The Estonian legal environment favours entrepreneurship and an entrepreneurial mindset. Foreign investors have equal rights and obligations with local entrepreneurs. All foreign investors may establish a company and conduct business in Estonia in the same way as local investors – no restrictions apply.
Startup Estonia together with nine Estonian law firms has created a set of model legal documents to simplify the startup journey from scratch, so startups and investors could focus on the company and deal-specific matters. These documents are made freely available in the hope that they will help to educate the Estonian start-up community, speed up the foundation, early-stage investment process, and lower legal costs.
Estonia has concluded bilateral treaties for the protection of investments with countries worldwide, including the USA, Germany, France, Finland, Sweden, Norway, and Switzerland.
Also, agreements for avoiding double taxation have been signed with more than 60 countries.
The legal system in Estonia is based on the Continental European civil law model and has been influenced by the German legal system. Unlike in common law countries, Estonia has detailed modifications, and issues are solved according to those. Estonian law is basically 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.
Nowadays, life is fast and justice procedures – the cornerstones of democracy – should be just as prompt. Over the past 15 years, Estonia has put a lot of effort into making justice systems digital. Thanks to fully automated court processes and electronic communication tools, the so-called e-Justice solutions, Estonia has one of the most effective court systems in the world.
Estonia has a three-level court system. County, city courts, and administrative courts adjudicate matters in first instance. The majority of courts of first instance are situated in county centers. The courts of second instance hear the appeals against decisions of courts of first instance. Courts of appeal are courts of second instance (sometimes also called circuit courts). The courts of appeal are situated in Tartu and Tallinn. The Supreme Court, situated in Tartu, is the court of the highest instance.
A statement of claim is filed with the court of first instance, an appeal with the court of second instance, and an appeal in cassation with the court of third or the highest instance. A matter shall be heard in the Supreme Court only after all previous court instances have been passed. The filing of an appeal is governed by respective codes of court procedure.
Here are some useful links regarding the Estonian legal system:
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The Estonian Investment Agency’s team is happy to help you via its complimentary e-Consulting service, organize online or offline follow-up events such as virtual investment visits and guide you through the fairly simple process of investing in Estonia.