estonia at a glance. estonian investment agency » investinestonia.com
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ESTONIA AT A GLANCE.Estonian Investment Agency» investinestonia.com
(Map & location)• Area Area 4545 227 227 km2km2
• PopulationPopulation 1,1,33 million million
• Member of EU, Eurozone, Member of EU, Eurozone, OECD, NATO and SchengenOECD, NATO and Schengen
• Credit ratings: Fitch A+; S&P AA-; Moody’s A1
At the Heart of the Baltic SeaAt the Heart of the Baltic Sea
A Message from our President
“Were the internet to have a postal address, it would most likely be here in Estonia. We have reason to be proud of our highly developed telecommunications network. Estonia is a place you can take your laptop into the deepest forest and still hook up to the internet. It is no accident that Skype was born here.”
“Skype represents an ideal of what we think Estonia should be - a small group of people come together and come up with a really brilliant idea that becomes known all over.”
Toomas Hendrik Ilves, President of Estonia
Welcome to e-Estonia!
Why Estonia?
A unique location and culture combining Nordic roots and Eastern influences. The Estonian approach is functional and one that creates timeless value.
A highly progressive environment that offers an efficient way of doing business. Our e-services, mobile communications and internet applications are among the most progressive in the world.
Among the most successful countries in the world in attracting foreign investments. Foreign direct investments account for 85% of Estonia’s GDP.
High Position in Business Environment Rankings
Source: World Bank – Doing Business 2014
1 2 4 59 10 12 14
1721 22
2427 29
45
54
75
Ease of Doing Business Ranking 201411th in Index of Economic Freedom 2014 Wall Street Journal / The Heritage Foundation
7th in Trading Across Borders 2014 World Bank
2nd in the Internet Freedom Freedom House
32nd in Global Competitiveness Report 2014 World Economic Forum
28th in Corruption Perceptions Index 2013 Transparency International
Low risk – Politically and Economically Stable
Political stability. Estonia is seen
as the most stable country in CEE.
Lowest government debt in
Europe. Government debt was 10.0%
in 2013 compared to 54,8% in Finland or
38% in Latvia for example.
A balanced and future
oriented state budget with a
growing interest in entrepreneurs and
foreign investors.
9.078.39 8.13
7.48
6.54 6.496.07
5.49 5.31 5.24
0
1
2
3
4
5
6
7
8
9
10
Risk of political instability, global rank
Source: IMD World Competitiveness Yearbook 2014
The higher the rank, the lower the risk
Estonian GDP by Economic Activity 2013
Source: Statistics Estonia
GDP Growth and Inflation, 2004-2016
7.5
9.2
10.2
7.1
-3.6
-14.1
3.1
7.6
3.2
0.8 0.5
2.53.5
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* 2016*
gdp growth, %
inflation, %
* forecastSource: Statistics Estonia
Main Economic Indicators, 2012-2017
2012 2013 2014* 2015* 2016* 2017*
GDP real growth (%) 3.2 0.8 0.5 2.5 3.5 3.4
GDP (current prices, billion EUR)
17.0 18.4 19.0 20.1 21.4 22.8
Consumer price index (%) 3.9 2.8 0.3 1.9 2.5 3.0
Employment (15–74 years old, thousands)
624.4 621.4 622.1 622.1 620.9 628.4
Growth of labour productivity 0.7 -0.2 0.3 2.5 3.7 3.8
Unemployment rate (ILO) 10.2 8.6 6.8 6.4 6.4 6.1
Average wage (EUR) 887 948 1,005 1,066 1,134 1,208
Wage real growth (%) 1.7 4.9 5.7 4.1 3.8 3.4
* forecastSource: Ministry of Finance Summer 2014 forecast
Structure of FDI Inflow (EUR m)
Source: Bank of Estonia
Total stock: EUR 15,6 bln
Structure of FDI Outflow (EUR m)
Source: Bank of Estonia
Total stock: EUR 4.8 bln
FDI Inflow by Country and Activity Stock as of 31.12.2013
Sweden 26,7%
Finland 21,3%
Netherlands 10,2%
Norway 5,8%
Russia 5,3%
Lithuania 3,0%
Cypros 3,0%
UK 2,5%
Denmark 2,3%
USA 2,1%
Luxembourg 2,1%
Other 15,7%
Financial and insurance activities 25,0%
Real estate activities 16,0%
Wholesale and retail trade 15,3%
Manufacturing 14,3%
Professional, scientific, technical activities 8,4%
Transportation and storage 5,5%
Administrative and support service activities 3,2%
Agriculture, foresty and fishery 2,7%
Information and communication 2,1%
Other 7,5%
Source: Bank of Estonia
FDI Outflow by Country and Activity Stock as of 31.12.2013
Cyprus 28,4%
Lithuania 21,2%
Latvia 16,8%
Ukraine 5,4%
Russia 4,6%
Finland 4,1%
Netherlands 3,1%
Belarus 2,0%
Others 14,4%
Transportation and storage 27,4%
Professional, scientific, technical activities 20,3%
Financial and insurance activities 16,8%
Real estate activities 12,7%
Wholesale and retail trade 8,9%
Manufacturing 4,6%
Other 9,3%
Source: Bank of Estonia
Estonian Foreign Trade - Commodities (EUR bln)
0
2
4
6
8
10
12
14
16
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
4,7
6.2
7.7 88.5
6.5
8.8
12.1 12.5 12.3
6.7
8.2
10.711.4
10.9
7.6
9.2
12.613.8 13.7
Exports Imports
Source: Statistics Estonia
Commodities exports represent 67% of Estonia’s GDP
Sweden 16,8%
Finland 16,1%
Russia 11,4%
Latvia 10,4%
Lithuania 5,9%
Germany 4,5%
Norway 3,7%
USA 2,9%
UK 2,4%
Others 25,9%
Commodities Exports by Country and Commodity 2013
Source: Statistics Estonia
Machinery and appliances 28,1%
Mineral products 10,5%
Wood and articles of wood 8,6%
Base metals and articles of metals 7,2%
Miscellaneous manufactured products
7,1%
Transport equipment 6,6%
Chemical products 5,7%
Food products 4,2%
Live animals, animal products 3,8%
Textile products 3,4%
Other 14,8%
Finland 15,1%
Germany 10,5%
Sweden 10,1%
Latvia 9,6%
Lithuania 8,9%
Poland 8,0%
Russia 5,8%
UK 4,2%
China 3,4%
Netherlands 3,3%
Others 21,1%
Commodities Imports by Country and Commodity 2013
Source: Statistics Estonia
Machinery and appliances 27,7%
Mineral products 12,7%
Transport equipment 10,5%
Chemical products 7,8%
Base metals and articles of metals 7,5%
Food products 6,1%
Plastics and rubber 5,0%
Textiles and textile articles 4,3%
Wood and articles of wood 2,7%
Live animals, animal products 2,5%
Other 13,2%
Estonian Foreign Trade - Services (EUR bln)
0
1
2
3
4
5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
4.72.6
2.9
3.33.5 3.2
3.4
3.9
4.34.5
1.4
1.82
2.22.3
1.82.1
2.73
3.2
Exports Imports
Source: Bank of Estonia
Services exports represent 24% of Estonia’s GDP
Exports
Finland 24,8%
Russia 11,8%
Sweden 7,8%
Lithuania 7,1%
Latvia 6,9%
Germany 4,8%
UK 4,4%
USA 4,2%
Norway 3,3%
Switzerland 3,3%
Denmark 2,7%
Others 18,9%
Services Exports and Imports by Country 2013
Imports
Finland 14,8%
Sweden 8,9%
Latvia 8%
Germany 7,1%
UK 6,2%
Russia 4,6%
Lithuania 4,5%
France 4,2%
Poland 4,2%
Cyprus 4%
Norway 3,8%
Others 29,7%
Source: Bank of Estonia
Simple and Favourable Tax System * 0% Corporate income tax on reinvested profits
All distributions are subject to income tax at the rate of 21% of the amount of taxable payment
Personal income tax: flat rate 21%. The same rate applies for expats
VAT: 20%
Social tax: 33% (20% for social security and 13% for health insurance)
Unemployment insurance: 3% of the gross salary. (The employer pays 1% of the salary and the employee 2%.)
No property tax
The land tax is from 0,1% to 2,5% on the assessed value of the land, rate established by local government (i.e in Tallinn 2,5%).
Easy administration - All the taxes can be declared via E-
tax/e-customs (an electronic service desk of the Estonian
Tax and Customs Board)
Source: KPMG
29.6%
24.5%
23.0%
22.0%
19.0%
19.0%
19.0%
15.0%
15.0%
0.0% *
0.0% 10.0% 20.0% 30.0% 40.0%
Germany
Finland
UK
Sweden
Poland
Czech Rep
Hungary
Latvia
Lithuania
ESTONIA
Tax rate on corporate income, 2014
Information Society Indicators
100% of schools and government organizations are ICT equipped
Entire country is covered with a broadband connection
97% of businesses use computers
80% of homes have broadband connection
99,8% of bank transfers are performed electronically
95% of income tax declarations are made via the e-Tax Board
25% of votes were cast over the internet on 2013
66% of the population participated in the census via internet in 2012
More than 93% of the population has an ID-Card
Estonia is Part of the Nordic Electricity Market
Estonia is part of Nordic electricity market and Estonian electricity system is connected also with Russia and Latvia.
Estonian energy system is the only predominantly oil-shale-based energy production system in the world.
The biggest energy producer in Estonia is Eesti Energia, a 100% state-owned company.
The price of electricity consists of four components: electricity, network service, renewable energy support and excise duty.
Electricity market is 100% open starting January 2013.
Natural Gas Market
Natural gas is imported into Estonia from Russia and Latvia.
Estonian natural gas company is Eesti Gaas.
Network services to all participants of the natural gas market on the territory of Estonia are provided by EG Võrguteenus.
The price of gas consists of three elements: gas, network service and excise duty.
The price for industrial users is a matter of negotiations.
9 9.39.9 9.9 10.1
10.6 10.9
12.2 12.212.8
0
2
4
6
8
10
12
14 Gas price for industries, 2013 (EUR per GJ)
Source: Eurostat
Property Market Indicative range for rents (excluding VAT and operating expenses) in major towns
of Estonia for class A and B1 office premises and industrial space (EUR/m2 per month).
Type of space Tallinn Tartu Pärnu Narva
Office 8.0 – 16.0 4.8 – 11.5 4.0 – 8.0 3.1 – 5.5
Industrial 2.8 - 5.0 2.0 - 4.0 1.6 - 4.4 1.9 - 3.8
Source: Colliers International
Labour Market and Education System Total labour force: 680,000
The unemployment rate: 8,6% in 2013
General working time: 8 hours a day, 5 days per week. The duration of one shift may not exceed 12 hours
Overtime is allowed by mutual agreement
The duration of the annual vacation: 28 days
10 Public holidays a year
The average wages in Estonia in 2013 was EUR 948. The monthly minimum wage for full-time work is EUR 355.
7 universities (6 public, 1 private) - ca 49,400 students
University of Tartu – 15,800 students Tallinn University of Technology
– 12,900 students Tallinn University – 10,300 students Estonian University of Life Sciences –
4,300 students Estonian Academy of Arts – 1,130 students
22 other professional higher education institutions – ca 15,400 students
48 vocational schools - ca 26,200 students
214 gymnasiums (high schools) - ca 24,000 students
7 universities (6 public, 1 private) - ca 46,600 students
o University of Tartu – 15,800 studentso Tallinn University of Technology – 12,900
studentso Tallinn University – 10,300 studentso Estonian University of Life Sciences – 4,300
studentso Estonian Academy of Arts – 1,130 studentso Estonian Academy of Music and Threatre –
700 studentso Estonian Business School – 1,500 students
17 other professional higher education institutions – ca 12,500 students
47 vocational schools - ca 25,700 students
204 gymnasiums (high schools) - ca 22,500 students
Room for Growth: Number of Students and Graduates
Name of faculty
Name of the study programme
2011/2012
2012/2013
Social sciences, business & law
Social and behavioural sciences
3,746 3,487
Journalism 1,161 1,067
Business Administration
16,427 15,637
Law 3,448 3,124
Natural- and applied sciences
Bio science 1,497 1,460
Physcis 1,283 1,250
Math and statistics
383 353
Computer sciences
7,104 7,284
Name of faculty
Name of the study programme
2010/2011
2011/2012
Social sciences, business & law
Social and behavioural sciences
679 626
Journalism 234 210
Business Administration
3,870 2,284
Law 708 688
Natural- and applied sciences
Bio science 292 277
Physcis 220 249
Math and statistics
71 79
Computer sciences
957 1,029
Number of students Number of graduates
Source: Ministry of Education and ResearchWorld class talent: according to the World Economic Forum’s 2013-2014 Global Competitiveness Index, Estonia was ranked 24th in the world and the highest in CEE and Russia for the quality of its higher education.
Universities & vocational colleges: student base = 85,000
Key Sectors
ICT
Transport and logistics services
Shared services
Industrial machinery and metalworking
Electronics
ICT Estonia is the host country for NATO's Cooperative Cyber Defence Center of
Excellence and the EU IT Agency’s headquarter.
The computer security company McAfee ranks Estonia as having a reliable cyber security structure.
Estonia is second in the internet freedom in the world, according to Freedom House.
Estonia is the global pioneer in adopting electronic government and numerous ID-card based e-services.
The development center of Skype is located in Estonia. Besides that also companies like Symantec, CGI, Fujitsu and many others have their base in Estonia.
2,560 companies are active in the ICT sector, contributing 5% of total sales in business activities in Estonia. Over 19,500 employees – 3,1% of total employment in Estonia.
Transport and Logistics Services An impressive infrastructure – 5 key international ports, 4 free zones,
10 border posts to Russia, block trains to Moscow and Beijing, shortest EU flight time to China.
Estonia is the geographical midpoint of Northern Europe and therefore the best place to set up distribution centres and to generate added value.
Europe's most effective rail operator, Europe's most modern and up to date airport and the largest port at the Baltic Sea are all located in Estonia.
Estonia is ranked 7th out of 189 economies for the ease of Trading Across Borders.
Shared Services Sustainable, high-quality, competitive costs and low risk solutions for
BPO, IT and financial services shared service centres, customer and technical support centres.
Estonia is the regional market leader in IT shared services.
55% of the workforce are fluent in one or more foreign languages.
Top language skills: Russian, English, Finnish, German, Swedish.
Solid track record in shared services: Kuehne+Nagel, Statoil, TeliaSonera, AGA (Linde Group), Stora Enso, Transcom, Arvato (Bertelsmann).
Industrial Machinery and Metalworking Estonia offers a dynamic, internationally focused mechanical
engineering ecosystem, excellent accessibility, a sustainable, high-quality skills base and competitive, low-inflation costs.
1,370 companies are active in the machinery and metalworking sector, ca 20,400 direct employees.
EUR 1.8 billion revenues, of which 50% is generated from exports. 3 main branches:
o Metals and metal products – 57% of total revenues;o Transport equipment – 21% of total revenues. 88% of transport equipment
production is exported;o Machinery, tools & equipment – 18% of total revenues.
Examples of companies in Estonia: ABB, Hanza Tarkon, Metalliset Group, Ruukki.
Electronics Estonia offers distinctive opportunities as a near-shore electronics
hub for both in-house and outsourced production and distribution.
200 companies are active in electronics sector, ca 10,800 direct employees.
EUR 2.3 billion revenues, of which 91% is generated from exports.
2 main branches:
o Computer, Electronic & Optical Products – 76% of total revenues;o Electrical Equipment – 24% of total revenues.
Examples of companies in Estonia: Ericsson, Stoneridge Electronics, ABB, PKC Group.
Estonian Investment Agency
Our mission •to ensure a competitive business environment for foreign investments in Estonia•to establish and develop business relationships with international companies
We provide •Information services and investment preparation•Investment proposals and tours•Consulting and project management•Facilitating contacts, negotiation with authorities•Organizing recruitment and identifying suitable properties•Post-investment / aftercare services
Our representations:
•Tallinn, Estonia•Hamburg, Germany•Helsinki, Finland•Stockholm, Sweden•Silicon Valley, USA•Tokyo, Japan•Shanghai, China•Saint-Petersburg, Russia
Our representations:
•Tallinn, Estonia•Hamburg, Germany•Helsinki, Finland•Stockholm, Sweden•Silicon Valley, USA•Tokyo, Japan•Shanghai, China•Saint-Petersburg, Russia
EIA is a division within Enterprise EstoniaEIA is a division within Enterprise Estonia
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