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In this page: FDI in Figures | Why You Should Choose to Invest in Estonia | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

In a manner similar to other small-scale open economies, Estonia needs a constant flow of foreign investments in order to maintain the expansion of its economy. Foreign investment has progressively developed in Estonia during the last ten years, led by the favorable market economy and a regular growth. Estonia possesses a large potential to attract FDI and it is one of the leader countries in Central and Eastern Europe in terms of investment inflows per capita.

Among the so-called Eastern European countries, Estonia is the most open to FDI. In 2013 FDI, mainly from Sweden (over 28% of total) and Finland (over 23%) represented over 80% of GDP. This importance of foreign investment, facilitated by the country's very pro-business attitude of the legislative framework and, more broadly, of Estonian society, is the expression of the country's the perfect integration into a northern circuit of production, in which the Estonian subsidiaries often function as outsourcing sites for Scandinavian parent companies.

The country is highly developed in the FDI-attractive fields of IT, bio technologies and green industries. It is an attractive location for investment in the Baltic region (one of the fastest growing European markets in recent years), with a strong economy. A balanced budget (constitutionally protected), a free trade regime, fully convertible currency, a competitive banking sector and an investment-favorable environment have all contributed to the success of the country. In 2013 the FDI influx totalled over USD 1.470 billion.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).


Country Comparison For the Protection of Investors

  Estonia Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 8.0 7.0 7.0 5.0
Index of Manager’s Responsibility** 3.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 5.7 5.9 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 3401,517950
FDI Stock (million USD) 16,96119,35121,451
Performance Index*, Ranking on 181 Economies 51--
Potential Index**, Ranking on 177 Economies 75--
Number of Greenfield Investments*** 293117
FDI Inwards (in % of GFCF****) 6.426.915.4
FDI Stock (in % of GDP) 75.286.587.6

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Estonia

Strong Points
The country's main strong points are:
- A sound and liberal economic policy;
- A highly trained and flexible labor force;
- A geographical location at a crossroads between Europe and Russian;
- Its European Union membership, .
Weak Points
The country's main weaknesses are:
- A small domestic market;
- The dominance of Finnish and Swedish products;
- A purchasing power well below that shown in the other countries in the region.
Government Measures to Motivate or Restrict FDI
In terms of investment, trade, government intervention and property rights, Estonia developed policies that are amongst the most liberal in Europe. The company taxation rate is relatively low compared to other Nordic countries, a fact which is one of the country's strong points. In order to encourage companies and attract foreign direct investment, all reinvested corporate profits are exempt from income tax.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Freedom of establishment is guaranteed.
Acquisition of Holdings
A majority holding interest in the capital of a local company is legal in Estonia. However, it is possible to get information directly from the Estonian Agency of Investment which is the unique body with the aim of informing foreign investors.
Obligation to Declare
Estonia does not apply any restrictions or limitations on foreign investment. However, certain activities (mainly those linked to medicine and safety) remain subject to an "activity license".
Competent Organization For the Declaration
Estonian Investment Agency
Requests For Specific Authorizations
Estonia has no exchange controls or restrictions on foreign investment. The amount of foreign capital invested in Estonian business enterprise is unlimited and companies can be in full foreign ownership. Foreign companies enjoy equal rights with local ones. A license should be obtained for activities in the following areas: mining, public utilities, reconstruction of railways, airports, ports and dams, long distance telecommunications, retail sales of pharmaceuticals, production of alcohol and tobacco, gambling, banking. The basic rules for licensing are included in the Regulation of the Estonian Government from May 8, 1990 on Issuing Statutory Activity Licenses.

Learn more about Foreign Investment in Estonia on, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Invest in Estonia
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Estonia
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Estonia
DgMarket, Tenders Worldwide
Other Useful Resources
Estonian Chamber of Commerce and Industry

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Learn more about Investing in Estonia on, the Directory for International Trade Service Providers.

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Last Updates: January 2015