Investing in innovation: How Finland supports international companies

Whether setting up R&D activities, launching new products, or entering local innovation ecosystems, international businesses can tap into Finland’s robust support system designed to foster sustainable growth and global competitiveness.

Finland is one of Europe’s innovation leaders, with combined public and private R&D expenditure at 3% of GDP, among the highest globally. The national goal is to increase R&D spending to 4% of GDP.

Continue reading to discover how your company, regardless of its size or industry, can access funding, meet eligibility requirements, and thrive in Finland’s innovation-driven environment.

Who provides funding IN FINLAND and how it works

Business Finland is the country’s primary vehicle for increasing public RDI (Research, Development and Innovation) investment, particularly in experimental development, through direct budget allocations. In 2025, this translates to approximately EUR 700 million in public investment, with a target of EUR 1 billion by 2027. However, it does not function as a general-purpose business development financier.

Senior Director Kari Komulainen explains that Business Finland prioritizes companies committed to international growth with a compelling competitive edge. “We provide funding to every stage of innovation process from product-market fit validation to development, piloting, and demonstration – whether it's a new product, service, or business process. 

Finland's national goal is to increase R&D spending to 4% of GDP.

The organization collaborates with the Centres for Economic Development, Transport, and the Environment (ELY Centres), which oversee the regional implementation of government strategies, promoting sustainable development, competitiveness, and well-being. Additionally, Finnvera, Finland’s state-owned financing company, provides loans, guarantees, and export finance services.

Komulainen says Business Finland supports both bottom-up ideas from companies and strategic themes, such as digital transformation, zero-emission circularity, and health tech. This dual role, working with both researchers and businesses, bridges the gap between innovation development and commercialization.

A generous yet unobtrusive funding model

Funding typically covers between 40% and 70% of total RDI project costs. Even modest investments qualify, making this system attractive not just to large corporations, but also to Small and Medium-sized Enterprises (SMEs) and foreign-owned companies. Amounts can range from tens of thousands to tens of millions. There’s no upper limit; what matters is the scale and substance of the project, and the size of the potential market for to solution to be developed.

Business Finland empowers companies to innovate independently while ensuring benefits flow back into the local economy.

“For foreign-owned companies, we do not fund R&D labs unless there is a Finnish subsidiary with a business function that will commercialize the results. To ensure tangible returns for Finnish taxpayers, including jobs, tax revenue, and societal benefits, the subsidiary must also assume profit and loss responsibility and retain the intellectual property created with our funding,” Komulainen explained.

While the funding model is generous, it’s also designed to be non-intrusive. Business Finland offers support without taking equity, board seats, or ownership of project outcomes, empowering companies to innovate independently while ensuring benefits flow back into the local economy.

How to apply for funding

Business Finland ensures transparency and fairness in its funding process, with all criteria publicly available and applied equally to all applicants, whether domestic or international.

“We’re explicit about our expectations and share this openly via our website and advisory services. Internally, funding decisions involve multiple expert reviews and are never left to a single individual. Depending on the funding amount, decisions can be evaluated at up to four levels. We take this responsibility seriously, it’s taxpayers’ money, after all,” stresses Komulainen.

Applications are evaluated based on three key factors:

1. Company and team: Demonstrated commitment to growth is essential. Growth involves risk and transformation, and not all companies are prepared for that. A strong or strengthening team with the capability to execute is a key indicator.
2. Financial readiness: Since public funding does not cover 100% of project costs, co-financing is expected. This includes having investors, sufficient cash flow, or a credible financing plan in place.
3. Solution and market: The product or service should address a clear customer problem. A validated, preferably growing market is essential, along with a distinct competitive advantage. A scalable and profitable business model is necessary for long-term success.
    

Applications can be submitted at any time, so there’s no need to wait for a specific funding call. A typical single-company application is processed in about two months. More complex projects, such as consortia or ecosystem initiatives, may take four to five months due to their scale and complexity.

Business Finland ensures transparency and fairness in its funding process, with all criteria publicly available and applied equally to all applicants.

The application process is designed to be proactive, with terms often discussed even before an application is submitted, helping to streamline and accelerate decision-making. Many funding decisions are effectively made before formal submission, as early guidance is provided on what is and isn’t eligible. Unlike many systems, applications can also be refined after submission, allowing for greater flexibility and alignment with funding criteria.

“We’re also accessible,” notes Komulainen. “Some assume there’s a ‘one meeting’ quota; there isn’t. Meet us as often as you need. This level of openness may come as a surprise to those coming from more bureaucratic cultures. Trust is also extended upfront, not earned with suspicion. This cultural norm saves time, money, and helps partnerships flourish.”

Connecting research, business, and ecosystems

In addition to direct funding, Finland actively supports business development through innovation ecosystems and tax incentives. Business Finland works closely with both companies and research institutions through co-innovation and co-creation programs, allocating over €160 million annually to universities and research institutes to help turn new ideas into market-ready solutions.

These institutions, including some of the world’s top-ranked universities, are central to Finland’s innovation landscape. They conduct cutting-edge research, provide a steady pipeline of skilled talent, and facilitate knowledge transfer between academia and industry.

Universities and research institutes are central to Finland’s innovation landscape, providing a steady pipeline of skilled talent, and facilitate knowledge transfer between academia and industry.

While Business Finland helps companies bring research to market, innovation doesn’t start in the boardroom – it begins in the lab. That’s where the Research Council of Finland (formerly the Academy of Finland, or AKA) plays a vital role. As the country’s main driver of scientific research, it ensures a strong foundation of academic excellence and breakthrough discoveries.

The Council funds research projects, promotes international collaboration, and supports the development of research careers. One of its key initiatives is the Finnish Flagship Programme, which combines high-quality research, impactful partnerships, and significant societal and economic benefits. Through these efforts, the Council helps strengthen Finland’s vibrant research ecosystem and fuels long-term innovation.

Because Business Finland works with both companies and universities, it plays a bridging role, connecting innovation with commercialization. Foreign companies can integrate into Finnish innovation ecosystems from day one, benefiting from a welcoming environment that values both business and individual contributions. 

Foreign companies can integrate into Finnish innovation ecosystems from day one.

“Our universities are also global. At a recent PhD ceremony, nearly half the graduates were international. Whether you're an entrepreneur or a researcher, you're not stepping into a closed club; you’ll find compatriots already working in our universities and companies,” says Komulainen.

Finland’s innovation muscle is set to grow even stronger. Legislation boosting public R&D investment has strong backing across government and industry, with organizations like the Confederation of Finnish Industries fully aligned with the national growth agenda. This shared commitment fuels a collaborative RDI culture rooted in trust and ambition. As a small nation with global aspirations, Finland is transforming ideas into impact through a high-trust, low-bureaucracy environment that fosters innovation.