Status of data centre projects in Finland

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Finland is currently experiencing a data centre boom, with several new data centre projects underway across the country. Data centres have also faced some criticism in the news, particularly due to their high electricity consumption and security concerns. They require large amounts of electricity or water for cooling, although Finland’s cool climate helps reduce this need. A cool climate, a reliable electricity grid, and the availability of renewable energy make Finland an attractive location for new data-centre projects.

There are also views that data centres are not the type of investment Finland particularly needs. However, they do offer benefits: they generate tax revenue for municipalities and the state, provide employment, especially during the construction phase, and enable the use of waste heat for district heating.

National roadmap for data centres and electricity tax reform

In June 2025, Prime Minister Petteri Orpo appointed Veli-Matti Mattila as rapporteur to prepare a national roadmap for data centres. The aim was to draw up a national roadmap for data centres that are essential for value creation in the data economy, complementing the government's data economy growth programme.

The political context for this initiative emerged from concerns about the fiscal implications of data centres' electricity consumption and their contribution to public finances as well as the effects on household electricity prices.

A central question in the political debate was whether data centres should continue to benefit from the reduced electricity tax rate (tax category II) or be moved to the higher general consumption tax rate (tax category I). In October 2025, the government published a draft law proposing that data centres be moved to tax category I.

Proposed change in the electricity taxation and the impacts of the tax reform

According to a government proposal (HE 156/2025 vp), the Act on Excise Duty on Electricity and Certain Fuels is proposed to be amended so that the tax on electricity used in data centres would be moved from the lower electricity tax category II to the higher general electricity tax category I as of 1 July 2026. As a result, the proposed change would increase the tax on electricity used in data centres by 2.19 cents per kilowatt hour, rising from 0.05 cents in the lower category II to 2.24 cents in the general category II

The proposed change has not yet been approved by the Finnish Parliament, but is expected to be handled by Parliament in early 2026. The increase in the electricity tax on data centres has been a topic of heated debate among the governing parties. As part of their compromise, the parties agreed that a new form of support will be prepared.

New support scheme in the pipeline

As part of the compromise between the governing parties, it has been agreed that a new form of support for data centres will be prepared. According to a government press release, the cost of the new scheme should not exceed the amount of the electricity tax subsidy that is being abolished. However, media reports suggest that the new support will be financially smaller than the current electricity tax relief.

According to the Ministry of Finance, the future incentive scheme will apply particularly to value-added data centres. The new subsidy is scheduled to enter into force in autumn 2026, immediately after the current electricity tax relief expires. It is likely to take a form other than a direct electricity tax reduction.

At present, the details, conditions and amount of the new support scheme are still under preparation, and a separate proposal is being drafted by the Ministry of Employment and the Economy. The overall package is still being assessed, and the final model has not yet been decided.

Special permits for data centre investments

Currently, activities in data centres do not in principle require a specific permit.

However, for real estate transactions, non-EU and non-EEA purchasers need a permit from the Ministry of Defence to purchase real estate in Finland if their ownership or equivalent effective influence exceeds 10%. However, most data centre users do not own data centres themselves, but lease them from data centre operators, in which case the real estate permit procedure will not apply. In the permit process for foreign real estate acquisitions, only the national security implications of the data centres’ locations are examined.

The Act on the Screening of Foreign Corporate Acquisitions in Finland (172/2012; the “FDI Act”) allows for intervention in foreign ownership in the case of acquisitions of security-critical companies. The underlying principle of the FDI Act is a positive attitude toward foreign investment, but the authorities have the ability to monitor the ownership structure of companies essential to security of supply and national security and, if necessary, to restrict foreign ownership.

However, the current FDI Act does not cover service agreements between companies, such as lease agreements, nor does it apply to so-called greenfield investments, where a foreign entity establishes an entirely new company or data centre in Finland.

Activities performed within data centres currently do not require a specific license. However, for real estate transactions, if the ownership or equivalent effective influence exceeds 10% of a non-EU and non-EEA entity, they are required to obtain a permit to acquire freehold real estate in Finland. However, most data centre users do not own data centres themselves but lease them from operators. 

In spring 2025, the Ministry of Economic Affairs and Employment (TEM) published an evaluation memorandum on the reform of the Act on the Screening of Foreign Corporate Acquisitions (172/2012). The memorandum proposes that greenfield investments (the establishment of new companies) should be brought within the scope of the law to a limited extent. Because assessing the safety-critical nature of investments at the start-up stage is challenging, sector-specific monitoring has been proposed as an alternative. Under this approach, the law would apply only to a limited number of key sectors, such as mining and minerals, batteries, wind power, nuclear energy, cloud computing, and critical transport infrastructure. This raises the question of whether, in the future, the law could also extend to data centre projects in cases of greenfield investments by non-EU or non-EEA entities. 

Location, electricity supply, planning, and other key permitting procedures

Location has traditionally been a key factor in real estate development. For data centres, however, the most critical criterion during the development stage – apart from location – is securing sufficient electricity capacity. Projects are typically situated near substations, either on undeveloped land or on former industrial sites where the city zoning plan already permits data centre operations. If the zoning plan does not allow this, an amendment is required – a process that is often lengthy, potentially taking years and involving multiple rounds of appeals. In addition, a developer should be aware that the construction of a data centre project may require a number of different permits and procedures which we discuss separately in our article "Permits and procedures required for data centre projects."