1. Market overviews
The Nordic countries’
construction industry
by GatewayBaltic
www.gatewaybaltic.com

2. We are the leading company in the
Baltic states providing Market and
Export Intelligence services

3. In short
We add value with our local knowledge and expertise in
markets combined with a professional and personal approach
Markets:
Baltic states: Latvia, Lithuania, Estonia
Nordics: Sweden, Norway, Finland, Denmark
EU: Germany, Austria, France, UK, Spain and other EU
Eastern Europe: Poland, Czech Republic and other CEE
CIS: Russia and Belarus
We have served over250 clients in their international
market developemnt
Partners:

4. Our way
We are a Gateway for businesses entering the
Baltic states and an opening for Baltic companies
to international markets
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Market Intelligence solutions for Export Intelligence services for
companies interested in up-to- companies interested to enter
date market information on international markets with
clients, competitors, suppliers partner screening and attraction,
and markets. sales channel creation and
export management.

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expert
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GatewayBaltic has expert team
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expert
intelligence, market expert
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market expert
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expert
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expert

6. Clients

7. Client: VOKE III
Norway, Sweden|
Kitchen, bathroom furniture
Task: To attract potential partners in Norwegian market
Partner search
Defining the partners Result
Overall 22 companies were
-Housing developers selected in Norwegian and Trade missions to Norway and
26 in Swedish market. Sweden were organized to
- Construction companies meet 16 potential
After communication, 8 cooperation partners and
- Loghouse and panel house builders companies from each discuss the possible
country have expressed collaboration in the near
willingness to meet with future.
the representatives.
As a result of the project Voke
III has done the first delivery
to Norwegian market.
Feedback from client:
” We really appreciate our cooperation
and in our opinion Your company is in
much higher league than other consultant
services. The business meeting in Norway
was very useful; companies are willing to
cooperate with us in the future.”

8. Client: Belmast
Norway| Metalworking
Task: To identify and communicate with potential partners in
Norwegian market to develop export for fabricated steel structures
Defining the partners Partner search Result
- Construction Identified 20 potential Organised two day trade mission
companies partners in Norway. to Norway to meet 5 companies
with assistance of representative
- Mashine building After communication with
from GatewayBaltic.
manufacturers in potential partners, five
energy sector express interest to meet After the business visit to Norway,
with Belmast to discuss Belmast received first order from
- Similar producers
potential cooperation Norwegian partner for custom
possibilities. made steel constructions.

9. Client: Windex
Sweden
| PVC windows and doors
Task: To assist company in finding partners in the
Swedish market
Defining the partners Partner search Result
- Wholesalers of PVC windows Overall 24 companies have been Paulius Berezuckis, Business developer,
- Construction companies identified and included in the potential Windex
partner list. 20 companies have been
- Manufacturers of PVC windows successfully contacted. Within a short period of time and
reasonable cost Gatewaybaltic managed
5 companies have expressed to select potential target customers as
willingness to meet with Windex well as arrange business meeting with
representatives. them. GatewayBaltic most definitely
highly professional team, providing its
7 companies were interested to services right on schedule and according
consider a meeting in the future. to our expectations! Great job!

10. Client: Tenapors
Norway| Sandwich type panels /construction materials
and heat insulation materials
Task: Identify potential partners in Norwegian market to find
new cooperation opportunities
Defining the partners: PARTNER Identification RESULT
- Wholesalers of building 20 enterprises working in Business trip to Sweden were
materials construction sector were organized to meet four of the
identified as potential potential partners and have a
- Construction companies cooperation partners. discussion about possible
After communication, 6 cooperation opportunities in
companies showed interest the near future.
regarding potential cooperation With one of the largest
possibilities with Tenapors. construction companies in
Norway, Tenapors has started
cooperation.

11. Client: Eco House Industries
Sweden| Manufacturer of timber frame houses
Task: To attract new cooperation partners to expand its operations
in Swedish market
Defining the partners Partner search Result
- Real estate companies We selected 31 potential Organised three day trade
companies in Sweden. mission in January 2010 to
- Building companies Sweden to meet 7 companies
After the communication, 9
- House manufacturers companies expressed interest and discuss the further
but 6 from them were willing to cooperation opportunities for
meet with EHI to talk about sales of wooden frame houses
possible plans in the future. to Sweden.

12. Client: AmberWood
Sweden| Woodworking
Task: Identify and communicate with potential partners in Swedish
market to develop export for fabricated solid wood flooring boards
Defining the partners Partner search Result
- Importers of wood flooring Identified 20 potential partners Organised one day trade mission
in Sweden. in February 2010 to Sweden to
- Wholesalers of wood flooring meet 1 company. And organised
After communication with
- Similar producers potential partners, two one day visit of Swedish
expressed interest to meet with company in Latvia.
- Flooring installation service
companies Amber Wood to discuss First order from Swedish partner
potential cooperation was received in February 2010 .
possibilities.

13. Common characteristics
 Amongh top countries in means of GDP per capita and income in Europe
 Developed markets, but with a strong focus on workers’ rights and socio-democratic principles, and high tax rates
(up to 60% of income): the Nordic capitalism model
 Infrastructure construction more stable than residential, but trends still vary in each country
 Very strong trade unions that have a significant impact on the labour market and are closely following foreign
workers’ inflow
 Unions are organized into 3 levels: a pan-country union, sector unions, and profession-unions
 Registration requirements for foreign workers in all 4 countries, and only Denmark does not have a construction workers ID cards
system yet
 No universal minimum wage: collective agreements with the relevant unions in the industry determine the minimum pay levels
 The Laval case in 2007 established some protection for foreign subcontractors against unions’ industrial action (blockades),
though Laval still went bankrupt
 Foreign firms still typically work as subcontractors and their specialists as unskilled workers, as mostly just local professional
qualifications are recognized
 Main pan-EU legislation: Posted Workers Directive 96/71/EC
 Posted workers must have a clear, temporary posting period and stay in the country for less than 183 days/year in order not to be
regarded as local tax residents
 The number of illegal construction workers in Norway, Sweden and Denmark is estimated at 20,000 or more per country
 Social security laws, due to EU regulations, permit home country social insurance for posted workers, if they can
display an E101 form by their home country’s social insurance authority
 Retrieve such forms timely, so that contracts in the Nordics are not delayed; local work time, sick pay, holiday regulations and
work safety requirements still must be observed

14. Sweden
 Population of 9.1 million, average salary of 3,900 EUR/month
 Construction turnover in 2010 reached 1,000 billion SEK, or 112.3 billion EUR, and
forms 8% of GDP
 About 500,000 or 11 % of total workforce is employed in construction
 Investments into construction were at 29.9 billion EUR in 2010: one of the lowest
levels in the EU: the market only dipped in 2009 and early 2010, but construction
volumes will have to increase, especially around Stockholm and other big cities
 Stockholm area expects population growth by up to ¼ from 2 million to 2.5 million by
2030: heavy need for scaling up new housing construction
 Housing construction still makes up the most of new projects in means of total floor
area
 Undeclared construction still frequent, but also targeted by the authorities
 Current illegal employment estimated at about 20,000 foreign construction workers
 Inspections at sites carried out both by authorities and by own monitoring activities of
the relevant unions

15. Key legal features: Sweden
 Foreign workers from the EU do not need a work permit, but, if staying for longer than 3
months, must register with the Swedish Migration Board
 If staying in Sweden for 183 or more days per year, foreign workers are considered tax
residents and must pay Swedish income tax
 If exceeding the 320,000 SEK/year sales threshold in Sweden, a company must register
locally for VAT
 Workers with a valid E101 form from their home social security authority do not have to pay
local social security contributions, unless they qualify as tax residents
 Collective agreements set the minimum pay rates in construction, which are not publicly
available, but the average wage in construction is at about 150 SEK/hour; the average wage
overall in Sweden in 2010 was 28,400 SEK/month
 Building defects insurance is required for at least 10 years as of the date of the final
inspection of the building (but not for works that do not require a building permit, though it
is also expected to have 2-5 years warranty)
 An ID06 card must be carried by all workers on construction sites

16. Norway
 Population of 4.9 million, second wealthiest in the EEA after Luxembourg
 Construction together with mining generates 15% of GDP and employs 193,000
 Residential construction is booming currently: in some quarters of 2011, new
projects were up by 40% compared to respective periods in 2010
 Very high proportion (80%) of dwellings is owned by the inhabitants, and a
relatively large number of households have their own holiday houses: clients
may as well be private persons
 Hydropower facilities, northern roads, many islands and challenging nordic
climate all require infrastructure maintenance and further development
 A non-EU, but an EEA country – the labour environment is generally similar to
that in neighbouring Nordic countries
 The StartBANK supplier assessment system is widely used by large contractors

17. Key legal features: Norway
 Foreign workers from the EU do not need a work permit, but, if staying for longer than 3 months, must
request a residence permit; after staying in Norway for 183 days/year or 270 days over any 36 month
period, they are regarded as tax residents; even if residing in Norway for less than 6 months, workers
should apply for a tax card
 All contractors performing construction works in Norway worth 10,000 NOK or more must report these
projects to the tax authority via the RF-1199 form (along with information on their employees sent to
Norway)
 If exceeding the 50,000 NOK/year sales threshold in Norway, a company must register locally for VAT or
appoint a local representative who shares VAT liability
 Workers with a valid E101 form from their home social security authority do not have to pay local social
security contributions, unless they qualify as tax residents
 By collective agreements, the lowest wage in construction, depending on 4 qualification classes, is 96
NOK/h (for assistants with no experience and under the age of 18, while skilled workers may have a
minimum rate of 159 NOK/h)
 New housing must have a warranty of at least 5 years (this requirement may be increased in 2012);
contractor insurance is not mandatory in Norway
 The green Byggekort must be carried by all workers on construction sites
 Norwegian legislation has its specifics, relying on fair dealing between the parties in a transaction, rather
than on the written contracts; B2B offers are formally binding until their expiry date

18. Finland
 Population of 5.36 million, average salary about 2,900 EUR/month
 State subsidized housing construction helped smooth out the drop in private
residential projects in 2009, but now private projects have fully recovered
 A relatively balanced construction projects portfolio by type: residential
construction continues to have the largest floor area, but public, commercial and
industrial, agricultural construction clients are also active
 Estonian firms are bidding even as general contractors for social housing projects
in Helsinki area, though none have been awarded contracts thus far
 Workers may be posted for up to 6 months
 Minimum wages by the Rakennusliitto union are based on the employee’s skill
level, and range from 9.49 to 13.26 EUR/h
 Statutory accident insurance is mandatory and if not taken, will be covered by the
Federation of Accident Insurance Institutions, but expenses of up to 2,100 EUR
will be collected from the employer
 Rakentamisen Laatu (RALA) is the Construction Quality Association, with an
online register of technically qualified companies in each specialist area
 Rakennusliito is the construction industry union with 85,000 members

19. Key legal features: Finland
 Workers (from the EU) need to register with the local police department if staying
for more than 3 months; workers from the “new” EU countries must inform the
Employment Office of their work in Finland within 14 days of commencing it,
indicating their employment terms
For foreign workers
 Foreign workers are considered “posted” if working in Finland for up to 6 months; employed by non-Finnish
afterwards, they are regarded as tax residents companies, the Aliens Act
301/2004 and the Posted
 Foreign construction firms may need to register a local affiliate if construction
Workers Act (1146/1999)
projects in Finland last for more than 6 months; local VAT-registration is required if
are the main regulations:
construction projects last for 9 months or longer the construction industry
 Foreign firms must report all construction contracts if exceeding 5,000 EUR union Rakennusliitto has a
turnover per quarter, and must provide information on all their employees active guide in English to these
regulations
in Finland; all workers on construction sites must have a valid ID card
 Statutory accident insurance is mandatory for permanent employees and for
foreign companies in construction works, if the work scope is 12 man-days or
greater, however, posted workers with a valid E101 form from their home social
Construction professionals
security authority do not have to have statutory accident insurance
are certified in line with the
 Construction works and materials must have a warranty of at least 2 years (this EN ISO 17024 standard
requirement may be increased in 2012); contractor insurance is not mandatory in
Finland

20. Denmark
 Population of 5.6 million, average salary about 3,200 EUR/month, but tax burden of up to 57%
 Construction generates about 11% of GDP and employs 143,800
 Residential construction at about 1/3 of the total construction volume, but has decreased, which led
to many construction firms competing for state and municipal construction tenders and dropped
tender prices by up to 40%: quality concerns have been expressed
 Farm buildings and public institutions’ offices are recently actively constructed as well – the offices
because of a new 2010’ law that requires public buildings to have the highest energy efficiency level
by 2015
 Denmark has its own particularly strong expertise in green energy (CHP, wind farms), water
processing (purification and wastewater processing) and engineering consulting: many Danish firms
in these areas have activities or separate projects in the Baltics
 In the 1960-1970s, experiences with many building defects in public housing have led to various
quality control initiatives in construction, and mandatory building defects insurance for new housing
 The Danish tax authorities and trade unions are known for thorough inspections at construction sites
and generally, and unions have taken foreign subcontractors to court for labour law breaches
 Sole labourers who operate as 1-man companies do not have to register for VAT in Denmark, hence
many Polish workers are required to work under such an arrangement in Denmark

21. Key legal features: Denmark
 Workers (from the EU) need to register with Statsforvaltningen, the Regional
State Administration, if staying in Denmark for more than 3 months;
construction workers can stay in Denmark for up to 12 months without paying
taxes locally (in other industries, just up to 6 months) Detailed Building
Regulations of 2010 in
 Foreign workers do not yet have to receive a special ID card, but must be English are available from
entered into the RUT register as of May 2008 (otherwise a 700 EUR fine may be the Danish Ministry of
charged) Economic and Business
Affairs
 VAT registration not required only if working for a VAT-registered local
company, which then must pay the VAT for the received service; otherwise, www.posting.dk is a portal
foreign companies providing services in Denmark must register for VAT dedicated information on
how workers should be
 Foreign firms must register activities in Denmark as of the first day via the form posted to Denmark
40112 to the Danish Commerce and Company Agency
 The Laval case also somewhat changed the Danish legislation and limited the
The Danish Act on Posting is
conditions under which Danish trade unions can take industrial action (typically
the key document with
construction site blockades) against foreign construction services regard to the working
subcontractors wokring in Denmark environment requirements
 Building defects insurance is compulsory in Denmark, and the standard in Denmark
building defects guarantee is 5 years

22. The main Nordic general contractors
 NASDAQ OMX Nordic stock exchanges and the companies’ annual reports are a good source of
information, including their latest developments and project portfolios: these all are listed companies
 Sweden: Skanska, NCC and PEAB Denmark: MT Hojgaard
 Norway: Veidekke and AF Gruppen Finland: YIT and Lemminkainen
A Swedish-origin A Finnish-origin firm,
international player with Swedish origin, core initially in civil
One of the largest players
activities in Europea and activities in the Nordics, engineering, but now also
in Sandinavia, annual sales
the Americas. Germany and in the Baltics. in residential
at about 44 billion SEK and
Roads construction developments and
about 14,830 employees
Has extended activities activities are centered in inudstrial projects.
(2011). Focus on Sweden,
in the U.K. and Norway Sweden and in the St. Focused on the Nordics,
Norway and Finland.
lately, but saw Petersburg area. An the Baltics, Russia, has
residential projects drop upswing in housing sales residential units projects
Construction yields
in Sweden by a factor of and prices recorded in Q4 in Lithuania (2010-2011).
roughly 60%, while civil
2 in 2011, though has 2011. About 17,46 0 Revenue of 4.5billion EUR
engineering and industrial
10,500 workers in employees and net in 2011, employs nearly
construction each roughly
Sweden. earnings of about 52.5 26,000.
20% of turnover. Stable
billion SEK.
growth in 2009-2011.
Skanska is known to Forecasts more growth in
have had Lithuanian Three priorities for 2012- residential projects in
A number of large
subcontractors in the 2015 are growth in Norway, Norway and Sweden in
shopping mall and office,
U.K., though also a bad establishment in civil 2012 than in Finland and
leisure facilities contracts
PR case with underpaid engineering in Finland, and Denmark, and steady
have been secured in the
LT workers at one of its expanding residential growth in the Baltics and
Nordics in late 2011.
sites. developments in the main Russia.
markets.

23. The main Nordic general contractors
 The overall Nordic construction market is still relatively fragmented, despite very strong large local
players taking the bulk of the large projects
 Note that, while 2011’ Q4 results are positive for these firms, margins are pressed due to current
projects being finished with the crisis-years’ prices
A Norwegian international
The group, named after a
player, whose 2011’
Finnish mythological figure,
revenues increased by 2
focuses on the Baltic
billion NOK to 17.7 billion,
region. Net 2011’ sales
after a stagnation in 2010.
grew 24% to 2.3 billion EUR
in 2011, and the company
Norway, Denmark and
employs 8,400.
Stockholm, Gothenburg and
Skone areas are the key
International operations
focus: Norway generates
generated 1/3 (previously
72% of turnover, Sweden
roughly 25%) of turnover. The Nordic construction market shares in 2011
20%, Denmark 8% (in
2011). Industrial Source: NCC
The group aims to expand
construction is less than 1/5
residential construction in
of total group turnover.
Russia (mainly St.
Petersburg) and forecasts a
Forecasts growth in 2012,
busy year for construction
2013 in Sweden, Norway,
in Helsinki metropolitan
then by 2015 a decline to
area.
slighlty above 2011’ level.

24. With pleasure we will
discuss how we can add value to
your business!
Martins Tiknuss
Export and market Intelligence
Martins.tiknuss@gatewaybaltic.com
GatewayBaltic
Elizabetes 51, Riga, Latvia
Tel: +371 26677811
www.gatewaybaltic.com