Concepts and definitions

Branch

Branches are local units without separate legal identity, which are dependent on foreign-owned enterprises. A branch is treated as a quasi-enterprise and has a fixed establishment (cf. foreign corporation).

Control

Control means the ability to determine the general policy of an enterprise by choosing appropriate directors as needed. Enterprise A is deemed to be controlled by institutional unit B when B controls - directly or indirectly - more than half of its shareholders' voting power or more than half of its shares.

Country of location

Country of location is the country of registration of an institutional unit. The country of location is often, but not always, the same as the nationality of an institutional unit.

Direct investment

Direct investment is defined as investment by a resident entity in one economy in an enterprise resident in another country with the objective of obtaining a lasting interest in the enterprise and an effective voice in its management. In practice, an investment is classified as direct investment if the resident enterprise owns 10% or more of the shares or voting power of the foreign enterprise.

Direct relationship

In the Enterprise Group Register, direct relationship describes the direct ownership and/or control relationship between two enterprises belonging to the same group.

FATS

The acronym FATS comes from the words Foreign Affiliate Statistics and refers to statistics on foreign affiliates. This may mean either foreign affiliates abroad controlled by the compiling economy (Outward FATS), or foreign affiliates resident in the compiling economy (Inward FATS).

FATS, Inward

The concept of Inward FATS comes from the words Inward Statistics on Foreign Affiliates. In Finland, these statistics go by the name Foreign-owned Enterprises and they describe the activities of foreign-owned enterprises in Finland.

FATS, Outward

The concept of Outward FATS comes from the words Outward Statistics on Foreign Affiliates. The concept refers to statistics describing the activity of Finnish-owned enterprises abroad.

Foreign affiliate

Foreign affiliate means an enterprise resident in the compiling country over which an institutional unit not resident in the compiling country has control, or an enterprise not resident in the compiling country over which an institutional unit resident in the compiling country has control.

Foreign control

Foreign control means that the controlling institutional unit is resident in a different country from the one where the institutional unit over which it has control is resident.

Control means the ability to determine the general policy of an enterprise by choosing appropriate directors as needed.

Enterprise A is deemed to be controlled by institutional unit B when B controls - directly or indirectly - more than half of the shareholders' voting power or more than half of the shares.

Foreign-owned enterprise

Foreign-owned enterprises are enterprises where more than 50 per cent of equity or voting shares are directly or indirectly held by one foreign party.

Gross investments in tangible assets

Gross investments include all additions, alterations, improvements and renovations which prolong the service life or increase the productive capacity of capital goods. Goods acquired through company restructuring (such as mergers or take-overs) are excluded.

Purchased goods are valued at purchase price, i.e. transport and installation charges, fees, taxes and other costs of ownership transfer are included. Own produced tangible assets are valued at production cost. The value of goods acquired via financial lease corresponds to the market value of the goods if they have been purchased in the year of acquisition.

Investments are recorded when the ownership is transferred to the affiliate.

Gross investments in tangible assets do not include running maintenance costs or the value and overhead expenditure on capital goods used under rental and operational lease contracts. Annual payments for assets used under financial leasing should be excluded.

Gross investments in tangible assets also exclude investments in intangible and financial assets.

Group nationality

In the Enterprise Group Register, group nationality is determined by the country of residence of the Ultimate Beneficial Owner (UBO). If the UBO of an enterprise group is resident in Finland the group's nationality is Finnish.

Indirect control

Indirect control means that enterprise X has control in enterprise A through another affiliate B which has control over enterprise A.

Number of employees (annual average)

The number of employees is defined as those persons who work for the affiliate and who have a contract of employment and receive compensation in the form of wages, salaries, fees, gratuities, piecework pay or remuneration in kind. All persons for whom payments are booked under the heading personnel costs in the profit and loss accounts of the affiliate should be included even if in some cases no contract of employment exists.

The number of employees includes part-time workers, seasonal workers, persons on strike or on short-term leave, but excludes persons on long-term leave.

Temporary workers from an employment agency are not included in the number of employees.

The number of personnel is measured as an annual average using at least data for each quarter of the year.

Personnel costs

Personnel costs are made up of wages and salaries and employer's social security costs.

Payments for agency workers are not included in personnel costs.

All remunerations paid to the personnel during the accounting period are included, incl. all gratuities, workplace and performance bonuses, ex gratia payments, 13th month pay (and similar fixed bonuses), payments made to employees in consideration of dismissal, lodging, transport, cost of living, and family allowances, commissions, attendance fees, overtime, night work, etc., as well as taxes, social security contributions and other amounts owed by the employees and retained at source by the employers.

Also included are the social security costs of the employer. These include employer's social security contributions to schemes for retirement pensions, sickness, maternity, disability, unemployment, occupational accidents and diseases, family allowances as well as other schemes. These costs are included regardless of whether they are statutory, collectively agreed, contractual or voluntary in nature.

Subsidiary company

A subsidiary company of a group is an enterprise in which the group head holds direct or indirect over 50 per cent of voting rights.

Turnover (external and internal sales)

The turnover of an affiliate comprises all market sales of goods or services supplied to third parties irrespective of whether the customers are external to the group or companies belonging to the same group.

The total turnover (100%) should be reported even if the group does not exercise full ownership over the affiliate.

Turnover comprises sales profits from the actual activity of the affiliate, after deduction of granted discounts and rebates, value added tax and other taxes based directly on sales volume. Turnover also includes all other charges (transport, packaging, etc.) passed on to the customer.

Income classified as other operating income, financial income and extra-ordinary income and revenue from the use by others of enterprise assets yielding interest, royalties and dividends and other income according to the International accounting standards (IAS/IFRS) is excluded from turnover. Operating subsidies received from public authorities or the institutions of the European Union are also excluded.

UCI

Ultimate controlling institutional unit of a foreign affiliate. An institutional unit that is at the top the ownership chain of a foreign-owned enterprise and is not controlled by any other institutional unit.

Ultimate beneficial owner

An institutional unit that is at the top the ownership chain of a foreign-owned enterprise and is not controlled by any other institutional unit.

Referencing instructions:

Official Statistics of Finland (OSF): Finnish affiliates abroad [e-publication].
ISSN=1798-4882. Helsinki: Statistics Finland [referred: 23.12.2014].
Access method: http://tilastokeskus.fi/til/stu/kas_en.html.

Home > Statistics > Enterprises > Finnish affiliates abroad > Concepts and definitions

Statistics

Enterprises

Finnish affiliates abroad

Link to rss-feed

Suomeksi På svenska Print version
Index| Site map| Feedback| Contact information
Etusivu| Förstasidan
Home Statistics Metadata Data collections Products and services News Statistics Finland
Statistikcentralen
Statistics Finland PalloTelephone +358 29 551 1000 PalloContact information PalloCopyrights and Terms of Use Pallo Feedback