Doing business

Estonia

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Sole proprietorship No minimum capital.	1 person. Liability is unlimited.
Private Limited Company Minimum EUR 2,557	No minimum Partners' liability is limited to the amount contributed.
Public Limited Company Minimum EUR 25,566	No minimum. Partners' liability is limited to the amount contributed.
General partnership. No minimum capital.	Minimum 2 partners. The partners are solitarily liable for the obligations of the partnership with all of their assets.
Limited partnership No minimum capital.	Minimum 2 partners. Limited Liability.

Business setup procedures

Setting up a company	Estonia	Eastern Europe & Central Asia
Procedures (number)	5.0	6.3
Time (days)	7.0	16.3

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Estonia.
Trade Register
The competent organization: Registration should take place at the Commercial Register.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	1,726	1,838	1,539
FDI stock (millions USD)	16,724.8	16,788.5	16,437.9
Performance Index*, ranking on 141 economies	37	22	-
Potential Index**, ranking on 141 economies	31	-	-
Number of Greenfield investments***	44	25	-
FDI inwards (in % of GFCF****)	25.0	22.4	-
FDI stock (in % of GDP)	71.1	85.1	-

Source:

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.

Why you should choose to invest 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 purchansing 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.

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.

Finding assistance for further information

Investment aid agency: Invest in Estonia
Other useful resources: Estonian Chamber of Commerce and Industry