This economy profile presents the Doing Business indicators for Estonia. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 2014 (except for the paying taxes indicators, which cover the period January–December 2013).

Economic growth is projected to strengthen gradually. Strong wage growth will fuel private consumption and investment will recover somewhat. Export growth will pick up only slowly, however, hampered by weak economic growth in some of Estonia’s main trading partners.

Flexibility and openness are the characteristics and pervasive principles of Estonia’s economic policy. Estonia is an e-country with a favourable business climate and cost advantages that is also open to growth.

Estonian economic indicators and statistics

The first section presents the Ease of Doing Business rank (out of 189 economies) and the distance to frontier (DTF)** measure, overall and by topic. The second section summarizes the key indicators for each topic benchmarked against regional averages.

According to the Commercial Code there are five forms of business entities, which are created by entry into the Commercial Register:  private limited company, public limited company, general partnership, limited partnership, or commercial association.

Foreign investors who set up companies in Estonia should be informed about all the types of structures and their particularities. Only by knowing the differences between companies, can investors choose the most suited one for their business.

The Commercial Code provides for five types of business entities: general partnership (täisühing), limited partnership (usaldusühing), private limited company (osaühing), public limited company (aktsiaselts) and commercial association(tulundusühistu).

The e-Business Register is one of the first services of the Estonian Centre of Registers and Information Systems, being the basis for developing the Company Registration Portal and the Visualised Business Register.

Estonian website for business registration information including the types of entities and instructions for registration.

The Corporate Tax Rate in Estonia stands at 20 percent. Corporate Tax Rate in Estonia averaged 23.62 percent from 1995 until 2015, reaching an all time high of 26 percent in 1996 and a record low of 20 percent in 2015. Corporate Tax Rate in Estonia is reported by the Estonian Tax and Customs Board.

The current VAT Act was introduced effective from 1 May 2004 when Estonia joined the EU. VAT as such was introduced in Estonia effective from 1992 and is known in Estonian as “käibemaks”. 

The Estonian tax system consists of national taxes and local taxes collected by local governments in their jurisdiction. National taxes include income tax, social tax, land tax, gambling tax, value-added tax, duty and excise taxes and heavy goods vehicle tax.

The Personal Income Tax Rate in Estonia stands at 21 percent. Personal Income Tax Rate in Estonia averaged 23.90 percent from 1994 until 2014, reaching an all time high of 26 percent in 1995 and a record low of 21 percent in 2008. Personal Income Tax Rate in Estonia is reported by the Estonian Tax and Customs Board.

There are two kinds of income tax – personal income tax and corporate income tax (income tax of a legal person is also paid by all employers who have non-resident permanent places of activity and offer fringe benefits). Besides paying corporate income tax, you are required as an employer to withhold and pay employees’ income tax to the Tax and Customs Board.

Value-added tax, known as VAT, is levied on goods and services sold in the course of business, import of goods from non-EU countries and acquisition of goods from European Union countries. Value-added tax is paid by the end consumer.

Ministry of Foreign Affairs – Nationals of the European Union (EU), the European Economic Area (EEA) and any third-country national holding a residence permit of a Schengen State do not need a visa to enter Estonia.

Visa information for tourists, students and business

A residence permit is needed by residents of third countries and by people with an unknown citizenship status. When a residence permit is provided or renewed, a residence permit card is issued for the foreign national. 

Aliens, who are residing in Estonia on the basis of residence permit, are, in general, permitted to work in Estonia. Starting from 01.09.2013 separate work permits shall not be issued in Estonia any more. The work permits, which have been issued before 01.09.2013, shall lose their legal effect in respect of an alien’s right to be employed or lack of right to be employed in Estonia, and the employment right of such person shall further derive from the Aliens Act. 

The Estonian transport system comprises rail, road, maritime, river, and air transport as well as the municipal electrified transport and carriage by pipeline. The infrastructure of national transport has generally been well established; due to high competition, the local logistics and transport companies have reached the western standards in terms of service and quality and have great transport potential.

has information about flights, trains, car hire, ferries, taxis, buses, coaches and even getting around on foot, by bicycle or by boat.

The telecommunications market in Estonia is among the most liberalized in Eastern Europe. In 1998 a 49 percent stake in the state-held Eesti Telekom was sold to a consortium of state-controlled Telia (Sweden) and Sonera (Finland), and the government was considering selling the remainder of its stake in the company.

The National Telecommunications act in the second period of Estonian independence granted a Monopoly on international and local fixed line telephony to Estonian Telecom (Eesti Telecom). In the process of privatization, a concession was granted to liberalize mobile, CATV and packet-switched telecommunications. This concession was critical for developing a competitive market.

Scope of employment regulations including minimum wage, worktime restrictions, employee representation

Republic of Estonia Social Insurance Board

The most important statutes and rules regulating the activities in the labour market are the Constitution of Estonia, Conventions of International Organization of Labour, Employment Contracts Act,  Collective Agreements Act, Trade Unions Act and several enactments of the Government and Ministries of Estonia.

Employment Contracts Act

The social protection system is made up of two pillars: the social security system that comprises pension insurance, health insurance, child benefits, unemployment benefits and funeral grants; and the social welfare pillar that consists of social assistance cash benefits and social services. 

Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Estonia, the average household net-adjusted disposable income per capita is USD 15 167 a year, less than the OECD average of USD 25 908 a year.

Cost of living information includes price indices for rent, food, utilities, transportation, restaurants, clothing and more

The weather in Estonia is largely dictated by its closeness to the Baltic sea. In the summer the skies are blue and temperatures can reach 30° Celcius and the summer average is a very pleasant 16.4°C. In summer there can be 19 hours of daylight, known locally as the “white nights”.

US Department of State – Go to Safety and Security for updates from the Estonian government

Nestled away in Europe’s Baltic region, next to Russia and the Gulf of Finland, Estonia is home to 1.34 million people. Tallinn, the country’s charming capital, is famed for its picturesque old town, exciting nightlife and thriving tech scene.

The basic compulsory educational system in Estonia is the nine-year comprehensive school (Estonian põhikool, “basic school”), for which school attendance is mandatory (homeschooling is allowed, but rare).

The current Estonian educational system consists of pre-school education, basic education, general secondary education, vocational education and higher education.

When doing business in a foreign country it is necessary to be prepared to experience things that are different from your own culture. 

The dos and don’ts of business etiquette in Estonia

The climate of the Estonia can be described as typical European continental influenced climate with warm, dry summers and fairly severe winters. January is the coldest month with daytime temperatures usually around -5°C, but in some cases winter months can be quite colder with temperatures far below zero, about -20°C or lower and strong, cold northeasterly winds.

Schedule of national and seasonal holidays

Estonian Holidays

Demographic information includes population, quality of life, health, sports, technology, energy and the environment

Estonia’s population is 1,340 million people (as of 1.01.2010)…….

Top exports and imports and top destination countries and countries of origin

You have decided to come for a bigger stay in Estonia, and don’t want to stay in Hotels or Hostels. You want to rent your own flat. So, what do you do?

In Estonia a visitor’s apartment is an accommodation establishment with food-preparing facilities which is rented out in its entirety.

As travel industry support body, ETB is part of the Enterprise EstoniaExternal link network and contributes to achieving its goals by implementing business and regional development policies and, in close cooperation with its partners and clients, increase the competitiveness of Estonian business environment. A guide to travel to Tallinn and other cities in Estonia.