Presentation on theme: "WHAT CAN ESTONIA SOLVE FOR YOU?"— Presentation transcript:
1WHAT CAN ESTONIA SOLVE FOR YOU? KRISTI TIIVASEstonian Investment Agency» investinestonia.com
2A few words of introduction Area45,227 km2 (similar to Denmark or Netherlands), about 50% forest,At the heart of the Baltic SeaCurrencyEuroPopulation1.3 million (68% Estonians, 25% Russians)Capital Tallinn (403,000)Member of EU, Eurozone,NATO, Schengen, OECDAs you know, Estonia is a very small country at the heart of the baltic sea with just over 1.3 million people.Member of EU, NATO, Schengen, EurozoneHigh credit ratings -> high creditability of the country -> very low risk of default -> reliability of Estonian business environment for foreign investorsThis is backed up by a relatively good financial situation of the country - government debt is the lowest in the EU.Credit rating - measure of creditworthiness of the country. Credit ratings are calculated based on past history and current financial market participant, and based on estimates of the size of their property and entered into by the debt. Indicate a very low probability of default. The major worldwide rating agencies are Moody's, Standard and Poor's and Fitch Ratings.Credit ratingsFitch A+S&P AA-Moody’s A1
3Steadily growing economy Exports represent about 91% of Estonia’s GDPExcept in 2008 and 2013, inflation has well exceeded the GDP growth numbers.Exports represent about 91% of Estonia’s GDP – World Bank 2013.GDP per capita according to different calculations – EUR.Total GDP 18,4 Billion EUREesti majanduskasv on 2013. aastal põhinenud jätkuvalt sisenõudlusel. See on tulenenud eeskätt majapidamiste sissetulekute ja tarbimise suurenemisest. Ekspordi tugi on jäänud Eesti majandusele varem prognoositust väiksemaks, kuna aasta esimesel poolel oli Eesti peamiste kaubanduspartnerite kasv oodatust kesisem. Eesti majandus oli seetõttu 2013. aasta esimesel poolel languses. Kuigi kolmandas kvartalis majanduskasv taastus, jääb aastane kasv siiski tagasihoidliku 1% juurde. Majanduskasv kiireneb eksporditurgude kosumise toel 2014. aastal 2,6%ni ning 2015. aastal 3,9%ni.* forecastSource: Statistics Estonia and Ministry of Finance
4How did we do it?According to OECD Economic Survey, our strong recovery from the economic crisis has benefited from structural strengths of the Estonian economy:flexible labor force,business friendly regulation,well capitalized financial institutions,successful transition to euro,and sustained credibility of fiscal policy2013Unemployment 8.6%Average salary EURMinimum salary 320 EUR0% corporate income tax on reinvested profits – favourable for growing companiesLowest government debt in EUEstonia is one of the most successful countries in CEE in attracting FDI
5Our business environment is best for international business Establishing a company in 15 minutes0% income tax on reinvested profitsFlat-rate income tax at 21% (lowered to 20% in 2015)Remote access – e-residency to be launched in Dec 2014No restrictions to free movement of capitalMinimal government intervention, lowest government debt in EuropeForeign investorsCan own company 100%Can own land, real estateResidence permits for directors and specialistsSame rights as local investors
6Small nation must be flexible Estonians are in the lead in CEE in terms of educational level99% of high school students are learning English at school; 71% of profesional workforce is fluent in ate least one languageForward-looking mindset of universitiesTallinn Tech – active cooperation with major universities in the worldTartu University - one of the oldest universities of Europe (1632)Over 60% of the population is engaged in the services sectorCost base is more efficient than in most of Western EuropeEstonians rather break their arm than a promisePeople are our most valuable resouce. We are not great in numbers, so we have to invest in knowledge, forward thinking
7High ratings in business environment rankings 11th in Index of Economic Freedom Wall Street Journal / The Heritage Foundation6th in Trading Across Borders World Bank2nd in the Internet Freedom Freedom House29th in Global Competitiveness Report World Economic Forum28th in Corruption Perceptions Index Transparency InternationalSource: World Bank – Doing Business 2014
8The future is hereCitizens/residents have unique online identity: 1.2 million active ID cards (population: 1.3 million)100% of schools and government offices have broadband connection70% of homes have broadband connection110% mobile penetration98% of the bank transfers are performed electronically95% of the income tax declarations made via the e-Tax Board
9Digital ID gives us access to wide array of public e-services digital signaturee-electionse-schoole-Tax Boarde-Customse-Healthe-policeMobile parkingMobile paymentsInternet bankingCitizen’s Registryand many more…
10The history of e-Estonia 2000: Launch of e-Tax Board2000: Launch of m-Parking2003: Launch of ID bus ticket2005: i-Voting was introduced2007: Launch of e-Police system2008: Launch of e-Health system2010: Launch of e-Prescription2013: X-Road Europe introduced2013: Online Border-Crossing Queue System2014: e-residencyIn 1990s govt program ‘Tiger Leap’ to connect all schools to internet, wifi human rightWhole country covered by broadband by 2015
11More start-ups per capita than in any other country in Europe ERPLY - POS and ERP tools. Largest customers have 10k employees.Fortumo – Fortumo provides simple platform for creating mobile services in various countries. Recently US technology giant Intel and venture capital company Greycroft has bought shares of Fortumo. The deal is reportedly worth 10 million dollars.Transfer Wise - cheap money transfers. Charges a fraction of the price that banks and others charge for currency conversion. Co-founded by Skype’s first employee. Seedcamp alumni.NOW Innovations – mobile parking and payment solutiuonsGuardTime – keyless signatures service, to authenicate electronic data , proving signing time and signing entity. The solution relys only on hash trees, not cryptographic keys. Their clients are Japanese companies (Rakuten Bank, Brother), Estonian organisations (SEB Bank) and other organisations.Grabcad – community of mechanical engineers & engineering workflow tools.Modesat Communications - provides of high capacity modular-demodular DSP cores for wired and wireless broadband solutions.ZeroTurnaround - Java productivity tools, loved by developers.Fits.me – provides virtual fitting room solutions to online clothing retailers and brands....
12So this is why Estonia: Stability Connecting East and West Excellent economic growth numbers since joining EU and NATOSuccessful management of economic crisis, lowest government debt in EUConnecting East and WestAccessible – geographically, logistically and sociallyCommunication technology makes distances in Estonia irrelevantEase and efficiency of doing businessRanked among top 20 in most of pertaining indices by World Bank GroupLow bureacracy and corruption, advanced e-societySignificant cost efficiency compared with EU average – labour, taxes, property, energySmart peopleRanked 4th in the world in natural sciences, 11th in math studies by PISA#1 in Europe for startups per capitaCountry of foreign investorsForeign investors have played a decisive role in building Estonian economyAttracting FDI not with incentives, but with favorable business environmentGreat demo country to implement and test innovations!Since regaining its independence and historically, Estonia has turned to the direction of Scandinavia both culturally and in terms of business. Needless to say, 70 years of Soviet rule also prepared us well for business relations with our Eastern neighbors.