FINLAND Law and Practice Contributed by: Christoffer Waselius, Jaakko Huhtala and Niko Markkanen, Waselius
included Schibsted Media’s SEK6.55 billion acquisi - tion of TV4 Media (including Finland’s MTV) and Hell - man & Friedman’s investment in Mehiläinen. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions The Competition Authority Effectively Managing the Increased Number of Merger Control Notifications At the end of 2022, the turnover thresholds for merger control notifications were significantly lowered due to changes in the Finnish Competition Act. Following the changes, the number of notifications made to the Finnish Competition and Consumer Authority (FCCA) has subsequently doubled after a temporary decline in M&A deal activity in Finland in 2023–24. However, this has not delayed the investigations to a significant extent. The FCCA has no competence to call in transactions remaining below the turnover thresholds, but the FCCA increasingly considers a possibility to inves - tigate acquisitions under rules on Abuse of Domi - nant Position. On this basis, the FCCA has already launched two investigations, one in private healthcare and one in the chemical industry. Vigilance in the Monitoring of Foreign Corporate Acquisitions Due to the Russia–Ukraine war and increased atten - tion paid to resilience and security concerns, the Ministry of Economic Affairs and Employment has recently been very vigilant regarding transactions related to national security or security of supply, as well as transactions in the healthcare sector. The Ministry of Economic Affairs and Employment follows public announcements in the media regarding trans - actions. If a transaction is not notified to the ministry, it may intervene even after the signing or closing of the transaction in cases where the ministry considers it necessary under the Act on the Screening of Foreign Corporate Acquisitions. Despite Finland’s positive attitude to foreign investments, it cannot be excluded that the Council of State could use the possibility to prohibit an acquisition if the target company is active
in a sector critical for the defence, national security or security of supply. Finnish Interest Limitation Rules The Finnish interest limitation rules have had a sig - nificant impact on the use of leverage (on both a fund and at holding company level), but also on feeder fund structures using, for example, profit-participating loans. During the last few years, extensive discussions con - cerning the taxation of carried interest have also taken place, as the tax authorities previously concluded that carried interest should be taxed as earned income of the manager. However, as a result of current case law, carried interest is now taxed primarily as capital income of the manager, if the arrangement itself does not constitute tax avoidance. Accordingly, the legal form of the structure is normally upheld and carried interest is deemed as a return on investment. EU Legislation Recent developments at the EU level have introduced legislation with respect to the reporting of cross-bor - der transactions as well as taxation of hybrid trans - actions. The former provides an obligation to report cross-border transactions that have certain charac - teristics identified as potentially indicative of aggres - sive tax planning, and the latter imposes limitations to hybrid arrangements, where the tax treatment of income/expenses differs between jurisdictions. 3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues In general, Finnish M&A transactions are governed by national legislation and EU regulation. The main national legislation includes: • the Contracts Act (228/1929, as amended); • the Sale of Goods Act (355/1987, as amended); • the Companies Act (624/2006, as amended); • the Employment Contracts Act (55/2001, as amended), relating to the transfer of employees in asset purchases or transfers of undertaking in particular;
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