Estonia: Investing

FDI in Figures

Foreign investment has progressively developed in Estonia during the last ten years, led by the favorable market economy and a regular growth.  Estonia possesses a large potential to attract FDI and it is one of the leader countries in Central and Eastern Europe in terms of investment inflows per capita. 

However, FDI dropped sharply in 2008-2009 due to the economic crisis which heavily affected the country's economy and that of the investing countries, going from USD 2.7 billion in 2008 to USD 1.7 billion in 2009.  They have slightly recovered in 2010.  The adoption of the Euro as its currency in January 2011 is a turning event very much expected for the country's economy.

Why You Should Choose to Invest in Estonia

Strong Points

The country's main strong points are:
- A sound and liberal economic policy;
- A highly trained and flexible labor force;
- A geographical location at a crossroads between Europe and Russian;
- Its European Union membership, .

Weak Points

The country's main weaknesses are:
- A small domestic market;
- The dominance of Finnish and Swedish products;
- A purchansing power well below that shown in the other countries in the region.

Government Measures to Motivate or Restrict FDI

In terms of investment, trade, government intervention and property rights, Estonia developed policies that are amongst the most liberal in Europe. The company taxation rate is relatively low compared to other Nordic countries, a fact which is one of the country's strong points. In order to encourage companies and attract foreign direct investment, all reinvested corporate profits are exempt from income tax.

Procedures Relative to Foreign Investment

Freedom of Establishment

Freedom of establishment is guaranteed.

Acquisition of Holdings

A majority holding interest in the capital of a local company is legal in Estonia. However, it is possible to get information directly from the Estonian Agency of Investment which is the unique body with the aim of informing foreign investors.

Obligation to Declare

Estonia does not apply any restrictions or limitations on foreign investment. However, certain activities (mainly those linked to medicine and safety) remain subject to an "activity license".

Competent Organization For the Declaration

Estonian Investment Agency

Requests For Specific Authorizations

Estonia has no exchange controls or restrictions on foreign investment. The amount of foreign capital invested in Estonian business enterprise is unlimited and companies can be in full foreign ownership. Foreign companies enjoy equal rights with local ones. A license should be obtained for activities in the following areas: mining, public utilities, reconstruction of railways, airports, ports and dams, long distance telecommunications, retail sales of pharmaceuticals, production of alcohol and tobacco, gambling, banking. The basic rules for licensing are included in the Regulation of the Estonian Government from May 8, 1990 on Issuing Statutory Activity Licenses.

Investment Opportunities

Investment Aid Agency

Invest in Estonia

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Estonia
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Estonia
DgMarket, Tenders Worldwide

Other Useful Resources

Estonian Chamber of Commerce and Industry

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