COUNTRY STATISTICS

Official name of the country: Republic of Finland

Status within the European Union: A member state of the European Union since 1995

Area: 337,900 square kilometers.

Population (at December 31, 2001)¹: 5.2 million

Major cities (at December 31, 2001)²:

• Helsinki (the capital city) — pop. 560,000
• Espoo — pop. 217,000
• Tampere — pop. 198,000
• Vantaa — pop. 180,000
• Turku — pop. 174,000

Language: Finnish and Swedish. Finnish is spoken by 93% and Swedish by 6% of the population.

Time zones: Two hours ahead of GMT. Summer time runs from late March to late October.

Map:

Flag:

POLITICAL ORGANIZATION

Head of state: The President of the Republic (Tasavallan presidentti), Ms. Tarja Halonen.

Head of government: The President and the Parliament (Eduskunta), comprised of 200 members. For further information, go to: http://www.eduskunta.fi

Governing political parties: There are three large political parties in Finland: the Social Democratic Party, the Finnish Centre Party, and the National Coalition Party, which are all represented in the Parliament. The smaller major parties are the Left Alliance, the Green League, the Swedish People's Party in Finland, and the Christian Democratic Party.

The government consists of the Prime Minister and a maximum of 17 ministers. The Prime Minister, Mr. Paavo Lipponen, is a member and a head of the Social Democratic Party (SDP). The government consists of the Social Democratic Party, the National Coalition, the Left Wing Alliance and the Swedish People's Party. For further information on the government, go to: http://www.valtioneuvosto.fi

National elections: The President is elected every six years by direct popular vote. The last election was held in February 2000. The Parliament is elected by a direct proportional vote for a term of four years. The last election was held in March 1999, and the next election is in March 2003. The minimum age for voting and standing for election is 18.

Political organization of Finland: There are two tiers of government in Finland: central (State) and municipal. Each municipal government consists of the municipal council, elected by the residents of the municipality, and the municipal board, which is appointed by the council. The municipal authorities are responsible for schools, social services, health care, public traffic, and housing.

National legislature: The legislative power of the state is vested in the unicameral Parliament (Eduskunta) and the President (Presidentti).

NATIONAL HOLIDAYS (2003)

* Public holiday

ECONOMIC INFORMATION

Economic growth rate (real GDP growth, annual percentage change): Approximately 0.7% (2001)³.

Unemployment rate: Approximately 9.1% (2001)⁴.

Inflation rate: Approximately 2.6% (2001)⁵.

Income Tax Rates⁶:

State tax on earned income in 2002 (EUR):

Municipal income tax rate: On taxable income varies in 2002 between 15% and 19.75%, depending on the municipality (flat rate).

Church tax: Is imposed at flat rates on the taxable income as determined for municipal tax purposes. Rates vary between 1% and 2.25% in 2002. Church tax is paid only by the members of the Finnish Evangelical-Lutheran and Orthodox Churches.

Employee's sickness insurance contribution: Administered by the tax authorities, the contribution rate is 1.5% in 2002.

The tax rate on capital income: 29% (flat rate).

Net wealth tax rate: EUR 80 on a net wealth of EUR 185,000, and 0.9% on the excess of that amount.

Corporate tax rate: 29% (flat rate).

Value added tax rate: 22%(standard rate).

Currency: the Euro (, EUR).

MISCELLANEOUS EXPATRIATE INFORMATION

KPMG's "Planning Your International Secondment - Coming to Finland":
http://www.us.kpmg.com/microsite/Global_IES/PYIS/PY_FinlC.pdf

KPMG's "Taxation of International Executives":
http://www.us.kpmg.com/microsite/Global_IES/TIES/ies_finl.pdf

The Ministry for Foreign Affairs (for country information): http://formin.finland.fi/english/, http://virtual.finland.fi/

For immigration: http://www.uvi.fi/englanti

Taxation: http://www.vero.fi/english

Pension: http://www.etk.fi/english

Social security: http://www.kela.fi

Finland's public sector services and related information: http://www.suomi.fi/suomi.fi/english/immigrants_and_emigrants/

For additional country information:

• See the CIA Factbook on Finland at: http://www.odci.gov/cia/publications/factbook/index.html
• See Embassy of Finland in the United States Web site: http://www.finland.org/
• Also see Finland Information Pages at: http://virtual.finland.fi/finfo/english/default.html

(KPMG is not responsible for the content of non-KPMG Web sites.)

Driving in Finland: A driver's license issued in an EU member state is valid in Finland, and application for a Finnish license is not obligatory. Other foreign driver's licenses are valid for one year from the date of arrival. Driver's license holders transferring from outside the EU are required to apply for a Finnish driver's license within the first year of residence. The holder of a driver's license may not drive in Finland until he or she reaches the age of 18.

Footnotes:

¹Source: Tilastokeskus (Statistics Finland), www.tilastokeskus.fi.
²Source: Tilastokeskus (Statistics Finland), www.tilastokeskus.fi.
³Source: Ministry of Finance.
⁴Source: Ministry of Finance.
⁵Source: Ministry of Finance.
⁶Source: Verolait (Tax Laws) 2002, Kauppakaari/Talentum Media 2002, Helsinki.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.