Ten to fifteen years ago, companies were heading to Estonia in search of cheaper costs, but they’re now seeking top talent and technology, says Pilvi Hämäläinen, Director of the Estonian Business and Innovation Agency’s Finnish office.

“About 6,000 Finnish-owned companies have been registered in Estonia, of which half are active. Companies in the technology and industrial sectors in particular are heading to Estonia in search of innovation and expertise,” says Pilvi Hämäläinen.

Hämäläinen is the Director of the Estonian Business and Innovation Agency’s Finnish office, which operates under the Estonian Ministry of Economic Affairs and Communications. One of its tasks is to help Finnish companies expand into Estonia and Estonian companies expand into Finland.

“The Estonian Business and Innovation Agency is Estonia’s largest support organisation for businesses. Regardless of their country of origin, companies registered in Estonia will receive all of the business support services on a one-stop-shop basis.” The Estonian Business and Innovation Agency assists companies with exports, investments, innovations and more. Business grants and loan guarantees are also available.

What services are available to Finnish companies?

Hämäläinen’s office is located in the Embassy of Estonia in Helsinki. She is Finnish, which enables her to provide Finnish-language services to companies with questions about Estonia.

“We share Estonian market information with Finnish companies, as well as information about the different types of support companies can apply for. We also provide consultancy services to help companies find partners.”

Hämäläinen says that they also organise a variety of networking events and, in collaboration with the Ministry of Economic Affairs and Communications, organise trips between Finland and Estonia to promote exports.

The organisation wants to help Finnish companies expand into Estonia, and particularly those in the high-tech, artificial intelligence and health technology sectors.

Why is maritime transport so important?

In January 2024, Estonia was Finland’s eighth largest import and export country. Finland has been Estonia’s largest import and export country for many years.

“If we didn’t have such excellent ship connections between Finland and Estonia, we wouldn’t have this kind of trade relationship either. Ferry connections are vital, and nothing could replace them.”

Finnish-based companies are definitely major employers. There are a lot of companies in the industrial, service and IT sectors.

Hämäläinen is also aware of the importance of maritime transport for tourism, as Visit Estonia, which promotes tourism in Estonia, also operates through the Estonian Business and Innovation Agency.

She says that Finnish tourism in Estonia is changing. Finnish companies are increasingly interested in organising recreational and conference trips to Estonia.

“Estonia is continually seeking to develop new tourism services. The number of retirees who are travelling is inevitably decreasing, but they’re being replaced by families, young adults and conference travellers.”

How do Finnish and Estonian companies differ?

It is often said that Finland has a small domestic market. But Estonia’s is even smaller. This means that whenever an Estonian company is established, it immediately starts seeking growth from abroad. The country is known for its startup successes.

An Estonian company typically looks to the country’s largest trading partners: Finland or Latvia.

“There is a clear difference between Finnish and Estonian companies. When Finnish companies launch exports, they are usually more mature and have been active in their domestic market for a long time. Estonian companies are the opposite. They are born to be international companies that have to go global from the outset.”

Are Finnish investors active in Estonia?

Hämäläinen says that Finns have been actively investing in Estonia throughout the country’s period of independence. Finnish investments have flowed into real estate, industrial manufacturing, wholesale and retail.

“If you think about employment and the number of jobs available, Finnish-based companies are definitely large employers. There are a lot of companies in the industrial, service and IT sectors.”

Estonians have also shown enthusiasm for investing in Finland.

“In recent years, there’s been a trend for Estonians to invest in Finland through acquisitions. For example, Skeleton Technologies acquired Varkaus’s battery plant and the Harju Elekter Group has expanded through several acquisitions,” she says.