Estonia: Nordic hub for digital and knowledge-based business
The Director of Estonia's investment promotion agency spells out the northern European country's appeal as an industrial and tech hub.
Estonia has many advantages that make it a smart, agile investment location for businesses with global ambitions. These include world-class human capital, unique digital capabilities, a robust pro-business environment, and a scalable location within the EU. As a Northern European hub for industrial, global business services, supply chain and a world class IT centre, Estonia provides a competitive environment that allows innovative solutions and services to be researched, developed and delivered globally.
Commitment to digitalisation - Owing to a two-decade commitment to IT, Estonia has become one of the world′s most advanced digital societies and a recognised leader in digital skills, infrastructure and legislation. It is a country where digital signatures are preferred to physical ones, a third of the population votes online, companies are established online in a matter of hours and it takes only 5 minutes to declare your taxes online. By fully reinventing our methods of government and business through digitalisation, we have gained ultimate effectiveness and transparency - a nation based on digital solutions and e-services.
Moreover, as IT becomes the value driver in all industries, Estonia is uniquely positioned as the location of choice for knowledge and digital business. Estonia has exceptional capabilities in the R&D and application of software, high-tech systems, digital identity technologies and telecommunications. Our companies are acknowledged world leaders in blockchain, connected networks, and cleantech, and are at the cutting edge of IoT, big data, automation and real-time computing. Estonia boasts a fully digital ecosystem, world class cybersecurity, and soon-to-be-completed 5G infrastructure.
High entrepreneurial activity - Entrepreneurship is deeply embedded in Estonia's mindset: Skype was born here, and its effect started a generation of entrepreneurs whose aspirations do not end with the borders of their home country. Estonia recently ranked 1st in Europe for entrepreneurial employee activity and competitiveness (World Economic Forum). We are also one of the leading European countries in the number of startups per capita. A key strength is strong fundamentals in human resources. Estonians are high achievers from an early age. IT skills are taught in primary school, and students rank in the top 10 globally in science, mathematics and reading at the secondary school level. The majority of Estonia′s workforce is multilingual and provides high added value. Moreover, the strong digital mindset also makes the workforce highly adaptable.
Home-grown innovations and successful investments - From multinational companies to high-growth start-ups, Estonia has a two-decade track record of successful investments and innovations. Among famous homegrown Estonian successes are companies such as Fortumo, Guardtime and Skeleton Technologies which have collaborated with global giants like Microsoft, CGI and Fujitsu, to create a dynamic environment ideal for investment and innovation. Estonians have been at the forefront of some key technological innovations - Skype revolutionised communication; TransferWise changed international money transfers, Taxify disrupted the global ride-sharing industry while Starship robots reframe local delivery. This is proof of the vibrant startup culture in Estonia.
We are working hard to become one of the world′s best places for startups by building a strong ecosystem, training the founders and educating the local investors - as well as attracting foreign investors and initiating new accelerator funds. No less important is ensuring friendly regulations to make it easy to operate a startup, invest or raise funding in Estonia.
Estonian e-Residency: Gateway to the EU - Being a full EU and Eurozone member with a competitive economy helps provide scalability to businesses, with Estonia increasingly serving as a base for pan-European activity. In 2014, Estonia launched e-Residency, a novel digital nation concept for global entrepreneurs. e-Residency is a government-issued digital ID that offers the freedom to easily start and run a global business in a trusted EU environment. Since the start of the programme, we have over 45,000 e-residents from over 150 countries, who have established over 5,000 companies
The best tax system in the OECD - With the 0 per cent corporate income tax on retained and reinvested profits, Estonia enables companies to grow and develop fast. That along with other favourable tax regulations has ranked Estonia No 1 in the International Tax Competitiveness Index. Estonia consistently ranks as one of the most open, competitive and transparent economies in the world. We are placed 12th in the World Bank′s 2018 Ease of Doing Business Index, surpassing Finland, Australia, Germany, Canada and Switzerland, and 6th in the Economic Freedom Index, ahead of Canada and the UK.
Estonia is an excellent business location that has been developed in cooperation with our investors and entrepreneurs. But we are not going to rest on our laurels, instead, we are going to keep shaping our business environment to continue offering you a nation-scale testbed for your solutions, a flexible legal environment and powerful tech ecosystem. We welcome you to Estonia to build the perfect business environment together!
Allan Selirand is the Director of the Estonian Investment Agency.