ESTONIA AT A GLANCE Märt Helmja Deputy Director of FDI unit.
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Transcript of ESTONIA AT A GLANCE Märt Helmja Deputy Director of FDI unit.
(Map & location)• Area 45 227 km2
• Population 1,3 million
• Member of EU, Eurozone, OECD, NATO and Schengen
• Credit ratings: Fitch A+; S&P AA-; Moody’s A1
At the Heart of the Baltic Sea
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!
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.
High Position in Business Environment Rankings
Source: World Bank – Doing Business 2015
13
5 6 7 8 911
1417
2023 24
2932
44
54
Ease of Doing Business Ranking 2015
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 2015 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
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.
9.078.39 8.13
7.48
6.54 6.496.07
5.49 5.31 5.24
0
1
2
3
4
5
6
7
8
9
10
Risk of political instability, global rank
Source: IMD World Competitiveness Yearbook 2014
The higher the rank, the lower the risk
Estonian GDP by Economic Activity 2014
Source: Statistics Estonia
Manufacturing18%
Wholesale and retail trade14%
Real estate activities12%
Transportation and storage9%
Construction8%
Public administration and defence
8%
Professional, scientific and technical activities
6%
Information and com-munication
5%
Education5%
Administrative and support service activi-
ties4%
Health and social work4%
Agriculture, forestry and fishing4% Financial and insurance activities
4%
GDP Growth and Inflation, 2004-2016
9,210,2
7,1
-3,6
-14,1
3,1
7,6
3,2
0,8 0,5
2,23,1 3,6
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* 2017*
gdp growth, %
* forecastSource: Bank of Estonia (10.06.2015)
Main Economic Indicators, 2012-2014
2012 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 6.3
Source: Statistics Estonia
FDI Inflow by Country and Activity Stock as of 31.12.2014
Source: Bank of Estonia (27.03.2015)
Sweden 26%Finland 22%Netherlands 10%Norway 6%Russian Federation 6%
Cyprus 3%Denmark 3%Lithuania 3%Latvia 3%USA 2%United Kingdom 2%Germany 2%Austria 2%Other 10%
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 2%Electricity, gas, steam and air conditioning supply 2%Other 5%
Total Exports Across All Commodities (EUR)
Source: Statistics Estonia (18.03.2015)
2010 2011 2012 2013 20140 €
2,000,000,000 €
4,000,000,000 €
6,000,000,000 €
8,000,000,000 €
10,000,000,000 €
12,000,000,000 €
14,000,000,000 €
8,7
43
,00
7,2
48
€
12
,00
3,3
60
,29
8 €
12
,52
1,1
45
,70
5 €
12
,29
7,2
64
,12
0 €
12
,08
3,4
23
,52
8 €
Estonian Foreign Trade - Commodities (EUR bln)
0
2
4
6
8
10
12
14
16
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
4,7
6,2
7,7 88,5
6,5
8,8
12,1 12,5 12,3 12,1
6,7
8,2
10,711,4
10,9
7,6
9,2
12,613,8 13,7 13,7
Exports Imports
Source: Statistics Estonia
Commodities Exports by Country and Commodity 2014
Source: Statistics Estonia
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 15%Mineral fuels, lubricants and related materials 11%Crude materials, inedible, except fuels 8%Food and live animals 8%Chemicals and related products 6%Other 3%
Commodities Imports by Country and Commodity 2014
Source: Statistics Estonia (11.03.2015)
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%
Finland 15%
Germany 12%Sweden 11%
Latvia 9%Lithuania 8%
Poland 8%Russian Federation 6%
Netherlands 4%China 4%
United Kingdom 3%
Italy 3%
Other 19%
Estonian Foreign Trade - Services (EUR bln)
0
1
2
3
4
5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
4.72,6
2,9
3,33,5 3,2
3,4
3,9
4,34,5
1,4
1,82
2,2 2,3
1,82,1
2,73
3,2
Exports Imports
Source: Bank of Estonia
Services exports represent 24% of Estonia’s GDP
Exports
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 3,3%
Denmark 2,7%
Others 18,9%
Services Exports and Imports by Country 2013
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 4,2%
Cyprus 4%
Norway 3,8%
Others 29,7%
Source: Bank of Estonia
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
29.6%
24.5%
23.0%
22.0%
19.0%
19.0%
19.0%
15.0%
15.0%
0.0% *
0.0% 10.0% 20.0% 30.0% 40.0%
Germany
Finland
UK
Sweden
Poland
Czech Rep
Hungary
Latvia
Lithuania
ESTONIA
Tax rate on corporate income, 2014
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
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 1 039. The monthly minimum wage for full-time work is EUR 390 / 2.34 €/h.
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
7 universities (6 public, 1 private) - ca 43,647 students
o University of Tartu – 14,179 studentso Tallinn University of Technology – 12,926
studentso Tallinn University – 9,391 studentso Estonian University of Life Sciences – 3,905
studentso Estonian Academy of Arts – 1,102 studentso Estonian Academy of Music and Threatre –
702 studentso 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
Key Sectors
ICT
Transport and logistics services
Shared services
Industrial machinery and metalworking
Electronics
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.
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.
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).
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:o Metals and metal products – 57% of total revenues;
o Transport equipment – 21% of total revenues. 88% of transport equipment production
is exported;
o Machinery, tools & equipment – 18% of total revenues.
Examples of companies in Estonia: ABB, Hanza Tarkon, Metalliset Group,
Ruukki.
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:
o Computer, Electronic & Optical Products – 76% of total revenues;o Electrical Equipment – 24% of total revenues.
Examples of companies in Estonia: Ericsson, Stoneridge Electronics, ABB, PKC Group.
Estonian Investment Agency
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
EIA is a division within Enterprise Estonia