After a few turbulent years, Estonia is ready to gear up for an economic comeback. In a huge move to boost its FDI competitiveness, Estonia has announced a new €160M support measure aimed at attracting large-scale investments over the next four years. The initiative, spearheaded by Minister of Economic Affairs and Industry Erkki Keldo, was approved by the government during recent budget discussions and is set to commence in 2026.
The scheme targets investments of at least €100 million, with a focus on export-oriented projects that create high-paying jobs. “We need to step up our efforts to attract high value-added jobs to Estonia and increase exports,” Keldo stated. He emphasised that the decision marks a very good start in fostering a smarter economy and better-paid positions for Estonian workers.
Under the plan, the government anticipates supporting approximately two projects annually, with an average investment of €200M per project. The initiative is expected to generate at least €80M in tax revenue for each supported venture, effectively recouping 40% of the investment.
To qualify, projects must create at least 30 direct and 70 indirect jobs, all offering salaries at or above the sector average. This requirement aligns with Estonia’s ambition to elevate its workforce and enhance overall economic productivity.
The timing of this measure is crucial, as Keldo noted that Estonia has been in fierce international competition for strategic business investments. “We need a new and more robust support scheme that would make companies decide to come to Estonia with their knowledge and jobs,” he explained.
Importantly, the support measure is designed to be fiscally neutral, with the costs offset by projected increases in budget revenues. The funds will be allocated to a special-purpose government reserve, to be utilized based on actual investment needs.
Beyond direct financial support, Keldo revealed that additional measures are being developed to enhance Estonia’s value proposition for large investments. These include streamlining planning and permit processes, ensuring access to renewable energy, addressing workforce needs, and improving capital availability.
Enterprise Estonia will oversee the support measure, which is slated to run from 2025 to 2028, focusing on export-oriented enterprises. The agency has brought in over €600M in FDI during 2022-2023, including several €100M+ enterprises, such as a Neo Performance magnet plant set to open in Narva, East Estonia.
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