Finland offers a window of business opportunity to Russian entrepreneurs

What inspires young and promising Russian startups to head across the border and settle down in Finland is much more than geographical proximity.

Before setting up their telecommunications company, Siltatel, in Helsinki at the start of 2019, Russia’s Fedor Rozhnov and his fellow co-founders considered some other locations, including Ireland and Estonia.

“In the end, our choice was made in favour of Finland based on a wide range of factors,” says Rozhnov, who is the CEO of the company. “The local business climate and business services, paired with the standard of living that the country offers, are much better than those that we got to experience elsewhere.”

For the company, which provides mobile operators with new e-SIM and blockchain Hyperledger-powered technological solutions for worldwide roaming services at close to domestic prices, being based in Finland was also a matter of reputation and pride, in a sense.

“In the same way as Switzerland is famous for its watches and France is for its wine, Finland has always been considered the global telecom leader,” Rozhnov notes, adding that the Nordic country also serves as an excellent pilot market for tech products.

The gateway to Finland

Since early 2018, when Finland launched the Startup Permit, it has become much easier and less stressful for international entrepreneurs coming from outside the European Union to move to and build a company in the country.

The eight-strong Siltatel team was among the first to fully enjoy the benefits of the initiative. So too were the Russian founders of Megawatt, a company that provides logistics services with all-electric autonomous vehicles.

According to co-founder Anton Poppel, Finland was chosen as the base for expanding Megawatt’s business to Europe due to its accommodating climate for foreign business founders, the fast and trouble-free process of registering a company, as well as the availability of local hardware partners.

“The Startup Permit was of great help,” echoes Rozhnov. “With the granted status, we could easily deal with all Finnish authorities and banks regarding the registration of our company and could access some local services that would have been out of our reach otherwise.”

Much-needed support

For many Russian companies, the path to Finland and beyond is conveniently smoothed by Business Finland and various regional business consultancies and accelerators. These include Helsinki Business Hub and Cursor. The latter is located close to the Russian border in the Kotka-Hamina region and was recently recognised by Finnish President Sauli Niinistö for its significant international impact.

“It is no secret that all countries now are competing for new innovative business projects,” explains Karen Grigoryan, head of Business Finland’s Invest in Finland operations in Russia. “The faster and the more efficiently we can present Finland as an attractive business hub and prove our capability to assist on the way, the more likely companies will choose Finland. It always requires a major team effort.”

According to Grigoryan, the decisive factors for many businesses in choosing Finland as their headquarters in Europe and starting point for their foray into the EU are the country’s political and economic stability and diverse expertise.

Another crucial thing, he adds, are rich opportunities for networking and building a dialogue with potential partners, as well as a multitude of international business events, with Slush being a bright example.

“This year’s Slush was just astonishing,” Rozhnov concurs. “It is yet further proof of how much Finland has to offer in terms of networking.”

More Russian talent to follow

With such companies as the aforementioned Megawatt, as well as Acoustic Extra Freezing, Megano and Yandex, with its taxi service Yango, setting a successful example, it is only natural to expect that more Russian businesses will attempt to gain a foothold in Europe via Finland.

“We’d like to use Finland as an outlet to the European market,” says Dmitry Vasilev, co-founder of Karfidov Lab, which specialises in engineering consultancy and product design services.

The company has received frequent requests from clients based in Germany, Austria and Great Britain, among others, which has given the management pause on expanding into Europe. To help facilitate its access to the European market, this year the company was invited to Slush by Helsinki Business Hub and introduced to LADEC, which assists entrepreneurs and businesses in Finland’s Lahti region.

Also present at Europe’s leading startup event was the winner of this year’s GoTech Arena Finlanding competition in Moscow, ProOnline Enterprise. The company offers an omnichannel e-commerce solution for retailers to generate online sales and is planning to open offices in Finland and the Chinese city of Shenzhen.

“As Europe is not logistically limited [by borders], being based in a specific EU country gives the company access to the entire European market,” notes CEO Pavel Zhdankin. “Finland was chosen due to its geographical proximity and the activity of Finnish organisations in Russia.”

Good News from Finland and Invest in Finland are part of Business Finland