Considering the fact that the Nordic countries only have a total population of around 27 million people, these states have harbored quite a few immensely successful businesses in a global perspective. So what is it like doing business in scandinavia? Let’s take a look at some of the pros and cons that entrepreneurs most likely will encounter in this part of the world.
Pros – this is why business thrive in Scandinavia
1. Good infrastructure
IT-technology and broadband
Scandinavians pride themselves to be very organized and structured, this collective self-image seems to have spilled over on the broader society. Overall the infrastructure and technology is top notch. Good broadband connections are available in most places including rural areas.
2. Low corruption levels
Sweden is the most corrupt country in Scandinavia, still corruption levels are very low in all the Nordic Countries compared to the rest of the world. According to last years corruption perceptions index (2017). Denmark is the world’s second least corrupt country, followed by Finland and Norway whom both share the third place. Sweden is falling from fourth place (2016) to sixth (2017), thus taking over the bottom position from Norway . According to the index Iceland, coming in on 13th place, is the most corrupt Nordic country 2017.
3. Lower competition
A relatively small population, makes for lower business competition. But on the other side of the coin is that a smaller population also makes for fewer customers. But In this day and age, this is not really a problem as there are great possibilities to make the whole world your market place.
Cons and challenges to doing business in Scandinavia
1. Worlds highest taxes.
The Nordic countries are known for combining capitalism with an extensive social welfare system. This means good social security and reasonably low poverty levels, on the other hand someone has to pay for it and this is done through taxes. Sweden, Norway, Denmark and Finland has got some of the worlds highest taxes. Company taxes and the employee fees are ineed very steep and could present a real problem for any small business or startup.
2. Hard to get business financing
It’s almost always hard to get hold of business financing and the Nordic Countries are no exception to this rule. Forbes ease of getting business credit rankings places Denmark infront of their neighboring countries while https://firmalan.com puts Finland in pole position looking at alternative business loans including Peer-to-peer solutions and other crowdfunding options. At the very bottom of both categories you find Norway, but neither Sweden och Iceland are very far ahead.
3. Introvert culture
Even though Scandinavians in general are considered to be quite friendly, the could also be seen as a bit introvert or even shy. Scandinavia is not exactly the country where people make friends with everyone they come across, the same is certainly true for Nordic businesses. Building trust by networking and showing that you are a thrust worthy business partner is key to successfully doing business in Scandinavia. However once you gained their trust, you can feel rather safe not getting tricked into bad business deals as scandinavian business owners tend to be loyal and honor deals.