In a fast-changing world economy, investors and entrepreneurs are always seeking new lands of opportunities for their business adventures. I wanted to take a look at Estonia if it is such a place.
Indrek Pällo, who is currently Head of the Estonian Investment Agency, kindly gave answers to my questions on investment and business opportunities in Estonia. In this short interview via email, we also discussed about e-Residency which many of you might find interesting.
We are familiar to what type of works investment and trade promotion agencies do. However, as every country is unique in their way, I assume that their focus might be different. Estonia is a pretty small market when comparing other European countries. In some ways, this is not an attraction point mostly for international trade people as they might prefer a bigger domestic market, for instance, if they will establish a branch there. So, I wonder what you emphasize on when you promote Estonia to investors and business people. In other words, what kind of business opportunities we can expect to find in Estonia?
Estonia is a member state of EU since 2004 and therefore our domestic market is around 500 million people. As we know EU common market allows goods and services to be freely traded. Neither foreign investors nor local companies in Estonia consider only Estonia as their home market, they always consider EU common market and other export markets in their business plans when setting up.
Estonia is very welcoming and open towards foreign direct investment. As a result, approx. 2/3 of Estonia’s GDP is generated by businesses having some sort of foreign investor involved. We also treat foreign and local companies equally and do not prefer one over another, but offer equally lucrative business environment for all.
Foreign investors have pointed out 3 key strengths of Estonia:
very transparent, easy and efficient business climate and regulation. We work hard to further improve the already efficient business environment. In Estonia we don’t punish success by taxing it heavily, but rather incentivize growth by allowing companies to reinvest and tax the reinvested profits with 0%.
secondly, Estonia has multilingual and well-educated labour pool, which is hard working and always seeking solutions to business issues as well as technical challenges.
thirdly, we have the most advanced digital infrastructure and e-governance solutions, which enable people to manage their businesses hassle free and online irrespective of their location. One can sign contracts digitally, conduct e-banking or declare taxes anywhere in the world where there is Internet connection. Now this is also available to foreign citizens via e-Residency.
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