Immigrant founders gain ground on Finland’s top tax lists

People with immigrant backgrounds are increasingly appearing among Finland’s highest earners and taxpayers, and are likely to remain there, Yle business journalist Petteri Lindholm writes in an analysis.

Three people with foreign backgrounds are among the country’s 20 highest earners this year: Iranian Saber Kordestanchi is third, Dutchman Rob Blaauwgeers is sixth and American Zach Shelby is 11th. In startup terminology, they are founders: each became wealthy through a company they established.

Immigrants have long been prominent among company founders in the United States, where they have founded more than half of so-called unicorns, or high-growth companies valued at more than one billion. In Finland, they have appeared near the top of income lists only in recent years. Russian-born Maria Severina, who sold a diagnostics company, was fifth among the highest earners in 2018. Kordestanchi reached 11th place on the tax list a few years ago.

One reason is the growth of Finland’s startup sector, where founders who sell their stakes have become regulars on tax lists. People with foreign backgrounds now make up about one fifth of startup employees, roughly twice the share in the early 2010s, according to figures from the Finnish Startup Community.

Startups aiming for international markets are generally comfortable working in English and readily bring people from abroad into their teams. Traditional companies, meanwhile, increasingly emphasise Finnish-language skills. For many immigrants, working at a startup can be a path to founding a company of their own.

Universities are another route into entrepreneurship. Blaauwgeers, whose company Bluefors makes refrigerators for quantum computers, first came to Finland as a researcher at Aalto University. Work there led to innovations and the founding of the company, which recently reached unicorn status. Kordestanchi, one of the founders of software company Hostaway, came to Finland for a master’s degree, then worked at technology company Kiosked before becoming an entrepreneur. Shelby originally came to Finland to study at the University of Oulu.

Closer cooperation between universities and businesses may also have helped, Lindholm writes. Business incubators are now found at several universities.

Many immigrant founders have yet to appear on tax lists. They include German Jan Goetz and Malaysian Kuan Yen Tan, founders of quantum-computing company IQM, and Polish Rafal Modrzewski, a founder of space technology company Iceye. Their presence suggests that more immigrants could feature on income and tax lists when they eventually sell their stakes.

But tighter immigration policies could deter skilled workers from coming to Finland, Kordestanchi told Yle. Research on migration to OECD countries also indicates that policy restrictions can quickly affect the number of people arriving. A weak job market may have a similar effect in the short term. People arriving from outside the EU must also pay tuition fees for higher education. Up to half of international graduates have left Finland within three years of graduating, with a lack of available jobs cited as a major reason in anecdotal accounts.

Yle says it publishes tax information to support fact-based public debate, scrutinise the distribution of wealth and power, and promote transparency and trust. It also notes that tax records do not tell the whole story.