Estonia is a startup nation. According to the recent report ‘The State of European Tech 2020’ by Atomico, Estonia has most startups per capita in Europe.
On a population-adjusted basis, Estonia is the clear European capital of startups; adjusted for its population of just 1.3M, Estonia has 4.6 times as many startups per capita as the European average. Estonia’s efforts to build a startup-friendly environment have been well documented and they appear to be delivering; Pipedrive’s recent investment from Vista Equity Partners at a $1.5B valuation means that Estonia has now played a major role in the building of five European $1B+ companies.
One in every four startup employees comes to Estonia from abroad
Technology news portal Geenius, writes that roughly one in every four startup employees in Estonia is from abroad, quoting Startup Estonia, the organisation that connects and supports Estonian startups. A total of €12 million in labour taxes was paid into the state treasury for these employees in the first three quarters of this year.
In the first three quarters of 2020, 547 Estonian visas and temporary residence permits were granted through the Startup Visa programme for recruitment and founding of startups. The countries from which Estonian startups recruited most numerous employees were Russia, Ukraine and Brazil. Foreign startup founders have come to Estonia mostly from India, Iran and Russia.
“Startup visas are used to bring to Estonia employees with particular skills that startups haven’t been able to find on the local labour market for some reason,” Eve Peeterson, the head of Startup Estonia explained.
She said that this is confirmed not just by the figures but also by the startups founders themselves: “The education level of employees who come to Estonia on a startup visa is higher than the average in the startup sector.”
Compared to the second quarter of last year, when the global coronavirus crisis clearly affected the recruitment plans of many startups, the situation normalised somewhat in the third quarter. A total of 108 startup visas for working in startups were granted in the first quarter of 2020, 55 in the second and 92 in the third.
Today, 27% of the employees of Estonian startups are from abroad, mainly contributing to international business development and the creation of technology, but also to the global sales and marketing of Estonian products and services.
Growing influence of foreign employees and founders
Most of startup founders have come to Estonia from India, Iran and Russia. Since the launch of the programme in 2017, a total of 239 or more than 20% of all startups in the Estonian Startup Database have been founded with the help of the programme.
Startups founded by foreigners in Estonia employ 264 people and achieved a total turnover of €19.3 million in the first three quarters of 2019, which is an increase of 65% compared to the year before. The startups with the biggest turnover were Pridegamesstudio (€5.4M), Mobinner (€2.1M) and SaleMove (€2M).
The Startup Visa programme provides non-EU citizens with the opportunity to work for Estonian startups and to relocate existing startups to or found new startups in Estonia.
In order to access the benefits that come with the visa, the company which applies for it must be assessed by the startup committee assembled by the Ministry of the Interior as corresponding to the legal definition of a startup.
Startup Estonia connects and supports Estonian startups. It is a governmental programme which aims to develop the Estonian startup ecosystem by promoting the creation of startups and international success stories. The programme is implemented by KredEx.
Read the original article on Geenius here (in Estonian).
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