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Concepts and definitions

AMNE

Activities of multinational enterprises. Measures describing the activity and role of multinational enterprises in general, irrespective of whether it is financed by a foreign investor or not (cf. direct investment).

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).

Business ID (Identity code)

Business ID, or business and organisation code, is an identifying code given by authorities to all legal units.

The Business ID consists of seven numbers, a hyphen and a control number.

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 foreign owner

Direct foreign owner is a non-resident enterprise with a direct holding of over 50 per cent of the voting rights of a resident enterprise. Cf. Direct foreign parent.

Direct foreign parent

Direct foreign parent is a non-resident enterprise with a direct holding of over 50 per cent of the voting rights of a resident parent enterprise. Cf. Direct foreign owner.

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.

Enterprise

An enterprise is a unit with decision-making autonomy, which produces goods and/or services to be sold on the market.

Enterprise corresponds to legal unit, if the legal unit is not part of an enterprise group. Otherwise, the enterprise is an enterprise group or part of one.

The definition of enterprise is based on the EU regulation concerning statistical units (EEC) 696/93.

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 corporation

A foreign corporation is a unit which is registered in Finland in order to declare its sales including VAT but which does not have a permanent establishment in Finland. These units are not included in the enterprises of the Business Register. Cf. Branch.

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.

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.

Institutional unit

The institutional unit is an elementary economic decision-making centre. A resident unit is regarded as constituting an institutional unit if it has decision-making autonomy in respect of its principal function and either keeps a complete set of accounts or it would be possible and meaningful, from both an economic and legal viewpoint, to compile a complete set of accounts if they were required. Decision-making autonomy means that institutional units are capable of owning goods and assets, of incurring liabilities and of engaging in economic activities and transactions with other units in their own right.

The following are deemed to be institutional units:

a) units which have a complete set of accounts and autonomy of decision:

(1) private and public corporations

(2) co-operatives or partnerships recognised as independent legal entities

(3) public producers which by virtue of special legislation are recognised as independent legal entities

(4) non-profit institutions recognised as independent legal entities

(5) agencies of general government.

b) units which have a complete set of accounts and which are deemed to have autonomy of decision: quasi-corporations

c) units which do not necessarily keep a complete set of accounts, but which by convention are deemed to have autonomy of decision:

(1) households

(2) notional resident units.

The institutional units are grouped together into five mutually exclusive institutional sectors which together make up the total economy. The sectors (each sector is also divided into sub-sectors) are composed of the following types of units:

a) non-financial corporations

b) financial corporations

c) general government

d) households

e) non-profit institutions serving households.

Legal unit

A legal unit is a corporation, or an organisation registered for conducting business. A legal unit is identified with a Business ID.

Legal units are, for example, limited companies, private practitioners of trade, co-operative societies, state-owned companies and foundations.

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.

UBO

Ultimate beneficial owner. A UBO is an institutional unit controlling a foreign affiliate, i.e. an institutional unit up a foreign affiliate's chain of control, which is not controlled by another institutional unit.

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): Foreign affiliates in Finland [e-publication].
ISSN=2242-2552. Helsinki: Statistics Finland [referred: 19.3.2024].
Access method: http://www.stat.fi/til/ulkoy/kas_en.html