Estonia at a Glance

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  • Estonia covers an area of 45 227 sq km \n We are here, with population of 1.3 mil near Finland, Sweden, Latvia and Russia.\n \n 50% of Estonian land is covered by forests.\n \n Estonian climate is humid-temperate.\n \n 30% of Estonia’s 1,345 million population lives \n in the capital Tallinn.\n\n
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  • Maintaining a favourable business environment and increasing the economy's flexibility have become the key issues.\nThe medium-term budgetary objective of the government is to keep the general government budget in surplus. \nA conservative fiscal policy will ensure a low level of government debt, which is a prerequisite for ensuring the long-term sustainability of public finances.\n\n
  • Estonia’s credit rating was raised by Fitch Ratings, which cited economic growth, improved public finances and the country’s adoption of the euro on Jan. 1.\nThe Baltic nation’s rating was raised one step to A+, The rating is the second- highest in eastern Europe, behind the Slovenia at AA and on a par with the Czech Republic and Slovakia.\n\nStandard&Poor's RatingsDirect,       Research Update, August 9, 2011\n    FitchRatings Sovereigns, July 2011\n    Moody's Investors Service Analysis, June 2010\n\nEstonia has the EU’s only budget surplus, 0.1 percent of GDP, and lowest public debt, 6.6 percent, last year.\n
  • On the other hand we have gotten some very good rankings from Wall street Journal, World bank and others. Supposedly we’re easy to do business with, we have got low corruption level and high quality of public institutions.\n\nThe Wall Street Journal and Heritage Foundation's Index of Economic Freedom 2011 ranks Estonia as one of the freest economies in the world – 14th out of 183 countries.\nThe World Bank ranks Estonia 17th in its Doing Business in 2011 report, which covers 183 countries.\nThe World Economic Forum's Global Competitiveness Index 2010-2011 ranks Estonia 33rd among 139 countries. The survey among business leaders measures economic competitiveness based on a combination of technology, the quality of public institutions, and the macroeconomic environment.\nTransparency International ranked Estonia 26th out of 178 countries in 2010. Among members of the European Union, Estonia places 15th.\n\n\n
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  • Up to 2008 we were doing pretty, our GDP average growth was 7% per year. During that period, Estonia took a big jump in the improvement of average standard of living.\n\nThen economic situation changed in spring 2007, the crisis came causing a rapid collapse of export capacities and our GDP growth fell to a negative 14.1.\n\nFortunately, economic growth turned positive again in the 2nd quarter of 2010, GDP being 3.1%\n\nAnd now we are facing rapid growth of 8.4 %.\n\n\n\nIn 2000–2008, Estonia's economy saw an average growth of 7% per year, which placed Estonia among the three countries in the EU with the fastest growing real GDP. During that period, Estonia took a big jump in the improvement of average standard of living, increasing its GDP per capita from 45% in 2000 to 67% in 2008, compared to EU27.\n\nThe economic situation changed in spring 2007. The banks tightened the granting of credits, consumers' confidence diminished, and the real estate market declined. Private sector investments also started to decrease, and the downward trend steepened. In autumn 2008, the economic crisis culminated, causing a rapid collapse of export capacities, worsening the availability of credit money, and increasing the insecurity of companies and households even more. The overall decrease in GDP growth rate for 2009 was 14.1%.\n\nEconomic growth turned positive in the 2nd quarter of 2010, GDP being 3.1% larger than year ago. The GDP of Estonia increased by 6.6% in the 4th quarter of 2010 compared to the same period of the previous year. In the 4th quarter, growth of the manufacturing value added contributed to the GDP the most.\n\nAccording to the 2011 forecast of the Estonian Ministry of Finance, the Estonian economy will grow in 2011 and in 2012 by 4%. This year export will be the main source for economic growth, that will increase the consumer sentiment and it will gradually improve domestic demand. Next year domestic demand's contribution to economic growth will increase due to the growth in spending of private consumption and investments.\nIn 2013-2015 Estonian economic growth is expected to stabilise round 3.5%.\n\n\n\n\n
  • Our taxes are easy and transparent.\nThe system of VAT (set at 20%) is in harmony with EU requirements.\nEmployers pay a social and health insurance tax, which is 33% of the gross wage.(20% for social security and 13% for health insurance)\nEstonia's long-serving system of low, flat rate taxes, in particular the 21% income tax, is simple with no "hidden extras". \nTo encourage companies to expand their business, all reinvested profits have been exempted from corporate income tax. However, any redistributed profits, for example profits paid for dividends, are taxed at 21%.\n \n\n
  • Estonia's open economy, excellent transportation links and central location make it an ideal base for production and distribution. \nEstonia has captured a considerable share of the rapidly growing transit trade through the Baltic Sea. The deep-water port and free zone of Muuga is one of the most advanced in the region. It serves as an entrepôt for Baltic and CIS markets. The new multifunctional port and free zone in the north-east of Estonia, Sillamäe, is the easternmost port of the EU, capable of handling all cargo groups from oil products and dry bulk to containerised cargo. Passenger and freight links provide fast sea crossings across the Baltic Sea.\nDirect air connections give easy access to Tallinn from major European capitals.In addition, Tartu airport was renovated in 2009 in order to provide regular international flights.Estonian railways use the same gauge that is used throughout Russia and the CIS, making Estonia an attractive European hub for bulk shipment of goods from the Far East: ca 80% of rail freight is transit traffic.\n\n
  • Foreign investors, mostly Nordic, have made considerable investments into high technology and communication networks in order to modernise the IT communications infrastructure in Estonia. As a result, the Estonian telecommunications sector is one of the most developed in Central and Eastern Europe.\n
  • Thanks to Foreign investors, most of which are Nordic, we have got very high technology and communication networks which is one of the most developed in Central and Eastern Europe. All our schools and governmental organisations have broadband connection.\n\nBecause of that Estonia ranks among the top ten in the world in regards to broadband access.\nIn addition to physical Internet access points, there are over 1 000 free wireless Internet sites around the country We are so well connected, that we have more mobile phone contracts than residents - 117 per 100 people (Estonian Competition Authority, 2009).\n\n
  • Foreign investors, mostly Nordic, have made considerable investments into high technology and communication networks in order to modernise the IT communications infrastructure in Estonia. As a result, the Estonian telecommunications sector is one of the most developed in Central and Eastern Europe.\n
  • Because we are so used to doing stuff online, we have all those services available for the public.\n
  • The peak of unemployment remained in the beginning of 2010 due to low labour demand. In 2011 the unemployment rate fell to 13.5% as employment starts to grow.\nThe average monthly salary in 2010 was 792 € (in 2009 it was 784 €). In 2011 the average wage is expected to increase by 3.5%\n
  • In 2010 74.5% of Estonia's total trade was with EU member countries. In 2010 the value of goods exported from Estonia to the European Union (EU27) countries was 5.99 billion €, accounting for 69% of Estonia's total exports. Compared to 2009, exports to the EU27 countries increased by 33%. Exports to non-EU countries or the so-called third countries increased 39%.\nImports from the EU27 countries to Estonia totalled 7.4 billion € with the share of 80% of Estonia's total imports in 2010. Compared to 2009, imports from EU countries increased by 26%. Imports from third countries increased 31%.\nEstonia's main trade partners are Finland, Sweden, Latvia and Russia. Estonia's major exports are machinery and equipment, mineral products, agricultural products and food preparations, wood (wood products) and metals (metal products).Estonia's main imports are machinery and equipment, mineral products, agricultural products and food preparations and metals (metal products).\n\n
  • Estonia's major exports are machinery and equipment, mineral products, agricultural products and food preparations, wood (wood products) and metals (metal products).Estonia's main imports are machinery and equipment, mineral products, agricultural products and food preparations and metals (metal products).\n\n
  • Investment climate is very welcoming in Estonia. Foreign Investors are given the same rights as local companies, they can own land and .........\n\nEstonia is one of the leaders in Central and Eastern Europe in terms of foreign direct investments (FDI) per capita. The stock of total FDI peaked at 12,3 billion EUR as of 31 December 2010. 58.6% of foreign investment came from Sweden and Finland.\n\nToday foreign companies dominate in several sectors of the Estonian economy. Banking and telecommunications are dominated by the Nordic players, but the food and electronics industries also rely heavily on foreign capital. In relation to its size, Estonia has long been a leading Eastern European country in attracting foreign direct investments.\n\nEstonia is one of the leaders in Central and Eastern Europe in terms of foreign direct investments (FDI) per capita. The stock of total FDI peaked at 12,3 billion EUR as of 31 December 2010. 58.6% of foreign investment came from Sweden and Finland.\n\n\n
  • Estonian companies have made significant foreign investments of its own, mainly (55.3%) in Latvia and Lithuania\n
  • Many costs such as energy, labour, transport services, telecommunications and property expenses are considerably lower than in other parts of the Baltic Sea region. Nevertheless, Estonia has acquired a well-deserved reputation for the high quality of its products. Covering a wide range of industries, investors find they can achieve Scandinavian quality levels at lower costs.\n\nEstonian energy system is the only predominantly oil-shale-based energy production system in the world\nThe biggest energy provider in Estonia is Eesti Energia, a 100% state-owned company. The 2nd actor: 4energia represents less than 5% of the electricity production.\nThe price of electricity consists of four components: electricity, network service, renewable energy support and excise duty\nThe basic rate for electrical energy is 0,07 EUR per kWh (excluding VAT)\n
  • Natural gas is imported into Estonia from Russia and from Latvia without intermediary countries.\nEstonian natural gas company is Eesti Gaas\n
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  • Estonia at a Glance

    1. 1. Estonia at a GlanceEstonian Investment AgencyEnterprise Estonia23rd September 2011Oksana Novozilova
    2. 2. (Map & location)
    3. 3. A Dynamic EconomyFlexibility and E-country with aopenness favourable business climateBalanced state budget,liberal trade andinvestment laws
    4. 4. International Credit RatingsMoodys: A1, outlook stableStandard & Poors: AA-, outlook stableFitch: A+, outlook stable
    5. 5. Rankings• 14th in Index of Economic Freedom 2011 (Wall Street Journal)• 17th in the Ease of Doing Business Report 2010 (World Bank)• 33rd in Global Competitiveness Report 2010/11 (World Economic Forum)• 26th in the Corruption Perceptions Index 2010, 15th among EU (Transparency International)
    6. 6. GDP growth and inflation, 2002-2011 10.2 9.2 8.5 8.4 7.8 7.5 7.1 7.1 3.1 -3.6 gdp growth inflation -14.1 2002 2004 2006 2008 2010 2011 Q2 Source: World Economic Forum
    7. 7. Taxes20% Value Added Tax (July 09)33% Social Tax + 4,2%unemployment security tax (July 09)21% Income Tax – flat 21% rate for individuals, 144€ /monthincome-tax free0% Corporate Income Tax **on all reinvested profits or profits retained in the company
    8. 8. CommunicationsRoads:Estonian roads are toll freeElectronic pre-arrival customs processing for the European Unionand Russia border checkpointsPorts:Port of Tallinn – the largest and deepest (18 m of depth) port ofthe Baltic Sea, all-year ice freePort of Sillamäe – the eastmost port of the European UnionEU tax exemption in the customs-free zones of the portsAir Links2 main international airportsGlobal connections via Copenhagen, Helsinki, LondonRail:Direct, common gauge, rail routes to Russia, Central Asia and on
    9. 9. ICT - Digital Link• 100% of schools and government organisations have broadband connection• 68% of homes have broadband connection (Statistics Estonia 2011)• 98% of bank transfers are performed electronically• 92% of income tax declarations are made via the e-Tax Board• 1 163 917 active ID-Cards• Digital signature legislation
    10. 10. e-Services (examples)• ID card • e-Customs• Citizen’s Portal • e-Health• m-Parking • e-Police• e-Elections • Paying by mobile• e-Schools phone• e-Tax board • Internet banking
    11. 11. Labour• Total labour force: 691 000• The unemployment rate: 13,3% in 2011 IIQ• General working time: 8 hours a day, 5 days per week.• Overtime is allowed by mutual agreement• The duration of the annual vacation: 28 calendar days• 10 Public holidays a year• The average wages in Estonia in 2010 was EUR 792.• The monthly minimum wage for full-time work is EUR 278
    12. 12. Foreign Trade by Country 1489 EXPORT Finland 1376 IMPORT 1369Sweden 1011 2010 788 Export: to EU27 Latvia 1002 5.99billion € (70% EU) Russia 846 Import: from EU27 7.4 762 billion € (80% EU) 429Lithuania 715 456Germany 1041 330 USA 92 172 UK 187
    13. 13. Foreign Trade by Sector 19764 ExportMachinery & equipment 21930 Import 12121Wood, products & paper 6097 16956 Mineral products 22227 8819 Metals & products of 8764 8413Other industrial products 2873 6607 Vehicles 7053 5627 Chemical ind. 10812 6105 Textiles 4088 10244 Agriculture, food, bev. 14596 8660 Other 13081
    14. 14. Investment climateFDI inflow by countries and activity, stock as of 30.06.2011Sweden 33,3% Financial and insurance activities 28,7%Finland 24,1% Manufacturing 16,5%Netherlands 8,4%Norway 4,9% Wholesale and retail trade 14,1%Russia 3,4% Real estate activities 13,9%Cyprus 2,9% Professional, scientific, technical activities 7,6%Germany 2,2%Lithuania 2,1% Transportation and storage 5,3%UK 2,0% Utilities 3,1%Luxembourg 1,9%Other 14,8% Other 10,8%
    15. 15. Investment climate FDI outflow by countries and activity, stock as of 31.12.2010Lithuania 30% Financial and insurance activities 40,9%Latvia 25,3% Professional, scientific, technical activities 15,6%Cyprus 13,4% Transportation and storage 14,9%Russia 6,2% Real estate activities 11,4%Finland 6,1% Wholesale and retail trade 6,4%Ukraine 3,4% Construction 3,1%Italy 2%Netherlands 1,9% Manufacturing 2,5%Others 11,7% Other 5,2%
    16. 16. Estonian electricity prices are the most competitive in Europe Electricity price for medium size industries, 2010 (EUR per kWh) 0.1221 0.0573 ESTONIA Finland Sweden Latvia Germany Poland UK Lithuania Czech Rep HungarySource: Eurostat
    17. 17. Estonian electricity prices are the most competitive in Europe Gas price for medium size industries, 2010 (EUR per GJ) 10.3179 5.6322 ESTONIA UK Latvia Finland Czech Rep Poland Germany Lithuania Hungary SwedenSource: Eurostat
    18. 18. Active companies in 2010Companies 2010 (EMTA declarations) No % employedMicro 1-9 employees 39274 84,5 114 572Small 10-49 5950 12,8 119 358Medium 50-249 1126 2,4 108 364Large +250 132 0,3 82 251Sum: 46482 100 424 546
    19. 19. Estonian Investment Agency
    20. 20. Services • General information on enquiries • Investment tours of Estonia • Detailed investment proposals • Identifying suitable properties • Advice on financing • Negotiations with authorities • Sourcing
    21. 21. Offices• Tallinn, Estonia • Tokyo, Japan• Helsinki, Finland • Shanghai, China• Stockholm, Sweden • Moscow, Russia• London, UK • St. Petersburg, Russia• Hamburg, Germany • Kiev, Ukraine• Silicon Valley, USA
    22. 22. Enterprise Estonia
    23. 23. Some divisions Investment and tradeof Enterprise development division Estonian Tourist board Business StartUp division Export Division Innovation Division
    24. 24. THANK YOU! :)

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