Finns moving to Estonia

  • 2003-09-04
  • Baltic Business News
TALLINN - Finnish fears of an exodus of corporate interests to cheaper havens in
Estonia were given credence this week when Coderum Ltd., a software company
based in Turku, announced it was planning to relocate several employees to
the island of Saaremaa.
CEO Jani Laakso said that the transfer would be completed by the end of the
year. He said the move would enable to cut costs, increase salaries and
employee's living standards.
Laakso said that while in Finland people paid two-thirds of their wage in
taxes, while in Estonia they paid only one-third.
The company hopes to save 2,000 euros per month by transferring jobs to
Laakso said that the fact that employees who relocated to Estonia would not
be protected by the Finnish social welfare system was not a deterrent.
"The staff is not concerned because of it," said Laaksi, adding that similar
coverage could be provided by standard insurance.
Coderum Ltd. is a Finnish software company that provides professional
expertise in the wide sector of ICT-business. Its services cover the whole
range of software development, from data structure design to polished user
In addition to the local market, Coderum also operates in Germany and
Estonia. Through its partners it provides targeted Web-marketing and
marketing researches in Russia.
Experts say that small foreign IT firms such as Coderum are the most likely
to transfer more jobs to Estonia.
Last week another Finnish company, Copterline, which operates daily
helicopter service for passengers between Helsinki and Tallinn, announced
that it was considering plans to move its head office to Estonia.
Other major Finnish companies that have announced plans to transfer jobs to
Estonia include Rapala Oy, the world's leading producer of fishing lures,
Stoneridge, Elcoteq and Nanso.
Finnish textile manufacturer Nanso Oy, for example, announced that it would
close its production unit in Finland and transfer 80 jobs to Estonia.
Finnish Minister of Trade and Industry Mauri Pekkarinen said the rapid
economic development in Estonia would force Finland to change.
He said that Estonia's low corporate tax system had already forced Finland
to adopt a decision to lower taxes.
"The fact that Estonia is developing so rapidly is also good for Finland
since it is a challenge for our economy," said the minister. "It will only
benefit both countries."
Pekkarinen said that the government was already considering lowering the
corporate income tax of Finnish enterprises.
Finland is Estonia's second-largest foreign investor after Sweden and has
invested 19 billion kroons (1.2 billion euros) in Estonia. There are
currently 1,977 companies registered in Estonia which are owned by Finnish
capital, including 899 companies that are fully owned by Finland.