2016 out of new chains 55% were in services, 15% in retail and 30% in restaurants.  
 
There is no special legislation covering franchising.  The most important of the statutory regulations are the Contracts Act, the Unfair Business Practices Act, the Trademarks Act and the Competition Restrictions Act.
The Finnish Franchising Association's Code of Ethics (updated as of Jan 1st, 2017) also sets a good framework for franchise agreements.
Some Big Franchises
R-kioski
Kotipizza
Café Picnic
Subway
Avis
Mac Donald
Faunatar
For Further Information
The Finnish Franchising Association (in Finnish)
Franchise News
 

Finding Assistance

Export Trading Companies
Database and information source on Finnish export industry
 
 
 
 

Learn more about Sales in Finland on Globaltrade.net, the Directory for International Trade Service Providers.

 

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Last Updates: May 2018