---
title: "Why Capital Is Leaving Finland: Ownership, Taxation and the Incentives We Got Backwards"
description: "Four Neuvottelija conversations on Finland's ownership problem — with Markus Hollmen and Mauri Kotamäki on capital flight, plus two shorts and a full episode on inheritance tax and the YEL pension mess — laid out with the exact figures as spoken. Where the capital actually is, how poor Finnish owners really are, why the inheritance tax reform collapsed, and why YEL still isn't funded. Here's where I land."
datePublished: 2026-07-15
dateModified: 2026-07-15
authors: ["Sami Miettinen"]
pillar: "investment-banking"
tags: ["capital-flight","ownership","inheritance-tax","yel-pension","finnish-economy","wealth-tax"]
sourceEpisodes: ["https://www.neuvottelija.com/podcast/episodes/652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365/","https://www.neuvottelija.com/podcast/episodes/540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen/","https://www.neuvottelija.com/podcast/episodes/546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva/","https://www.neuvottelija.com/podcast/episodes/545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333/"]
canonical: https://www.neuvottelija.com/investment-banking/insights/why-capital-leaves-finland/
---
# Why Capital Is Leaving Finland: Ownership, Taxation and the Incentives We Got Backwards

People ask me why Finnish capital keeps ending up somewhere else — Zurich, Stockholm, a family office in Luxembourg. The honest answer isn't one thing. It's a stack of decisions, each individually defensible, that add up to a country with almost no domestic private capital left to speak of. I put this question to [Markus Hollmen and Mauri Kotamäki](/podcast/episodes/652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365/), a Switzerland-based wealth manager and Finnvera's chief economist, and the numbers they laid out were worse than I expected even going in as someone who's spent years saying this on air.

## The diversification argument, and why it's rational

Start with Hollmen's actual case, because it's not tax-flight rhetoric — it's portfolio theory. Finland's weight in global capital markets is roughly one percent. If you believe in an efficiently allocated global market, a Finnish investor should hold about one percent of their liquid wealth at home and the rest everywhere else. Instead, Hollmen estimates that fixed and business assets push a typical wealthy Finnish family to 10% of wealth in Finland at minimum, and for many, two-thirds or more — "usually even much more if you think about total wealth — it's probably actually closer to 95%, if you think about having a business here." His conclusion, delivered as plain risk management rather than pessimism: "a wealthy Finnish entrepreneur and investor family should move all of their liquid assets somewhere else, rather than into domestic stocks and corporate loans and so on" ([05:09](https://www.youtube.com/watch?v=2btE8V0ltMI&t=309s)).

Here's the twist that makes it structural rather than a matter of individual choice: Finland's own pension sector, sitting on that roughly 25% payroll contribution, has been doing exactly the same thing — steadily allocating more abroad, for the same sensible reasons. So the two largest pools of Finnish capital, private wealth and pension assets, are both rationally diversifying away from Finland at the same time, and nobody is stepping in to replace them. Sovereign debt tells the same story: 98% of new Finnish government debt issuance now comes from foreign buyers. Compare that to Japan or Italy, which finance their own deficits domestically. Finland has none of that buffer.

## How poor Finnish owners actually are

This is where the numbers get uncomfortable, and where I've made the same point myself. In a short episode on [Finnish owners' wealth](/podcast/episodes/540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen/), I laid out the comparison directly: "American wealth is 520,000 euros per adult, while for us it's 150,000 euros. In Sweden, that wealth is 300,000 euros per adult and in Switzerland it's over 650,000 euros per adult... We are really, compared to those Americans and of course the Swiss, dirt poor!" ([00:00](https://www.youtube.com/watch?v=dJ1cg641S1A&t=0s)).

That gap isn't abstract once you see how concentrated Finnish ownership already is. Kotamäki and Hollmen cite research — funded in part by Hollmen's own firm, Translink Corporate Finance, which put €15,000 into an ownership professorship — showing that only about 8,500 people in Finland own €1 million or more in unlisted shares. Hollmen calls it "an incomprehensibly small number," and adds the part that matters for the flight narrative: "these are exactly the guys who quite easily sell their company and move to Switzerland — and indeed have done so" ([32:20](https://www.youtube.com/watch?v=2btE8V0ltMI&t=1940s)). When your entire pool of significant private owners numbers in the low thousands, every departure is a measurable loss to the tax base and the ownership base simultaneously — which is precisely Kotamäki's point about why raising capital taxes further would be self-defeating: with a tax base that small, even a higher rate barely moves total revenue, while accelerating exits.

## The €84,000 backpack

Kotamäki's own contribution is the public-spending side of the equation, and it's the reason private capital feels squeezed rather than merely taxed. His calculation: take Finland's roughly €159 billion in public spending, divide it across the country's 1.9 million market-economy workers — private-sector employees and entrepreneurs — and you get a burden of "around 84,000 euros a year... per private-sector employee, including entrepreneurs" ([12:16](https://www.youtube.com/watch?v=2btE8V0ltMI&t=736s)). He's careful to caveat this: some comes back as subsidized services and pension contributions, and the figure blends state, municipal and pension spending in a way that overstates any one person's direct burden. But he also projects that under continued aging and inflation, that number moves toward €110,000 fairly quickly. Against a Swiss comparison where the equivalent burden runs roughly half as large, the mechanism is straightforward: an aging population raises the cost of the state at exactly the moment the ownership base able to fund it is shrinking.

This is where the channel's position is explicit rather than implied: Kotamäki describes himself as "market-liberal," and both guests argue openly for shrinking the public sector, cutting waste with AI, and — Kotamäki's phrase — going "Milei-style" with the chainsaws. That's a stated ideological lens, not a neutral data readout, and it's worth flagging as such even where the underlying figures are simply reported facts.

## Why the inheritance tax reform collapsing matters

Finland already taxes private capital hard — Hollmen cites an analysis putting Finnish capital taxation at roughly 34%, "the world's third-highest tax when it comes to capital taxes." Against that backdrop, Switzerland's own electorate was asked to vote on an inheritance tax proposal targeting estates above 50 million francs, and rejected it outright — Hollmen's gloss: "they didn't want an inheritance tax." Finland, by contrast, already applies inheritance tax above €20,000, rising to 19%.

That threshold was the subject of Finland's own reform attempt, and I covered its failure directly. As I said on air: "the biggest disappointment, of course, was the failure of this inheritance tax reform based on the Norwegian and Swedish models. It would have been quite a no-brainer... but now these changes were quite small and cosmetic. That is, the tax-free portion was raised not to the American 12.9 million, but from €20,000 to €30,000" ([00:00](https://www.youtube.com/watch?v=2MefI_X3Q-A&t=0s)) — from [that episode](/podcast/episodes/546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva/). The payment structure barely changed either: the heir still pays in advance, with only slightly eased penalty interest if they can't.

Hollmen's example of what this actually does to a real company is Vaisala, valued at roughly €1.5 billion: without ownership tax relief, the next generation has to pull "7% of that 1.5 [billion]... from their own ownership, as dividends paid out in advance, so they can finance those future taxes and the interest on them." The effect isn't abstract fairness — it's capital allocation. Forced dividend extraction to cover a looming tax bill competes directly with growth capex, and it pushes management toward protecting the dividend rather than taking risk. Both guests favor Sweden's alternative: converting inheritance tax into a capital gains tax paid only on realization, so an owner can keep taking long-term risk right up until death rather than de-risking years in advance to fund a tax bill.

## The YEL mess: a pension system nobody funded

The fourth piece is entrepreneurs' own pensions. [Liisa Hanén and Jocka Träskbäck](/podcast/episodes/545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333/) — a micro-entrepreneur advocate and a Coalition Party politician — walked through why YEL has become its own driver of capital destruction among the self-employed. Träskbäck's line, delivered as the channel's most-viewed short video: "The current YEL is like throwing banknotes from a Swedish ferry into the sea, and that's true with the difference that from a ferry, throwing banknotes into the sea is much more fun than this YEL" ([00:00](https://www.youtube.com/watch?v=bziYqBgVaB8&t=0s)).

The mechanics explain the anger. YEL's roughly 25% contribution is assessed against an estimated "confirmed income" rather than actual take-home pay — a figure Hanén describes as coming from pension insurers reading "the same law" but never arriving "at the same result." A 2020 Finnish Centre for Pensions study found 59% of entrepreneurs under-insured and 25% over-insured against that artificial benchmark. Meanwhile the deeper structural problem, per Hanén and Träskbäck, is that YEL — unlike the funded TyEL system for employees — was never funded when it launched in the 1970s: contributions collected today are paid straight out to today's retirees, running roughly a €500 million annual deficit that the state backstops. Both guests want YEL merged into TyEL, with a portion — Träskbäck floats 10%, matching a Swedish model — genuinely funded going forward, alongside basing contributions on real income rather than turnover-based estimates. The government's own mid-term review pushed full legislation out to 2029, a timeline both guests call unworkable given that, as Träskbäck notes, roughly 16,000 companies closed in a single recent quarter.

## Where I land

I'll let my own words carry this, since that's the fairest way to close it. On ownership: "American wealth is 520,000 euros per adult, while for us it's 150,000 euros... We are really, compared to those Americans and of course the Swiss, dirt poor!" That's not a talking point — it's the plain comparison, and it's why I keep returning to ownership and taxation as the same conversation.

On the inheritance tax reform specifically, my verdict stands as I gave it live: "the biggest disappointment, of course, was the failure of this inheritance tax reform based on the Norwegian and Swedish models. It would have been quite a no-brainer... It will indeed now be left for the next right-wing government to implement. But now these changes were quite small and cosmetic." Until that changes — and until YEL gets funded rather than merely reformed on paper — the incentives on offer to Finnish owners will keep pointing the same direction Hollmen's clients have already gone: out.

---

## Source episodes

- https://www.neuvottelija.com/podcast/episodes/652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365/ (transcript: https://www.neuvottelija.com/podcast/episodes/652-paaoma-hylkaa-suomen-hollmen-kotamaki-neuvottelija-365/index.md)
- https://www.neuvottelija.com/podcast/episodes/540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen/ (transcript: https://www.neuvottelija.com/podcast/episodes/540-suomalaisomistajat-rutikoyhia-150000-sami-miettinen/index.md)
- https://www.neuvottelija.com/podcast/episodes/546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva/ (transcript: https://www.neuvottelija.com/podcast/episodes/546-perintoverouudistus-kaatui-villapaitaekonomistit-riemuitsiva/index.md)
- https://www.neuvottelija.com/podcast/episodes/545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333/ (transcript: https://www.neuvottelija.com/podcast/episodes/545-yel-hirvio-kuntoon-hanen-traskback-neuvottelija-333/index.md)

Cite as: Sami Miettinen, Neuvottelija — Why Capital Is Leaving Finland: Ownership, Taxation and the Incentives We Got Backwards, https://www.neuvottelija.com/investment-banking/insights/why-capital-leaves-finland/, 2026-07-15.