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Challenges Face by Non-Finnish Entrepreneurs in Finland



Kirjoittanut: Chathurani Jayasekara Athapaththu Arachchilage - tiimistä Satku.

Esseen tyyppi: Akateeminen essee / 3 esseepistettä.
Esseen arvioitu lukuaika on 6 minuuttia.

 

  1. INTRODUCTION

In the final quarter of 2022, according to Statistics Finland (2023), there were 12,439 new businesses registered. Although this marked a decrease of two per-cent compared to the same period in the previous year, it demonstrates that Finland remains an attractive destination for entrepreneurs, with a high number of new business registrations. As suggested by Wuokko, Sahari & Jensen Eriksen (2021), Finland’s stable economy, advanced infrastructure, and supportive business environment offer opportunities for entrepreneurs, as corroborated by statistics published in Statistics Finland (2023). Among the newly registered enterprises, 5,009 were categorized as limited companies, while 7,311 were identified as businesses owned by private entrepreneurs (Statistics Finland, 2023).

Foreign enterprises located in Finland generated a turnover of EUR 97 billion in 2020, and the number of foreign enterprises in Finland in 2020 was 4,362, employing nearly 18.1 percent of the enterprises operating in Finland (Statistics Fin-land, 2023). This evidence highlights the interest of foreign entrepreneurs in starting businesses in Finland.

However, non-Finnish speaking entrepreneurs face unique challenges due to language barriers, cultural differences, legal barriers, and limited networks (Rifai, 2012). This paper aims to explore these barriers and provide strategies to navigate them successfully.

 

  1. DEFINITION OF ENTREPRENEUR 

During the early 1700s, Cantillon characterized an entrepreneur as someone who takes risks by purchasing goods at fixed prices and selling them at unpredictable prices. Building on Cantillon’s ideas, Jean Baptiste expanded the definition to involve the coordination of production factors, emphasizing that an entrepreneur must possess unique personal qualities. (Carton, Hofer & Meeks, 1998). However, by considering previous studies Carton et al. (1998) defined the entrepreneur as “the individual (or team) that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the consequences of the organization. Therefore, entrepreneurship is how new organizations are formed and therefore the means with which wealth and job creation mechanisms are initiated.” Further Bygrave & Hofer (1991) proposed the entrepreneur is more of a process than characteristics of entrepreneur and the defined entrepreneurial process as a process that encompassing every task, activity, and step linked to identifying opportunities and establishing organizations to seize those opportunities.

 

  1. BECOME AN ENTREPRENEUR IN FINLAND

Initiating a business venture in Finland is notably more convenient and secure compared to many other countries. Typically, the entire process, including opening a bank account, company registration, and tax administration registration, can be completed within two to three weeks. With a well-structured business plan, one can swiftly become an entrepreneur in this country. Remarkably, ap-proximately 4,000 startup companies establish their operations in Finland annually (Yang-Pyydysmäki, 2020).

Finland’s startup ecosystem witnessed a remarkable surge in funding in 2019, with startups securing an impressive 511 million euros from investors. A substantial portion of this funding, totaling 180 million euros, was provided by foreign venture capitalists, while an additional 115 million euros came from other foreign investors (FiBAN, 2020). This data serves as a testament to Finland’s allure for international investors and the ease with which startups can secure financial backing within the country.

 

  1. CHALLENGES FACED BY NON- FINISHED ENTREPRENEURS IN FINLAND

While Finland is undeniably an attractive destination for foreign entrepreneurs, it continues to present them with a range of challenges. According to Dharel (2022) and Jafarov (2022), linguistic barriers, cultural disparities, and constrained networks emerge as prominent obstacles for non-Finnish-speaking entrepreneurs seeking to establish themselves in Finland. However, Némethová (2022) introduces another critical dimension by emphasizing the influence of legal conditions on early-stage businesses. This paper will engage in a comprehensive discussion, informed by these studies, focusing on the impediments posed by language barriers, cultural distinctions, limited networks, and legal constraints encountered by entrepreneurs in Finland.

 

4.1         LANGUAGE BARRIERS

Language has a crucial role in conducting economic operations within any given nation. In the context of Finland, a country where Finnish is the official language, entrepreneurs who do not possess fluency in Finnish frequently encounter challenges pertaining to communication, consumer engagement, and com-prehension of legal and administrative procedures. As example when a person wants to apply for the trade permit, they need to send the applications to the NBPR in Finnish or in Swedish (Holopainen, 2009). The study conducted by Pin-to (2021) reveals that entrepreneurs encounter difficulties in networking, negotiating contracts, and establishing partnerships with local partners due to their low language abilities. In order to address this particular obstacle, it is strongly ad-vised to utilize language training programs that have been specifically tailored for entrepreneurs (Jafarov, 2022). These programs offer language skills that are essential for proficient corporate communication and comprehension of legal and administrative obligations.

 

4.2         CULTURAL DIFFERENCES

Cultural disparities can have a profound influence on business operations and relationships within the context of Finland. Entrepreneurs who do not possess fluency in the Finnish language may encounter difficulties in comprehending the intricacies of Finnish business culture, conventions, and etiquette. An illustration of this can be seen in the Finnish business culture, which places importance on punctuality, direct communication, and decision-making based on consensus (Sladakovic, 2021). It is advisable for entrepreneurs to allocate time towards acquiring knowledge about Finnish culture and then adjusting their company operations to align with it. Establishing connections with mentors or advisors from the local community who possess expertise in cultural intricacies can yield advantageous outcomes (Rifai, 2012).

 

4.3         LIMITED NETWORKS

Successful businesspeople know how important it is to have a solid network, but it might be difficult for those who don’t speak Finnish to do so. A lack of connections can limit a company’s reach to new clients, vendors, and partners. Business owners can get around this obstacle by actively seeking out net-working opportunities including conferences, trade groups, and mentorship pro-grams (Dharel, 2022). These platforms provide a chance to meet like-minded individuals, create relationships, and obtain insights into the local business eco-system.

 

4.4         LEGAL BARRIERS

Non-Finnish speaking entrepreneurs must go through several legal requirements and regulations to create and operate a firm in Finland. Failure to meet these standards may result in harsh penalties and stunt the development of a company. Compared to native founders, foreign founders are confronted with other practical or legal conditions that might restrict them from business growth and consequently its survival (Némethová, 2022). On the other handling legal activities are a burden for the entrepreneurs. Hence, the majority of entrepre-neurs outsource activities that are critical to the business, e.g., company registration, accounting, legislation and tax related activities (Némethová, 2022).

 

  1. DISCUSSION

Rifai (2012) argues that for some immigrants becoming an entrepreneur may be the only option for employment because of lack of opportunities in Finland job market. However, statistics provided by Statistics Finland (2023) and FiBAN, (2020) shows the attractiveness of Finland for entrepreneurs in terms of operating businesses and finding investors. The obstacles encountered by entrepreneurs who do not speak Finnish in Finland are not unconquerable. Entrepreneurs can effectively overcome these challenges by strategically allocating re-sources towards language training, cultural adaptability, networking handling legal work. Language training programs specifically designed for entrepreneurs have the potential to improve their communication skills and deepen their comprehension of legal and administrative procedures (Pinto, 2021 & Jafarov, 2022). The process of cultural adaptation, which involves acquiring knowledge about Finnish business etiquette and traditions, can be crucial in enabling entrepreneurs to cultivate trust and forge significant connections with local stakeholders (Rifai, 2012). Engaging in networking events and activities can effectively broaden the professional networks of entrepreneurs, hence fostering potential avenues for collaboration and facilitating business expansion (Dharel, 2022). Foreign entrepreneurs in Finland often outsource legal or legal affiliated activities that are critical to the business as a solution for overcome legal barriers (Némethová, 2022).

However further studies on the subject can be conducted to explore deeply on navigating these barriers and opportunities that are available for non-Finnish speaking entrepreneurs in Finland.

 

  1. CONCLUSION

Entrepreneurs without proficiency in the Finnish language have notable obstacles when operating in Finland, encompassing linguistic difficulties, disparities in cultural norms, restricted access to professional networks and handling legal activities. Nevertheless, entrepreneurs may effectively overcome these limitations and flourish in the Finnish business environment by tackling them through language training, cultural adaptability, efficient networking and expert advice for legal activities.

 

REFERENCES

Dharel, A. (2022). Motivation, challenges, and survival of diaspora entrepreneurs in Finland: LAB University of Applied Sciences. Bachelor’s thesis.

Rifai, J.E. (2012). Challenges and opportunities: Being a foreign entrepreneur in Finland. Turku University of Applied Sciences. Bachelor’s thesis.

Jafarov, E. (2022). The role of diaspora networks in opportunty exploitation by ethnic entrepreneurs in finland. University of Turku. Turku School of Economics. Master´s Thesis.

Pinto, V. (2021). How to improve the employability of non-Finnish speaking foreing students in healthcare industry in South Savo and Kymenlaakso regions. South Eastern Finland University of Applied Sciences. Master’s thesis.

Sladakovic, K. (2021). International Students’ Entrepreneurial Intentions in Finland. Building a career in finland: Experiences of International Women in the

Business Sector. Tampere University. Faculty of Management and Business. Master’s thesis.

Wuokko, M , Sahari , A & Jensen-Eriksen , N 2021 , Success Against the Odds : Development of the Finnish Economic Environment . in K Ilmonen & P Moilan-en (eds) , The Political Analyst’s Field Guide to Finland . JYU Reports , Universi-ty of Jyväskylä , Jyväskylä , pp. 58–71 .

Holopainen, Tuulikki (edit.) 2009. Establishing and doing Business in Finland. 5 th edition. Helsinki: Edita Publishing Oy.

Carton, R, C, Hofer, W.C, & Meeks, M,D (1998): The entrepreneur and entre-preneurship: Operational definitions of their role in society. The University of Georgia Terry College of Business. Semantic scholar.

Bygrave, W. D. & Hofer, C. W. 1991. Theorizing about entrepreneurship. Entre-preneurship Theory and Practice, 16, 13-22.

Némethová, K, 2022. Early-stage business failures of opportunity-driven immi-grant entrepreneurs in Finland: The Role of Liability of Foreignness. University of Jyväskylä. Department of business and economics. Master’s thesis.

Statistics Finland, 2023.  Structural business and financial statement statistics. Updated 03.03.2023. Read on 25.10.2023. https://stat.fi/en/publication/cl8mphpsgykvl0cvzuhyd2lu7

Finnish Business Angels Network (FiBAN), 2020. Finnish startup funding reached a new high in 2019. Updated 07.04.2020. Read on 25.10.2023. https://fiban.org/finnish-startup-funding-reached-a-new-high-in-2019

Yang-Pyydysmäki, X, 2020. Pros and Cons of Starting a Business in Finland as a Foreigner. Updated 21.10.2020. Read on 30.10.2023. https://blogs.tuni.fi/entre/how-to-run-a-business-in-finland/pros-and-cons-of-starting-a-business-in-finland-as-a-foreigner

I'm someone who finds joy in the simple things and thrives on learning new experiences. With a bachelor's degree in Fashion and Textile Design, I'm passionate about creating my own fashion brand and becoming a successful entrepreneur. I firmly believe that persistence is key, and happiness stems from staying true to oneself. Let's chase dreams and make them a reality!

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