Statistics on foreign-owned entreprises

General

Statistics Finland has surveyed foreign ownership in enterprises operating in Finland from 1994 onwards. This task is connected to a pilot project initiated by Eurostat, the Statistical Office of the European Communities, which aims to create harmonised statistical practices on foreign ownership in the EU Member States (FATS, Foreign Affiliates Statistics).

Information sources

Information on enterprises directly owned from abroad is based on data collected by the Bank of Finland on foreign direct investments made in Finnish enterprises. Their affiliates were searched from Statistics Finland's enterprise group register and by using some other sources. In this way cases of indirect ownership were also entered in the statistics. The Bank of Finland data were supplemented by following corporate acquisitions.

The indicators describing the operation of enterprises were produced from Statistics Finland's Structural Business Statistics database, which contains the financial statement data of Finnish enterprises. The data on large companies were obtained by direct inquiry and on small enterprises from the Tax Administration's business taxation material.

The Structural Business Statistics include only independent business enterprises operating in Finland which were in operation during the year in question and which are liable to submit financial statements in Finland. The statistics cover business branches of foreign enterprises operating in Finland for the year 2000, but for years prior to 2000 the statistics do not cover business branches of foreign enterprises operating in Finland.

Foreign ownership and control

Foreign-owned enterprises in the statistics are those where over 50 per cent of the vote is directly or indirectly in the control of a foreign owner (The control may also be divided between several parties if they operate as a consortium or in close co-operation).

The nature of this ownership must be a direct investment made to create an economic relationship and to acquire control for the owner enterprise. The decision-making power of these enterprises thus lies with one or several foreign parties that also aim to use this power.

According to the definition above, the statistics do not classify as foreign-owned those enterprises in which foreigners own the majority of the capital stock, but in which foreign ownership is dispersed to a large and heterogeneous group of international portfolio investors.

Portfolio investors cannot and do not even plan to influence the operation of the actual enterprise but expect an increase in value and dividends for their investments. In practice, a foreign-owned enterprise seldom has more than one foreign controlling owner.

In a specified year those enterprises that fulfil the conditions for foreign ownership on the last day of the year in question are classified as foreign-owned. The figures for all enterprises that have changed into foreign ownership during the year are recorded in total under foreign-owned enterprises for that year. Correspondingly, enterprises having turned into Finnish-owned ones are removed from this group.

When the owner country was being determined, every attempt was made to find out the ultimate beneficial owner, the original source for the chain of owners of the enterprise. If an enterprise operating in Finland is owned by a Swedish enterprise but it belongs to a U.S. group, the country of origin is then the United States. The ultimate beneficial owner concept is used so as to allocate foreign ownership correctly. In addition, those cases are excluded from the statistics where a Finnish owner owns a Finnish enterprise through an enterprise registered abroad.

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Updated 3.7.2002