Why Set Up Business in Estonia?

Why Set Up Your Business in Estonia?

Home to a population of 1.3 million, Estonia is a lowland country situated on the northeastern edge of the European Union. Bordering Finland, Baltic Sea, Latvia, and Russia, Estonia is a small Nordic country with the stable economy and rapid development. Its strategic location at the intersect of European, Nordic and Russian markets has positioned the country as one of the important crossroads where the unique set of trade, language and cultural linkages meet.

 

An Overview of Estonian Economy

As one of the members of the World Trade Organization, of the European Union, of the Organization for Economic Co-Operation and Development (OECD) and NATO, the Estonian economy is categorized as highly flexible, open [to international capital and trade flows] and vibrant. Supported by the state-of-art infrastructure, Estonia offers a good business environment and plentiful of investment opportunities. Many foreign investors see it as a gateway to growth will drive further investment and deeper regional linkages. Apart from this, Estonia gains its traction as a good source of start-ups. The balanced state budget, liberal trade and investment laws, as well as business opportunities, are the impetus behind the economic success of Estonia.

In addition to this, Estonia earned its higher ranking at the 30^th in the World Economic Forum’s Global Competitiveness Index 2016-2017 among 138 countries. The achievement has shown that Estonia portrayed economic competitiveness, the quality of public institutions and the macroeconomic environment in the region. In addition, the World Bank ranks Estonia 12^th in its Doing Business in 2017 report that covers 190 countries.

 

Why Invest in Estonia

Estonia welcomes foreign investors through its pro-business legislation. The Estonian government offers incentives that capture the attention of foreign investors. In Estonia, IT sector, the biotechnology sector and regenerative industry are the most attractive investment fields.

Let us take a glance at the reasons why investing in Estonia?

1. Sound business environment

The Estonian business environment appeals investors due to many reasons:

• • • Estonia sat at the crossroads between Europe and Russia, a position that gives the country the geostrategic significance in business and trading;
    • Foreign companies are exempted from any tax on reinvested profits;
    • Highly skilled and well-educated human resource;
    • Fast and easy company incorporation process
    • Strong and stable banking industry;

2. Foreign investments

• • • The Estonian government supports foreign investment with its liberal regulations for exports.
    • Foreign investors have 100% foreign ownership.
    • The country’s conversion and transfer policies pose no restriction for transferring or converting currencies.
    • Foreign investors have the right to own properties in Estonia.
    • Estonia adopted the Bankruptcy Act in 2004 that eases the process of company liquidation.

3. Taxation

Another key point that attracts foreign investments is the taxation system. There is no corporate tax in Estonia where foreign companies are only subject to the income tax of 21%. In addition to this, Estonia has signed double taxation agreements that appeal to more foreign investors.

On a final note, Estonian advantageous economic offers a promising investment platform for business. The Estonian government welcomes foreign investors to venture into the country by implementing pro-business policies as well as creating the good business environment. If you are planning to traipse into the EU markets, Estonia has a lot to offer.