Foreign affiliates in Finland: documentation of statistics

The statistics describe the activities of foreign affiliates located in Finland. The data can be used to assess the global networking of enterprises, which is part of the globalisation process.  The data are also used to describe the ownership structure of enterprises operating in Finland, and to assess their attractiveness to foreign enterprises and other institutions.  The statistics are based on Regulation (EC) No 716/2007 of the European Parliament and of the Council.

All foreign-owned enterprises engaged in business activities in Finland constitute the population of the statistics on foreign affiliates in Finland. An enterprise is classified as international if the institutional unit that controls it is located outside Finland.

The statistical population is built by obtaining the data on foreign affiliates from the business statistics system of Statistics Finland. The number of rows in the resulting data is equal to the number of enterprises listed in the statistics for the statistical year. The columns of the company-specific row consist of the data on legal units, which are obtained from administrative records (incl. data supplied by the Finnish Tax Administration), data directly collected from enterprises by Statistics Finland, and data produced on the basis of estimation methods. A legal unit is a concept created for administrative requirements, and it does not always correspond to the concept of enterprise used in everyday language or economics. Enterprises are selected for the statistics if they are market-based and have had personnel, turnover, investments and balance sheet during the statistical reference year.

The statistics on foreign affiliates in Finland are based on enterprise units. According to Statistics Finland’s definition, an enterprise is a unit with decision-making autonomy, which produces goods and/or services for sale in the market. An enterprise may comprise one or more legal units. If an enterprise comprises more than one legal unit, transactions between the units have been eliminated.

EUR million, per cent and number of personnel are used as the units of measure in the statistics’ database tables.

The statistics on foreign affiliates in Finland are not index-based. The data are specific for each year.

The calendar year is used as the reference period for the statistics on foreign affiliates in Finland. The data are for the accounting period ending during the statistical year.

The statistics cover foreign-owned enterprises in the whole of Finland.
 

The objective of these statistics is to identify the foreign affiliates operating in Finland as well as the institutional units that control them. The countries of residence of the controlling bodies are also defined in the statistics.  The data on foreign affiliates are supplemented with unit-level data from other data files of Statistics Finland, such as turnover and number of persons employed.

From 2021 onwards turnover and value added are published for financial and insurance activities (TOL K) on top of the number of enterprises, turnover and the number of personnel.

The statistics cover a calendar year. The published statistics are final. Statistics on foreign affiliates in Finland have been published since 2003.

The statistics for the period from 2013 to 2017 were based on legal units. The most recent data (for 2018) are not fully comparable with earlier years, because enterprise unit is now used as the statistical unit. An enterprise is a unit with decision-making autonomy, which produces goods and/or services to be sold in the market. An enterprise corresponds to a legal unit if the legal unit is not part of an enterprise group. Otherwise, the enterprise is an enterprise group or its part. The group of statistical units in the structural business and financial statement statistics was expanded year 2023. Previously, only enterprises having operated for at least six months in the statistical reference year and whose turnover, number of personnel, investments or balance sheet exceeded the statistical limit were included in the statistics. Limitations concerning the operating time and size of enterprises have been removed from the definition of statistical units. Annual data contained in the statistics can be found on the website of the statistics and in Statistics Finland’s StatFin database with renewed statistical units for the period from 2018 onwards.

The definition of an enterprise is based on the EU Regulation on statistical units (EEC) 696/93.

The statistics are published in December each year on Statistics Finland’s website. 

The operationalisation of the concept of enterprise into more easily measurable legal units affects the accuracy of the statistical data. For example, enterprises often convert their operations into separate companies, meaning one enterprise may comprise more than one legal unit. In that case, the category ‘number of companies’ does not give the correct picture of the actual number of enterprises. Moreover, data are not collected from all enterprises, which means that personnel and turnover data are partly estimated on the basis of a statistical model. The uncertainty arising from the results of a sample survey based on a single data collection can be easily estimated. At the same time, these statistics are based on data obtained from several sources and estimations supplementing them, which makes it difficult to calculate uncertainties.
The accuracy of the data is also affected by the overhaul of Statistics Finland’s business statistics system and the changes in the statistical criteria connected with it (see the section on comparability below). The accuracy of the data is also affected by the timetable of the production process overhaul, as a result of which Statistics Finland was unable to check the data on small enterprises as comprehensively as previously.

Statistics Finland has updated the production of its business statistics. The data for 2018 and the years before it contained in the statistics on foreign affiliates in Finland cannot therefore be fully compared with the most recent releases of the same statistics. The data contained in the statistics are published on the basis of enterprise units instead of legal units (Business ID), as previously. For the first time, these data were available for the 2018 statistical year.

The purpose of an enterprise unit is to describe economic units instead of administrative structures. Legal group units (Business ID) can form the basis for one or more enterprise units. For enterprises outside groups, an enterprise unit always corresponds to a legal unit. An enterprise unit corresponds to the smallest group of legal units that comprises an independent decision-making production unit. Business transactions taking place within enterprise units have been eliminated, which means that industry-specific data differ from the data based on legal units (data based on Business ID).

Data are collected and checked 11 months after the end of the statistical year. Final data are published 12 months after the end of the statistical year.

There are no delays in releasing the data contained in the Foreign affiliates in Finland statistics. The data are published on the days given in the release calendar.

The data cover all foreign-owned companies in Finland. The data contained in the statistics are based on the Finnish Accounting Standards (FAS) and the international industrial classification. The data transmitted to Eurostat are internationally comparable

The group of statistical units in the Foreign affiliates in Finland statistics was expanded year 2023. Annual data contained in the statistics can be found on the website of the statistics and in Statistics Finland’s StatFin database with renewed statistical units for the period from 2018 onwards. The change causes a break in the time series compared to old data. The effect of the new statistical units on variables other than the number of enterprises is mainly quite marginal, but can affect to some of the variables.
The statistics for the period 2013 to 2017 are based on legal units. The most recent data (for 2018) are not fully comparable with earlier years as enterprise unit is now used as the statistical unit. An enterprise is a unit with decision-making autonomy, which produces goods and/or services to be sold in the market. An enterprise corresponds to a legal unit, if the legal unit is not part of an enterprise group. Otherwise, the enterprise is an enterprise group or its part.

The definition of an enterprise is based on the EU Regulation on statistical units (EEC) 696/93.

The measurement period for the statistics on foreign affiliates in Finland is the 12-month accounting period. The accounting period is not always the same as the calendar year.

The Business Register of Statistics Finland is used as the framework for the statistics. It gives a comprehensive picture of the structure and activities of enterprises operating in Finland. Another important source of information, the Enterprise Group Register maintained at Statistics Finland includes data on ownership and control of enterprise groups, but comprehensive data on foreign ownership and/or control of all enterprises are not available from administrative files. The data from a range of different sources are therefore combined. Data on control are updated by following economic and financial news (e.g. corporate acquisitions), enterprises’ Internet pages and annual reports. Enterprises are also asked to supply details of their ownership structure as part of Statistics Finland’s financial statements inquiries. Administrative data obtained from the Bank of Finland, and Invest in Finland, which comes under the auspices of the Ministry of Economic Affairs and Employment, are also used in the updating of the statistics. The EuroGroups Register of Eurostat is also used in the updating process.

Data for Statistics Finland’s own data collections are collected with a web questionnaire. In addition, under an agreement between Statistics Finland and the Finnish Tax Administration, the latter agency delivers the business tax data to Statistics Finland on the agreed dates.

The web questionnaire of the financial statements inquiry has been tested in connection with its introduction, and when changes have been made to it. Based on customer feedback, the instructions for the questionnaire have been specified.
The non-response of the inquiry is monitored yearly.

The administrative data are updated each year.
 

The data for the statistics on foreign affiliates in Finland are compiled on the basis of the structural business and financial statements statistics by selecting subsidiaries in foreign ownership from it. The data contained in the structural business and financial statements statistics are processed as follows:

Processing of business tax data
The quality of the Finnish Tax Administration data is verified programmatically. The data are revised automatically by means of mass editing and imputing. Values missing from the data are replaced in the first instance with data for earlier years, and in the second instance, with data on enterprises in the same category in terms of turnover and number of personnel. Errors and outliers are corrected either by means of logical editing or by removing outliers. Minor turnover errors (less than five per cent) are scaled.

Two different imputation methods are in use. Donor imputation is used when the enterprise is included in the statistical frame, but no data are available in the material provided by the Finnish Tax Administration. In such cases, the data are obtained from enterprises of a similar size operating in the same industry. The second method is used when no tax data on the enterprise can be obtained for the statistical year in question, but the data for the previous year are available. In such cases, the data are imputed by using changes in turnover in the periodic tax data as a weighting coefficient.

Own inquiry
Sample responses are processed manually together with the business tax data for each enterprise separately, using the image archive of the Finnish Patent and Registration Office.

Checking of the additional data on financial statements is guided by internal production application rules.
Using approved data as a basis, industry-specific coefficients are calculated for turnover specifications and expenditure specifications. The coefficients are used to produce corresponding data for the entire group of enterprises.
All enterprises in the random sample that have received only a small number of penalty points are approved en masse. Some of them are returned to manual checking.

The data are analysed and checked at the level of units and aggregate data by comparing them with the previous year’s data, enterprises’ annual reports and other source material. The details of the country of origin are specified on the basis of the EuroGroups Register.

Statistics Finland

Economic Statistics

The compilation of the statistics on foreign affiliates in Finland is also guided by the following legislation:
Regulation of the European Parliament and of the Council (716/2007), and the provisions specifying it. Eurostat published the document Foreign Affiliates Statistics (FATS) Recommendations Manual, 2012.
Council Regulation (EEC) No 696/93 on statistical units applies to statistics on business activities.
The Standard Industrial Classification 2008 is based on the European Union’s common industrial classification, NACE Rev. 2, supplemented for national needs on the fifth level.
Regulation on business registers 177/2008.

Data contained in the statistics are published at aggregate levels. Of the variables used in the statistics, the number of enterprises, number of personnel and the industry are publicly available. Other data are subject to confidentiality provisions.
The threshold value rule is used in the statistics to assess the disclosure risk of data for all industries. All protected data are suppressed. In primary suppression, data on an individual industry group are protected by suppression if the group has data on one or two enterprises. In secondary encryption, the data are suppressed to ensure the primarily protected data cannot be derived.
The same encryption rules apply to the information services and stricter encryption can be applied on a case-by-case basis.
The data transmitted to Eurostat that are subject to primary and secondary encryption are indicated with codes.

Data contained in the statistics on foreign affiliates in Finland are published annually on the statistics’ website and in the StatFin database.

The data are also submitted to the information service subject to charge and the research services.
In addition, industry-specific data are also transmitted to Eurostat, which publishes the data on its own website.

Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.

In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.

Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.

Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.

Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.

The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.

Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.

The quality of the statistics on foreign affiliates in Finland is examined as the data accumulate. At aggregate level, the data are compared with the previous year and the most significant changes are examined.

The statistics on foreign affiliates in Finland are an official set of statistics. The Official Statistics of Finland (OSF) are a comprehensive collection of statistics describing the development and state of society. They comprise nearly 300 sets of statistics on 26 different topics. The producers of Official Statistics of Finland have approved a common quality pledge in which they undertake to observe common quality criteria and quality assurance methods. The quality criteria of the Official Statistics of Finland are compatible with the European Statistics Code of Practice. The good practices followed in the statistics are described in more detail in Statistics Finland’s handbook Quality Guidelines for Official Statistics. 

The data are made available simultaneously to all users of the statistics on the website of the statistics at https://www.tilastokeskus.fi/til/ulkoy/index_en.html
No data are disclosed before the release date. The data are transmitted to Eurostat on the agreed dates.