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Estonian Legislation for Foreign Investments

Estonian Legislation for Foreign Investments

Updated on Wednesday 27th May 2015

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Why invest in Estonia?

Foreign investment has developed progressively in Estonia in the last decade due to the country’s constant economic growth. The country has become one of the most attractive destinations for foreign direct investment thanks to the Estonian government’s pro-investment legislation. Creating lucrative conditions for FDI has been an important matter for Estonia’s economic development.

Estonia has a well-developed strategy for FDI in the IT, biotechnology and organic agriculture fields. The budget allocations, the free exchange regime, the fact that there are no restrictions applied to currency, dividends and funds and their conversion is free are part of that strategy. In case of companies that decide to terminate their business in Estonia all assets will be repatriated without any restrictions. These policies and the Estonian pro-investment legislation have led to massive foreign investments in Estonia in the last years.

Foreign businesses in Estonia

Foreign companies benefit from equal rights and obligations with the inland companies, a factor that allowed foreigners to open companies in Estonia without any restrictions.

The country has also adhered to international agreements for protecting foreign investments and has concluded treaties with more than 30 countries including the United States of America, France, Germany and Switzerland. Estonia has signed double tax treaties with more than 50 countries in order to avoid double taxation on income.

Reasons to invest in Estonia

  • ·         Estonia is very well positioned geographically in the Baltic Sea Region, being a transit country between Russia and Central Europe;
  • ·         Estonia’s financial system is trustworthy due to the government regulations about foreign investment;
  • ·         the Estonian taxation system is very simple and transparent;
  • ·         there are no taxes on reinvested profits and companies benefit from an online taxation portal called e-Tax Board that simplifies tax payments;
  • ·         Estonia counts on cheap, high educated and skilled workforce compared to other Scandinavian countries;
  • ·         Estonia does not control or restrict foreign investment. Foreign companies have no limitations when it comes to capital investment and companies can be totally owned by non-residents;
  • ·         being a member of the EU, Estonia’s commercial legislation is aligned to the EU Directives;
  • ·         There are three free zones in Estonia: Muuga port, Sillamae port and Valga port, all accessible to FDI;
  • ·         Entrepreneurs have the right to own property in Estonia;

 

If you want to register a company in Estonia and want to know more about the legislation on foreign investments you can contact our lawyers in Estonia.

 

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