Bureau of Economic and Business Affairs
July 5, 2016

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Executive SummaryShare    

Estonia is a safe and dynamic country in which to invest, with a business climate very similar to the United States. As a member of the EU, the Government of Estonia (GOE) maintains liberal policies in order to attract investments and export-oriented companies. Creating favorable conditions for foreign direct investment (FDI) and openness to foreign trade has been the foundation of Estonia's economic strategy. The overall freedom to conduct business in Estonia is well protected under a transparent regulatory environment.

  • Estonia is among the leading countries in Eastern and Central Europe regarding FDI per capita. At the end of 2015, Estonia had attracted in total USD 19.3 billion (stock) of investment, of which 27 percent was made into the financial sector, 16 percent into real estate, 15 percent into wholesale and retail trade, and 9 percent into professional, scientific and technical activities.
  • The Estonian income tax system, with its flat rate of 21 percent, is considered one of the simplest tax regimes in the world. Deferral of corporate taxation payment shifts the time of taxation from the moment of earning the profits to that of their distribution. Undistributed profits are not subject to income taxation, regardless of whether these are reinvested or merely retained.
  • Estonia offers key opportunities for businesses in a number of economic sectors like information and communication technology (ICT), chemicals, wood processing, and biotechnology. Estonia has strong trade ties with Finland, Sweden and Germany.
  • Starting December 1, 2014, Estonia offered foreigners the option of e-residency. E-residents are issued a digital identity (smart ID-card) from the Republic of Estonia for a small fee. This does not entail full legal residency, citizenship or right of entry to Estonia, but gives secure access to some of Estonia’s digital services such as business registration and an opportunity to use digital signatures in an electronic environment. Such digital identification and signing is the legal equivalent to face-to-face identification and handwritten signatures in the European Union. More info:
  • Estonia suffers a shortage of labor, both skilled and unskilled. The GOE has recently amended its immigration law to allow easier hiring of highly qualified foreign workers.

Table 1



Index or Rank

Website Address

TI Corruption Perceptions index


23 of 168

World Bank’s Doing Business Report “Ease of Doing Business”


16 of 189

Global Innovation Index


23 of 141

U.S. FDI in partner country ($M USD, stock positions)



World Bank GNI per capita




1. Openness To, and Restrictions Upon, Foreign InvestmentShare    

Attitude toward Foreign Direct Investment

Estonia is open for FDI and foreign investors are treated on an equal footing with local investors.

Other Investment Policy Reviews

The overview of the Estonian Investment Agency reviews can be found

Laws/Regulations on Foreign Direct Investment

Estonia's judiciary is independent and insulated from government influence. Estonia is part of the Continental European legal system (civil law system). The most important sources of law are legal instruments such as the Constitution, European Union law, international agreements and Acts and Regulations. Major laws affecting incoming foreign investment include: the Commercial Code, Taxation Act, Income Tax Act, Value Added Tax Act, Social Tax Act, Unemployment Insurance Payment Act. More information is available at An overview of the investment regulations can be found:

Business Registration

There are two ways of registering your business:

  • Electronic registration via the e-Commercial Register’s Company Registration Portal (takes from 5 minutes to 1 business day)
  • Through a notary (takes 2-3 business days)

Access to the Register:

Overview of the different type of legal business entities in Estonia can be found:

The Estonian Investment Agency (EIA), a part of Enterprise Estonia, is a government agency promoting foreign investments in Estonia and assisting international companies in finding business opportunities in Estonia. EIA offers comprehensive, one-stop investment consultancy services, free of charge. The agency’s goal is to increase awareness of business opportunities in Estonia and promote the image of Estonia as an attractive country for investments. More info:

Estonia’s government makes no special concessions to SMEs. At the same time small and medium-sized enterprises are very important for the Estonian economy, accounting for about 74 percent of value added and 78 percent of private sector employment.

Industrial Promotion

The Estonian government promotes investments into the ICT, shared services, electronics, mechanical engineering, logistics and wood industries. More info:

Limits on Foreign Control and Right to Private Ownership and Establishment

Estonia's government has not set limitations on foreign ownership. Licenses are required for foreign investors to enter the following sectors: mining, energy, gas and water supply, railroad and transport, waterways, ports, dams and other water-related structures and telecommunications and communication networks. The Estonian Financial Supervision Authority issues licenses for foreign interests seeking to invest in or establish a bank. Additionally, the Estonian Competition Authority reviews transactions for anti-competition concerns. Government review and licensing have proven to be routine and non-discriminatory.

Privatization Program

Estonia's privatization program is now complete. Only a small number of enterprises remain wholly state-owned. Examples include the country’s main port, national air carrier, power plants, the postal system, and the national lottery.

Screening of FDI

Estonia's government does not screen foreign investment. As a member of the EU, the Government of Estonia (GOE) maintains liberal policies in order to attract investment and export-oriented companies. Creating favorable conditions for FDI and openness to foreign trade has been the foundation of Estonia's economic strategy. Existing requirements are not intended to restrict foreign ownership but rather to regulate it and establish clear ownership responsibilities.

Competition Law

The Estonian Competition Authority reviews transactions for anti-competition concerns. Government review and licensing have proven to be routine and non-discriminatory.

More info:

2. Conversion and Transfer PoliciesShare    

Foreign Exchange

Estonia has been a member of the euro currency area since 2011. There are no restrictions on currency transfers or conversion.

Remittance Policies

There are no restrictions, limitations or delays involved in converting or transferring funds associated with an investment (including remittances of investment capital, earnings, loan repayments, or lease payments) into other currencies at market rates. There is no limit on dividend distributions as long as they correspond to a company's official earnings records. If a foreign company ceases to operate in Estonia, all its assets may be repatriated without restriction. These policies are long-standing; there is no indication that they will be altered in the future. Foreign exchange is readily available for any purpose.

According to the 2015 International Narcotics Control Strategy Report (INCSR) on Money Laundering and Financial Crimes Country Database, Estonia is not listed as a country of concern ( Estonia is a member of the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here:

3. Expropriation and CompensationShare    

Private property rights are observed in Estonia. The government has the right to expropriate for public interest related to policing the borders, public ports and airports, public streets and roads, supply to public water catchments, etc. Compensation is offered based on market value. Cases of expropriation are extremely rare in Estonia, and the Embassy is not aware of any expropriation cases involving discrimination against foreign owners.

4. Dispute SettlementShare    

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

Estonia’s commercial law has proven extremely effective and is often cited as one of the most successful components of Estonia’s economic reforms. The Commercial Code, the central part of the overall commercial law system, is consistently applied. The Law of Obligation Act, enacted in 2002, is the basis for all commercial agreements. A Bankruptcy Act was adopted in 2004. The full text of these laws can be found at

The legal system in Estonia is based on the Continental European civil law model and has been influenced by the German legal system. In contrast to common law countries, Estonia has detailed codifications.

Estonian law is divided into private and public law. Generally private law consists of civil law and commercial law. Public law consists of international law, constitutional law, administrative law, criminal law, financial law and procedural law.

Estonian arbitral tribunals can decide in cases of civil matters that have not previously been settled in court. Arbitration is usually employed because it is less time consuming and cheaper than court settlements. The following disputes can be settled in arbitral tribunals:

  • Labor disputes;
  • Lease disputes;
  • Consumer complaints arguments;
  • Insurance conflicts;
  • Public procurement disputes;
  • Commercial and industrial disputes.


The Bankruptcy Act was adopted in 2004. The full text of these laws can be found at

More info on bankruptcy procedures:

EBRD assessment on insolvency legal framework in Estonia:

Investment Disputes

Investment disputes concerning U.S. or other foreign investors in Estonia are rare.

International Arbitration

The Arbitration Court of the Estonian Chamber of Commerce and Industry is a permanent arbitration court which settles disputes arising from contractual and other civil law relationships, including foreign trade and other international economic relations. More info:

Recognition of court rulings of EU Member States is regulated by EU legislation. More:

The Embassy is not aware of any claims under Estonia’s Bilateral Investment Treaty (BIT) with the United States.

ICSID Convention and New York Convention

Estonia has been a member of the International Center for the Settlement of Investment Disputes (ICSID) since 1992 and a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards since 1993, meaning local courts are obliged to enforce international arbitration awards that meet certain criteria

Duration of Dispute Resolution – Local Courts

It takes approximately 425 days to obtain a resolution on an investment/commercial dispute in Estonian courts system.


Estonia's judiciary is independent and insulated from government influence; however, some business leaders complain the courts are overburdened and too slow. Property rights and contracts are enforced by the courts.

5. Performance Requirements and Investment IncentivesShare    


Estonia has been a member of WTO since 1999.

Estonia treats all FDI on the same footing as local investments and has no Trade-Related Investment Measures (TRIMS).

Investment Incentives

A fundamental principle of Estonia’s economic policy is equal treatment of foreign and domestic capital. No special investment incentives are available to foreign investors, nor is any favored treatment accorded them.

Estonia has a long-standing system of low, simple, flat-rate taxes, including a flat 21 percent income tax. To encourage companies to expand their operations in Estonia, all reinvested profits are exempted from corporate income tax. However, any distributed profits, such as dividends, are taxed at 21 percent. This tax strategy was designed to promote business and accelerate economic growth by making additional funds available for investment.

Generally, the government does not impose “offset” requirements on major procurements.

Research and Development

Foreign entities registered in Estonia have the same access to government financed research and development programs as the local companies. More on R&D here:

Performance Requirements

There are no specific performance requirements for foreign investments that differ from those required of domestic investments. Estonia continues to refine its immigration policies and practices. Amendments which entered into force on January 1st 2016 make it easier for employers to bring in highly qualified workforce from abroad. This simpler process is intended to motivate more foreign specialists to move to Estonia with their families. More info on working in Estonia:

U.S. citizens are exempt from the quota regulating the number of immigration and residence permits issued, as are citizens of the EU and Switzerland.

Data Storage

There are no requirements for foreign IT service providers to turn over source code and/or provide access to surveillance (e.g., backdoors into hardware and software or turning over keys for encryption) or to maintain a certain amount of data storage in Estonia. There is no general requirement to register data processing activities in Estonia. Registration is required only if the data processor handles sensitive personal data.

Estonian Data Protection Inspectorate
19 Väike Ameerika St., 10129 Tallinn, Estonia
Telephone (+372) 627 4135

Estonia has implemented the EU Data Protection Directive 95/46 EC through the Estonian Personal Data Protection Act 2007 (EPDPA). The EPDPA applies to both the public and private sector but is not applicable where personal data is processed by natural persons for personal purposes or where personal data is transmitted through Estonian territory without any other processing of the data in Estonia.

Restrictions on transfer of data offshore:

Transfer of personal data from Estonia is permitted only to a country which has a sufficient level of data protection. Members of the EEA and White Listed countries are deemed to provide a sufficient level of data protection. Data can therefore be transferred within these areas without restriction. More info:

Personal data may also be transferred to US data importers with EU/US Safe Harbor certificates. This does not require the authorization of the Estonian Data Protection Inspectorate.

Data can be exported to a third country outside the EEA, the White Listed countries and organizations with US Safe Harbor certification if: the data subject explicitly consents to the transfer or the Estonian Data Protection Inspectorate authorizes the transfer.

6. Protection of Property RightsShare    

Real Property

Secured interests in property are recognized and enforced. Mortgages are quite common for both residential and commercial property and leasing as a means of financing is widespread and efficient.

The legal system protects and facilitates acquisition and disposition of all property rights, including land, buildings, and mortgages. As of 1 October 2011, land reform in Estonia was almost complete. Restitution and privatization of lands commenced in 1991, but in almost every municipality there remain several complicated cases to be settled. In total, about 10percent of the Estonian territory (waterbodies included) remains to be reformed.

Foreign individuals and companies are allowed to acquire real estate with the permission of the local authorities. There are legal restrictions on acquiring agricultural and woodland of 10 hectares or more, and permission from the county governor is needed. Foreign individuals are not allowed to acquire land located on smaller islands, or listed territories adjacent to the Russian border.

More info:

Intellectual Property Rights

Companies should recognize that IP is protected differently in Estonia than in the U.S., and U.S. trademark and patent registrations will not protect IP in Estonia. Registration of patents and trademarks is on a first-in-time, first-in-right basis, so companies should consider applying for trademark and patent protection even before selling products or services in the Estonian market. It is vital that companies understand that intellectual property is primarily a private right and that the U.S. government generally cannot enforce rights for private individuals in Estonia. It is the responsibility of the rights' holders to register, protect, and enforce their rights where relevant, retaining their own counsel and advisors. Companies may wish to seek advice from local attorneys or IP consultants who are experts in Estonian law.

Estonia maintains a robust IPR regime. The quality of IP protection in legal structures is strong, enforcement is good and infringements and theft are uncommon. Estonia is not listed in USTR’s Special 301 report or in the Notorious Market report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at

IP rights, except for copyright, must be registered and enforced in Estonia under local laws. Estonia adheres to the Berne Convention, WIPO and TRIPS, the Rome Convention, and the Geneva Convention on the Protection of the Rights of Producers. Estonian legislation fully complies with EU directives granting protection to authors, performing artists, record producers, and broadcasting organizations. Equal protection against unauthorized use is provided via international conventions and treaties to foreign and Estonian authors. Since July 2015 Estonia is a member of Global Patent Prosecution Highway. The level of IP enforcement has not changed in the past year.

Estonian Customs tracks and reports periodically on seizures of counterfeit goods. In 2015, the Estonian Tax and Customs Board seized 22,989 items of counterfeit goods. 95 percent of infringement cases were detected during customs procedures implemented on postal and courier services. The largest trademark infringed commodity groups were watches, followed by footwear, clothing, handbags and wallets. One of the notable cases in 2015 included 3060 infringed bulbs for car lights. Counterfeit goods are not prevalent in the local market.

Estonia has been undertaking significant structural IPR reform which involves re-codification of all IPR laws. The draft language of the new Copyright and Related Rights Acts and the Industrial Property Act has been completed, but the law’s approval process has been put on hold to incorporate expected upcoming major changes from new EU directives. The last amendment to the existing Copyright Law was adopted in March 2016 on collective rights management and multi-territorial licensing of rights in musical works for online users –transposition of the EU Directive 2014/26/EU. Adhering to all international treaties and EU directives, the new laws will improve protection of IP rights in Estonia.

Amendments to the penal code to adopt proportionality and avoid over-criminalization for minor IP offenses, entered into force in January 2015.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO`s country profiles at

Resources for Rights Holders

Contact at Mission:

Nicole Johnson
Economic/Commercial Officer
+372 6688107

General reference list of attorneys is available on the embassy website at

American Chamber of Commerce in Estonia
Tallinn Business Center - Harju 6 10130 Tallinn Estonia
Phone: +372 6-310-522

7. Transparency of the Regulatory SystemShare    

The Government of Estonia has set transparent policies and effective laws to foster competition and establish "clear rules of the game." However, due to the small size of Estonia's commercial community, instances of favoritism are not uncommon despite regulations and procedures designed to limit these practices.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms. Financial statements should be prepared in accordance with either:

  • accounting principles generally accepted in Estonia; or
  • International Financial Reporting Standards (IFRS) as adopted by the EU.

Listed companies and financial institutions are required to prepare financial statements in accordance with IFRS as adopted by the EU.

The Estonian Generally Accepted Accounting Principles (GAAP) are written by the Estonian Accounting Standards Board (EASB). Estonian GAAP, effective since 2013, is based on IFRS for Small and Medium-sized Entities (IFRS for SMEs) with limited differences from IFRS for SMEs with regard to accounting policies as well as disclosure requirements. More info:

All proposed laws and regulations are published for public comment on the website Also, the public can comment on draft laws and propose changes to government regulations at

Estonia’s widely-praised "e-governance" solutions and other bureaucratic procedures are generally far more streamlined and transparent than those of other countries in the region and are among the easiest to use globally.

International institutions and organizations give Estonia’s economic policies high marks. The U.S.-based Wall Street Journal/Heritage Foundation’s 2016 Index of Economic Freedom ranked Estonia 9th in the world. The index is a composite of scores in monetary policy, banking and finance, black markets, wages and prices. Estonia scores highly on this scale for investment freedom, fiscal freedom, financial freedom, property rights, business freedom, and monetary freedom. More:

8. Efficient Capital Markets and Portfolio InvestmentShare    

Estonia's financial sector is modern and efficient. Credit is allocated on market terms and foreign investors are able to obtain credit on the local market. The private sector has access to an expanding range of credit instruments similar in variety to those offered by banks in Estonia's Nordic neighbors Finland and Sweden.

Legal, regulatory, and accounting systems are transparent and consistent with international norms.

The Security Market Law complies with EU requirements and enables EU securities brokerage firms to deal in the market without establishing a local subsidiary. The NASDAQ OMX stock exchanges in Tallinn, Riga and Vilnius form the Baltic Market, which facilitates cross-border trading and attracting more investments to the region. This includes sharing the same trading system and harmonizing rules and market practices, all with the aim of reducing the costs of cross-border trading in the Baltic region.

The Estonian capital markets are rather inactive as both stock and bond market liquidity have been in a downward trend for the past ten years.

Estonian financial services market overview:

Money and Banking System, Hostile Takeovers

Estonia's banking system has consolidated rapidly. Total assets of the commercial banks were approximately EUR 22.7 billion in early 2016. The banking sector is dominated by two major commercial banks, Swedbank and SEB, owned by Swedish banking groups. These two banks control approximately 62 percent of the financial services market. The third largest bank is an affiliate of the Finnish Nordea group and the fourth largest bank is an affiliate of the Danish Danske Bank. There are no state-owned commercial banks or other credit institutions. More information is available at:

The Scandinavian-owned Estonian banking system is modern and efficient, encompassing the strongest and best-regulated banks in the region. These provide both domestic and international services (including internet and mobile banking) at very competitive rates. Both local and international firms provide a full range of financial, insurance, accounting, and legal services. Estonia has a highly advanced internet banking system: currently 98 percent of banking transactions are conducted via the internet.

The Central Bank and the government hold no shares in the banking sector.

Opening a bank account for investors:

Takeovers in Estonia are regulated by the EU Takeover Directive 2004/25/EC.

9. Competition from State-Owned EnterprisesShare    

In Estonia SOEs are primarily engaged in the provision of services of strategic importance.

In 2015, the Republic of Estonia held an interest in 32 companies of which 25 were solely owned by the state. The full list of SOEs is available at: Public enterprises operate on the same legal basis as private enterprises, without any advantages.

Aggregated data on SOEs in Estonia can be found at:

Competition and public procurement of SOEs is subject to EU law. All SOEs are subject to external audits. The audits are overseen by the Estonian state.

Estonia is covered by the Agreement on Government Procurement (GPA). More:

OECD Guidelines on Corporate Governance of SOEs

SOE Management in Estonia report to independent supervisory boards consisting of government officials, politically-affiliated individuals and also prominent members of the business community.

The OECD has a positive overall view of Estonia’s corporate governance framework in relation to the core corporate governance features and to the recommendations in both the OECD Corporate Governance Principles and OECD Guidelines for State-owned Enterprises. More info:

Sovereign Wealth Funds

There are no sovereign wealth funds in Estonia.

10. Responsible Business Conduct (RBC)Share    

The majority of OECD Guidelines for Multinational Enterprises are incorporated into Estonian legislation. The non-profit organization, Responsible Business Forum in Estonia, aims to further CSR in Estonia, and is a partner in the CSR360 Global Partner Network. CSR360 ( is a network of independent organizations, which work as the interface of business and society to mobilize business for good. More info on CSR in Estonia:

The Estonian Ministry of Economy and Communication works closely with CSR on educating private businesses and SOEs on responsible business conduct, recognizing best practices, and factoring RBC policies or practices into its procurement decisions.

The American Chamber of Commerce in Estonia also maintains a Corporate Social Responsibility committee.

Government in general enforces the labor, human rights, employment rights, consumer protection, and environmental protection related laws effectively and these requirements cannot be waived to attract foreign investment.

Estonia has adhered to the OECD Guidelines for Multinational Enterprises since 2001. The National Contact Point can be accessed here:

Natural resource extraction related revenues, including mining licenses, are less than 0.6 percent of government budget revenues and less than 0.3percent of the GDP. The revenues are reflected in the national budget.

Here you can find a summary of the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain:

11. Political ViolenceShare    

Civil unrest generally is not a problem in Estonia, and there have been no incidents of terrorism. Large public gatherings and demonstrations may occur on occasion in response to political issues, but these have proceeded, with few exceptions, without incident in the past.

12. CorruptionShare    

Estonia has laws, regulations, and penalties to combat corruption and while corruption is not unknown, it has generally not been a major problem faced by foreign investors. Both offering and taking bribes are criminal offenses which can bring imprisonment of up to five years. While “payments” that exceed the services rendered are not unknown, and “conflict of interest” is not a well-understood issue, surveys of American and other non-Estonian businesses have shown the issue of corruption is not a serious concern.

In 2015, Transparency International (TI) ranked Estonia 23th out of 168 countries on its Corruption Perceptions Index.

Anti-corruption policy and implementation are coordinated by the Ministry of Justice and the strategy is implemented by all ministries and local governments.

The Security Police Board is capable to deal with corruption offences and criminal misconduct, leading to the conviction of several high-ranking state officials.

Estonia co-operates in fighting corruption at the international level and is a member of GRECO (Group of States Against Corruption). Estonia is a party to both the Council of Europe (CoE) Criminal Law Convention on Corruption and the Civil Law Convention. The Criminal Law Convention requires criminalization of a wide range of national and transnational conduct, including bribery, money-laundering, and accounting offenses. It also incorporates provisions on liability of legal persons and witness protection. The Civil Law Convention includes provisions on compensation for damage relating to corrupt acts, whistleblower protection, and validity of contracts, inter alia.

More info on the corruption level in different sectors in Estonia can be found at:

UN Anticorruption Convention, OECD Convention on Combatting Bribery

The UN Anticorruption Convention entered into force in Estonia in 2010. Estonia has been a full participant in the OECD Working Group on Bribery in International Business since 2004; the underlying Convention entered into force in Estonia in 2005. The Convention obligates Parties to criminalize bribery of foreign public officials in the conduct of international business. The United States meets its international obligations under the OECD Anti-bribery Convention through the U.S. Foreign Corrupt Practices Act.

Resources to Report Corruption

Government agency contacts responsible for combating corruption:

+372 6121500 Security Police corruption hotline or
+372 6123657 Central Criminal Police corruption hotline
Or e-mail:
Transparency International in Estonia:

13. Bilateral Investment AgreementsShare    

Bilateral Taxation Treaties

Estonia has investment promotion and protection agreements with the Belgium-Luxembourg Economic Union, Azerbaijan, China, Czech Republic, Denmark, Finland, Greece, Israel, Italy, Jordan, Latvia, Lithuania, Moldova, Montenegro, Netherlands, Norway, Poland, Spain, Sweden, Switzerland, Turkey, Ukraine, UK and the United States, etc. More info:

More info on bilateral agreements with US:

Bilateral Taxation Treaties

A Bilateral Taxation Treaty with the U.S. came into force on January 1, 2000. The U.S. and Estonia signed a Foreign Account Tax Compliance Act (FATCA) agreement in April 2014.

14. OPIC and Other Investment Insurance ProgramsShare    

Estonia has a bilateral agreement with OPIC.

15. LaborShare    

Estonia has a small population - 1.31 million people. The average monthly Estonian salary at the end of 2015 was about USD 1,300 and is expected to increase in the coming two years by 5 percent annually. At the end of 2015, the unemployment rate was 6.4percent. Unemployment is forecast to remain below 6-7 percent in coming years. Due to the relatively low level of unemployment, employers report difficulty finding workers in a number of sectors. More on the labor market:

The Law of Obligations Act, the Individual Labor Dispute Resolution Act and the Occupational Health and Safety Act deal with employment and labor issues. Labor laws may not be waived in order to attract or retain investment. Labor laws are quite strict and the principle of protection of employees as the economically weaker party is applied. Upon termination of an employment contract due to a lay-off, an employer must pay an employee compensation in the amount of one month’s average wage. In addition, an insurance benefit shall be paid to an employee by the Estonian Unemployment Insurance Fund depending on the length of service. More info:

Termination of the employment contract:

Trade union membership remains low compared to most countries in the EU. Estonia has ratified all eight ILO Core Conventions.

With an aging population and a negative birth rate, Estonia, like many other countries of Central and Eastern Europe, faces demographic challenges affecting its long term supply of labor. Improving labor efficiency is a key focus for Estonia in the short-to-mid-term.

Legal amendments which entered into force on January 1st 2016 make it easier for employers to bring in highly qualified workforce from abroad. This simpler process is intended to motivate more foreign specialists to move to Estonia with their families. More info on working in Estonia:

Information on the free movement of labor within the EU is available at:

Estonian labor regulations on labor abuses, health and safety standards, labor disputes etc. are effectively monitored by the Estonian Labor Inspectorate:

16. Foreign Trade Zones/Free Ports/Trade FacilitationShare    

Estonia's Customs Act permits the government to establish free trade zones. Goods in a free trade zone are considered to be outside the customs territory. VAT, excise, import and export duties (as well as possible fees for customs services) do not have to be paid on goods brought into free trade zones for later re-export.

In Estonia, there are four free trade zones: Muuga port (near Tallinn), Sillamae port (northeast Estonia), Paldiski north port (northwest Estonia) and in Valga (southern Estonia). All free trade zones are open for FDI on the same terms as Estonian investments.

The main supervisory authority responsible for monitoring the movement of goods in or out of free trade zones is the Estonian Tax and Customs Board (governed by the Ministry of Finance). There are ID requirements for companies and individuals using the zone. The U.S. Department of Homeland Security (Coast Guard) has inspected Estonia’s ports and determined that the Republic of Estonia has substantially implemented the International Ship and Port Facility Security (ISPS) Code at all facilities visited.

17. Foreign Direct Investment and Foreign Portfolio Investment StatisticsShare    

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy


Host Country Statistical source*

USG or international statistical source

USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other


Economic Data







Host Country Gross Domestic Product (GDP) ($M USD)






Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other


U.S. FDI in partner country ($M USD, stock positions)





Host country’s FDI in the United States ($M USD, stock positions)





Total inbound stock of FDI as percent host GDP






Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data

From Top Five Sources/To Top Five Destinations (US Dollars, Millions)

Inward Direct Investment

Outward Direct Investment

Total Inward



Total Outward

































"0" reflects amounts rounded to +/- USD 500,000.

Source: Data is consistent with the Bank of Estonia data (data is in euros):

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets

Top Five Partners (Millions, US Dollars)


Equity Securities

Total Debt Securities

All Countries



All Countries



All Countries













































International Organizations



Source: IMF Coordinated Portfolio Investment Survey

18. Contact for More InformationShare    

United States Embassy, Political/Economic Section
Kentmanni 20, 15099 Tallinn, Estonia
Tel: 372 668 8130
Contact: Ms. Reene Sepp, Economic/Commercial Specialist