Finnish Startup Community's goals for the next governmental program: crypto legislation, platform economy and climate startups

Finnish Startup Community’s CEO Riikka Pakarinen at an SSY breakfast reception in Helsinki on 21st of April 2022 announcing the FSC’s goals for the next governmental program.

The Finnish Startup Community announced today its new, community-driven policy goals for the future governmental program. The community’s political goals stem from the community’s nearly 130 member companies, including Finland’s largest growth companies and the early-stage startups. These goals summarize the wishes and concrete ideas of the Finnish startup ecosystem for Finnish policymakers.

The goals are divided into seven main themes, under which the Community has listed more concrete proposals and ideas for policymakers. The new goals range from reviewing legislation for the platform economy to adding more English-speaking school places in Finland. In addition, the Community emphasizes the possibilities of supporting more Finnish climate technology, creating more flexible share exchange arrangements and developing the legislation on cryptocurrencies.

“We have listened to and asked Finnish startup entrepreneurs at different stages about what we could do better in Finland to support their growth journeys”, tells Riikka Pakarinen, the CEO of Finnish Startup Community. “Our top goal is to make Finland the best place in the world for the best talent – and that Finland is more attractive than Silicon Valley to start and grow a startup company. In this way, the Finnish startup sector can grow into a new central pillar to support the Finnish economy, bringing it jobs and tax revenue.”

“We believe that by 2030, Finnish startups and growth companies will become the country’s new economic backbone – alongside the forest and metal industries – also in exports and relation to GDP, making it one of Finland’s most important economic sectors”, explains Timo Ahopelto, Chairperson of the Board at Finnish Startup Community.

“We hope that these goals reflect our values: we are excited and feel positive about the opportunities around us and genuinely believe that we can go far with cooperation. Our goals are definitely ambitious, we believe that they are achievable”, concludes Pakarinen.

FSC’s policy proposals in short

1. Finland is the best target country in the world for labour migration

The competition for skilled folks has become global. “Just good” is not enough anymore. Finland must be the best place in the world to relocate to for work.

A two-week service promise should be provided and secured for foreign talent and their families. The realization of this should be measured systematically from the moment the applicant submits their application to the system. This easy and smooth process should include identification, obtaining a work permit, and all other practical steps from opening a bank account to a personal social security code. In addition, the identification process of a foreign specialist must be developed further and a digital identity project implemented. Finally, service paths need to be streamlined and English-language school student slots need to be added for families of international talent.

2. Competence and RDI

Expenditure on research and development must be raised to 4% of Finland’s GDP, as proposed by the parliamentary RDI policy group. In order to achieve this goal, in addition to public funds, the focus must be on activating private R&D investments.

Increasing private R&D investment means that both Finnish and foreign companies will focus their R&D operations in Finland. The other proposals of the working group must be implemented as soon as possible.

In Finland, the amount and scope of education that meets the needs of modern working life must be raised to be the best in the world. Students from abroad must be employed in Finland faster – we need to attract them to stay even better than before. Coding and entrepreneurship should be added as optional subjects for all from primary school onwards. We also need to add more technology students’ admission slots to universities and colleges.

More needs to be invested in top researchers. Teams have to be built around them – they are capable of solving the most difficult problems in their respective fields. Top research and the best partners and collaborators in the world go hand in hand.

3. Startups are a solution to climate change and health technology challenges

Startups that solve climate change challenges play an important role in Finland’s positioning as a pioneer in sustainable development. There are many Finnish startups in the areas of plastic recycling and new energy, for example.

By investing in environmental technology, methods of economic production can be developed so that we do not have to choose between economic growth and environmental sustainability.

Being at the forefront of environmental technology means significant financial gains to those who are the first to develop the best innovations. A significant cluster of top environmental experts is already cumulating in Finland. This development must also be supported more systematically through public investment and international cooperation.

4. The Platform Economy needs clearer rules of play

We need to create legislation in Finland that both supports new forms of work and defines the area in a sustainable way.

Startups, and especially companies in the platform economy, are bringing new ways and models to the economy. Business policy and regulation should enable and encourage the reform of operating methods, taking into account social and ecological conditions. The Finnish regulation in the telecommunications sector, which was implemented before its peak time, is an excellent example of this.

5. Tax incentives

Finland needs to study tax incentives to attract international companies and experts.

Although we do not encourage tax competition, Finland needs to look at models that attract companies to establish themselves in our competitor countries. The reality is that unless Finland gets competitive, jobs will be created elsewhere and the Finnish economy gets nothing.

The Finnish government should review the fiscal policy decisions of rival countries to support the creation of high-productivity jobs. In the startup field, it is important that the domestic market has time to create a critical mass of companies and jobs that work together under the same ecosystem. In order for this critical mass of companies and jobs to be created in the domestic market, fiscal policy decisions are needed to support growth.

6. Review and interpretation of the legislation on blockchains and cryptocurrencies

Legislation is needed on blockchain and virtual currencies to both support startups operating in these sectors and enable them to settle in Finland.

Blockchain technologies are part of the Internet of the future. They are important to the gaming industry, which is a significant player in Finland. Regulation in the sector is taking shape, while companies in the sector are already growing at a rapid pace. Countries that are now able to seize regulation of the sector have the opportunity to create benefits for their country similar to the first revolution in the telecommunications sector in the 1990s – which was e.g. the origin of Nokia’s success story.

7. Flexible share exchange arrangements should also be possible with the EFTA countries and the United States

In mergers and acquisitions where the purchase price is made in a share transaction with a company located outside the EU, the tax sanction should only take effect when the shares received in return are sold. Under current Finnish legislation, in tax transactions with a company located in the EU, the tax sanction does not take effect until the shares received are sold. Finnish tax legislation should be amended so that the regulations applicable to EU regions also apply to the EFTA countries and the United States.

Read more about the proposals here.

Source: Finnish Startup Community