Migrant entrepreneurship increases significantly

A new study by PTT, Pellervo Economic Research, shows that the significance of migrant business owners in the economy has grown remarkably in recent years. The share of migrant business owners in all businesses has grown, as has the share of migrant employees among all employees.

Migrant business owners are a significant group, particularly in the hotel and catering, logistics and warehousing, and administration and support service sectors.

The study found that migrants’ share among all business owners was 10.5%, and among employees 8.6%, in 2022.

Migrants’ self-employment incomes were higher than other business owners’, particularly in the hotel and restaurant and IT and communication sectors, but also in industry, the administration and support service sector, and in professional, scientific and technical business.

“Even though migrant business owners’ self-employed incomes are on average lower than others’, there are sectoral differences here,” the economist Juho Alasalmi says.

The share of migrant employees, in turn, is particularly large in sectors dominated by international organizations and bodies, as well as in the agriculture, forestry and fishery, hotel and restaurant, and administration and support service sectors.

Migrant employees’ earnings are on average lower than other wage earnings. In some sectors, particularly in IT and communications, wage earnings are on the same level as the Finnish-born population.

Business ownership higher among migrants than Finnish-born population

In 2022, 11.9% of working migrants were business owners, whereas the corresponding figure for the Finnish-born population was 9.9%. Business ownership is thus higher among migrants than the Finnish-born population. The share of business owners among migrants has grown since 2018 in particular. Entrepreneurship has increased among migrants born in Africa, Estonia and Russia, especially.

An increasing number of business owners do not earn self-employment income at all, but do receive wages. The sharp rise in the platform economy and light entrepreneurship is potentially behind the findings.

“Sole traders mostly pay themselves self-employment income, whereas light entrepreneurs are primarily paid wages through an invoicing service. Thus, the changes to the income structure show that one of the factors behind the rise in self-employment is the growth of light entrepreneurship,” says Senior Economist Henna Busk.

Migrant-owned businesses create new jobs

The number of migrant-owned businesses with employees grew significantly between 2013 and 2021. In 2021, the number of migrant-owned companies with employees was around 14,000.

The share of migrant-owned businesses of all business-owner-run businesses in the sector was highest in the restaurant sector, as well as in the postal and courier sector, which includes food delivery riders. Around half of migrant business owners’ businesses are sole traderships, while the rest are limited companies. However, most businesses are young and very small – micro-enterprises with fewer than one full-time employee.

“However, the results indicate that migrant business owner companies could have an outsized significance in creating jobs. “Migrant business owners’ micro- and small enterprises created more new jobs than owners of similarly sized businesses between 2014 and 2019,” Henna Busk says.

During the period studied, there was a significant rise in the turnover, added value and headcount of migrant-owned businesses, as well as the shares of these indicators among all business owners’ businesses.

The study investigated working migrants as employees and business owners in a range of sectors. In addition, it investigated migrant-owned businesses. The study drew on Statistics Finland’s unit- and business-level register data for the years 2010–2022. The full report is available on the PTT website here.

The study was funded by Suomen Yrittäjät, the trade unions Suomen Ekonomit, TEK and Inisinööriliitto, and the Finnish Pension Alliance.

Further information

Economist Roope Ohlsbom, Suomen Yrittäjät, roope.ohlsbom@yrittajat.fi, 050 352 8565

Senior Economist Henna Busk, Pellervo Economic Research PTT, henna.busk@ptt.fi, tel. 040 164 8136

Economist Juho Alasalmi, Pellervo Economic Research PTT, juho.alasalmi@ptt.fi