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Estonian economy

Since regaining its independence, Estonia has been one of the fastest growing economies in the region. Quick reforms, westernisation of the economy, innovation and openness to foreign capital have attracted numerous international companies to Estonia – Ericsson, ABB, Kuehne + Nagel, Stora Enso, Symantec, Stoneridge, to name a few.

  • 1.3 M population
  • 45,339 sq km
  • 1st OECD tax competitiveness index
  • 1st Enterpreneurial activity

Economy overview

1stglobally in tax competitiveness

Since regaining its independence, Estonia has been one of the fastest growing economies in the region. Quick reforms, westernisation of the economy, innovation and openness to foreign capital have attracted numerous international companies to Estonia – Ericsson, ABB, Kuehne + Nagel, Stora Enso, Symantec, Stoneridge, to name a few. Skype is a good example of Estonian first class innovation – complete research and development done in Tallinn with the support of foreign capital.

Positions in various indices:

  • 1st – OECD Tax Competitiveness Index 2016
  • 1st – Entrepreneurial Activity, World Economic Forum 2017
  • 1st – Internet Freedom, Freedom House 2016 (sharing 1st place with Iceland)
  • 6th – Index of Economic Freedom 2017, The Heritage Foundation
  • 9th – Digital Economy and Society Index 2017, European Commission
  • 12th – Ease of Doing Business 2016, The World Bank

Estonia has some of the highest international credit ratings in the region:

  • Standard & Poor’s: AA-
  • Moody’s: A1
  • Fitch IBCA: A+

The Estonian Government demonstrates flexible and needs-based legislation with priority on facilitation of entrepreneurship. This has resulted in a simple, transparent and nimble business environment that is one of the key drivers of foreign direct investment in Estonia.

Structure of economy

14%of GDP - manufacturing

IT plays a central role in life in Estonia because people trust the IT solutions our companies create and are eager to use them to make everyday life easier. Our ambitious startup community dares to create innovative solutions that change the world including services as different as Mobile Parking and self-driven delivery robots. The common denominator for Estonian IT companies is their creativity and the ability to ignore the concept of impossible.

Estonia combines elements of both the old and new economy – while the success of the technology sector has made the startup scene blossom, the country is also moving up in the value chain in sectors such as forestry and oil shale.

10%of GDP - wholesale & retail

About 50% of the country is covered by forest and Estonia has become the largest exporter of wooden houses in Europe, building the tallest timber buildings in the world. In the oil shale sector, our talented engineers have mastered the energy extraction from oil shale and are now exporting the technology across the world.

Take a look at the business opportunities and what the key sectors have to offer in the Business opportunities section of our website.

Foreign direct investment

Estonia is among the leading countries in the Central and Eastern Europe regarding foreign direct investments per capita.

28%of FDI - financial

FDI by sectors (2016):
28% financial sector
18% real estate activities
14% manufacturing
13% wholesale and retail trade
8% professional, scientific and technical activities

Origin of FDI (2016):
26% Swedish companies
23% Finnish companies
10% Dutch companies
4% Lithuanian companies
4% Russian companies

Estonian economy

These websites can be useful when doing research on Estonian economy:

Doing business in Estonia

News & events

Need more information?

Need more information?

What is it like to run a business in Estonia? How to benefit from the e-solutions and the efficiency of our business culture? What are the opportunities in specific sectors?

The Business in Estonia section helps you prepare for doing business in Estonia. And if you have any further questions, our business advisers are happy to help.

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