1. ESTONIA AT A GLANCE
Märt Helmja
Deputy Director of FDI unit

2. At the Heart of the Baltic Sea
(Map & location)
Area km2
Population 1,3 million
Member of EU, Eurozone, OECD, NATO and Schengen
Credit ratings: Fitch A+; S&P AA-; Moody’s A1

3. A Message from our President
“Were the internet to have a postal address, it would most likely be here in Estonia. We have reason to be proud of our highly developed telecommunications network. Estonia is a place you can take your laptop into the deepest forest and still hook up to the internet. It is no accident that Skype was born here.”
“Skype represents an ideal of what we think Estonia should be - a small group of people come together and come up with a really brilliant idea that becomes known all over.”
Toomas Hendrik Ilves,
President of Estonia
Welcome to e-Estonia!

4. Why Estonia?
A unique location and culture combining Nordic roots and Eastern influences. The Estonian approach is functional and one that creates timeless value.
A highly progressive environment that offers an efficient way of doing business. Our e-services, mobile communications and internet applications are among the most progressive in the world.
Among the most successful countries in the world in attracting foreign Investments.

5. High Position in Business Environment Rankings
1st in International Tax Competitiveness Index 2014 Tax Foundation
8th in Index of Economic Freedom 2015 /2nd in Europe Wall Street Journal / The Heritage Foundation 2015
6th in Trading Across Borders World Bank
2nd in the Internet Freedom Freedom House 2014
29th in Global Competitiveness Report 2015 World Economic Forum
26th in Corruption Perceptions Index 2014 Transparency International
Source: World Bank – Doing Business 2015

6. Low risk – Politically and Economically Stable
Political stability. Estonia is seen as the most stable country in CEE. Lowest government debt in Europe. Government debt was 10.0% in 2013 compared to 54,8% in Finland or 38% in Latvia for example. A balanced and future oriented state budget with a growing interest in entrepreneurs and foreign investors.
The higher the rank, the lower the risk
Source: IMD World Competitiveness Yearbook 2014

7. Estonian GDP by Economic Activity 2014
Source: Statistics Estonia

8. GDP Growth and Inflation, 2004-2016
* forecast
Source: Bank of Estonia ( )

9. Main Economic Indicators, 2012-2014
2013
2014
GDP real growth (%)
3.2
0.8
0.5
GDP (current prices, billion EUR)
17.0
18.4
19.5
Consumer price index (%)
3.9
2.8
-0.1
Labor force (thousands)
624.4
621.4
624.8
Growth of labour productivity
0.7
-0.2
0.3
Unemployment rate (ILO)
10.2
8.6
6.3
Average wage (EUR)
887
948
1,039
Wage real growth (%)
1.7
4.9
Source: Statistics Estonia

10. FDI Inflow by Country and Activity Stock as of 31.12.2014
Sweden
26%
Finland
22%
Netherlands
10%
Norway 6%
Russian Federation
Cyprus 3%
Denmark
Lithuania
Latvia
USA 2%
United Kingdom
Germany
Austria
Other
Financial and insurance activities
27%
Real estate activities
17%
Wholesale and retail trade; repair of motor vehicles and motorcycles
15%
Manufacturing
13%
Professional, scientific and technical activities 8%
Transport and storage 6%
Administrative and support service activities 3%
Information and communication 2%
Agriculture, forestry and fishery
Electricity, gas, steam and air conditioning supply
Other 5%
Source: Bank of Estonia ( )

11. Total Exports Across All Commodities (EUR)
Source: Statistics Estonia ( )

12. Estonian Foreign Trade - Commodities (EUR bln)
Source: Statistics Estonia

13. Commodities Exports by Country and Commodity 2014
Sweden
18,0%
Finland
15,3%
Latvia
10,7%
Russian Federation
9,8%
Lithuania
5,3%
Germany
4,9%
Norway
3,9%
United States of America
3,7%
Netherlands
2,7%
Denmark
2,6%
United Kingdom
2,4%
Others
20,7%
Machinery and transport equipment
34%
Miscellaneous manufactured articles
15%
Manufactured goods classified chiefly by material
Mineral fuels, lubricants and related materials
11%
Crude materials, inedible, except fuels 8%
Food and live animals
Chemicals and related products 6%
Other 3%
Source: Statistics Estonia

14. Commodities Imports by Country and Commodity 2014
Finland
15%
Germany
12%
Sweden
11%
Latvia 9%
Lithuania 8%
Poland
Russian Federation 6%
Netherlands 4%
China
United Kingdom 3%
Italy
Other
19%
Machinery and transport equipment
37%
Manufactured goods classified chiefly by material
15%
Mineral fuels, lubricants and related materials
13%
Chemicals and related products
11%
Miscellaneous manufactured articles
10%
Food and live animals 8%
Crude materials, inedible, except fuels 4%
Beverages and tobacco 3%
Other 1%
Source: Statistics Estonia ( )

15. Estonian Foreign Trade - Services (EUR bln)
Services exports represent 24% of Estonia’s GDP
Source: Bank of Estonia

16. Services Exports and Imports by Country 2013
Finland
24,8%
Russia
11,8%
Sweden
7,8%
Lithuania
7,1%
Latvia
6,9%
Germany
4,8% UK
4,4%
USA
4,2%
Norway
3,3%
Switzerland
Denmark
2,7%
Others
18,9%
Imports
Finland
14,8%
Sweden
8,9%
Latvia 8%
Germany
7,1% UK
6,2%
Russia
4,6%
Lithuania
4,5%
France
4,2%
Poland
Cyprus 4%
Norway
3,8%
Others
29,7%
Source: Bank of Estonia

17. Simple and Favourable Tax System
* 0% Corporate income tax on reinvested profits
All distributions are subject to income tax at the rate of 20% of the amount of taxable payment
Personal income tax: flat rate 20%. The same rate applies for expats
VAT: 20%
Social tax: 33% (20% for social security and 13% for health insurance)
Unemployment insurance: 2,6% of the gross salary. (The employer pays 0,8% of the salary and the employee 1,6%.)
No property tax
The land tax is from 0,1% to 2,5% on the assessed value of the land, rate established by local government (i.e in Tallinn 2,5%).
Easy administration - All the taxes can be declared via E- tax/e-customs (an electronic service desk of the Estonian Tax and Customs Board)
Source: KPMG

18. Information Society Indicators
100% of schools and government organizations are ICT equipped
Entire country is covered with a broadband connection
97% of businesses use computers
80% of homes have broadband connection
99,8% of bank transfers are performed electronically
95% of income tax declarations are made via the e-Tax Board
25% of votes were cast over the internet on 2013
66% of the population participated in the census via internet in 2012
More than 93% of the population has an ID-Card
Needs an update

19. Labour Market and Education System
Total labour force: 674,400
The unemployment rate: 6,3% in Dec 2014
General working time: 8 hours a day, 5 days per week. The duration of one shift may not exceed 12 hours
Overtime is allowed by mutual agreement
The duration of the annual vacation: 28 days
10 Public holidays a year
The average wage in Estonia in 2014 is EUR The monthly minimum wage for full-time work is EUR 390 / 2.34 €/h.
7 universities (6 public, 1 private) - ca 43,647 students
University of Tartu – 14,179 students
Tallinn University of Technology – 12,926 students
Tallinn University – 9,391 students
Estonian University of Life Sciences – 3,905 students
Estonian Academy of Arts – 1,102 students
Estonian Academy of Music and Threatre – 702 students
Estonian Business School – 1,442 students
17 other professional higher education institutions – ca 11,500 students
47 vocational schools - ca 25,200 students
204 gymnasiums (high schools) - ca 23,400 students
7 universities (6 public, 1 private) - ca 49,400 students
University of Tartu – 15,800 students
Tallinn University of Technology – 12,900 students
Tallinn University – 10,300 students
Estonian University of Life Sciences – 4,300 students
Estonian Academy of Arts – 1,130 students
22 other professional higher education institutions – ca 15,400 students
48 vocational schools - ca 26,200 students
214 gymnasiums (high schools) - ca 24,000 students
Divide into 2

20. Key Sectors ICT Transport and logistics services Shared services
Industrial machinery and metalworking
Electronics

21. ICT
Estonia is the host country for NATO's Cooperative Cyber Defence Center of Excellence and the EU IT Agency’s headquarter.
The computer security company McAfee ranks Estonia as having a reliable cyber security structure.
Estonia is second in the internet freedom in the world, according to Freedom House.
Estonia is the global pioneer in adopting electronic government and numerous ID-card based e-services.
The development center of Skype is located in Estonia. Besides that also companies like Symantec, CGI, Fujitsu and many others have their base in Estonia.
2,560 companies are active in the ICT sector, contributing 5% of total sales in business activities in Estonia. Over 19,500 employees – 3,1% of total employment in Estonia.

22. Transport and Logistics Services
An impressive infrastructure – 5 key international ports, 4 free zones, 10 border posts to Russia, block trains to Moscow and Beijing, shortest EU flight time to China.
Estonia is the geographical midpoint of Northern Europe and therefore the best place to set up distribution centres and to generate added value.
Europe's most effective rail operator, Europe's most modern and up to date airport and the largest port at the Baltic Sea are all located in Estonia.
Estonia is ranked 7th out of 189 economies for the ease of Trading Across Borders.

23. Shared Services
Sustainable, high-quality, competitive costs and low risk solutions for BPO, IT and financial services shared service centres, customer and technical support centres.
Estonia is the regional market leader in IT shared services.
55% of the workforce are fluent in one or more foreign languages.
Top language skills: Russian, English, Finnish, German, Swedish.
Solid track record in shared services: Kuehne+Nagel, Statoil, TeliaSonera, AGA (Linde Group), Stora Enso, Transcom, Arvato (Bertelsmann).

24. Industrial Machinery and Metalworking
Estonia offers a dynamic, internationally focused mechanical engineering ecosystem, excellent accessibility, a sustainable, high- quality skills base and competitive, low-inflation costs.
1,370 companies are active in the machinery and metalworking sector, ca 20,400 direct employees.
EUR 1.8 billion revenues, of which 50% is generated from exports.
3 main branches:
Metals and metal products – 57% of total revenues;
Transport equipment – 21% of total revenues. 88% of transport equipment production is exported;
Machinery, tools & equipment – 18% of total revenues.
Examples of companies in Estonia: ABB, Hanza Tarkon, Metalliset Group, Ruukki.

25. Electronics
Estonia offers distinctive opportunities as a near-shore electronics hub for both in-house and outsourced production and distribution.
200 companies are active in electronics sector, ca 10,800 direct employees.
EUR 2.3 billion revenues, of which 91% is generated from exports.
2 main branches:
Computer, Electronic & Optical Products – 76% of total revenues;
Electrical Equipment – 24% of total revenues.
Examples of companies in Estonia: Ericsson, Stoneridge Electronics, ABB, PKC Group.

26. Rail Baltic
Total Capital Costs – € 3,5 Billion

27. Estonian Investment Agency
EIA is a division within Enterprise Estonia
Our mission
to ensure a competitive business environment for foreign investments in Estonia
to establish and develop business relationships with international companies
We provide
Information services and investment preparation
Investment proposals and tours
Consulting and project management
Facilitating contacts, negotiation with authorities
Organizing recruitment and identifying suitable properties
Post-investment / aftercare services
Our representations:
Tallinn, Estonia
Hamburg, Germany
Helsinki, Finland
Stockholm, Sweden
Silicon Valley, USA
Tokyo, Japan
Shanghai, China
Saint-Petersburg, Russia

28. THANK YOU!