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WHAT CAN ESTONIA SOLVE FOR YOU?
KRISTI TIIVASEstonian Investment Agency» investinestonia.com
Area45,227 km2 (similar to Denmark or Netherlands), about 50% forest,At the heart of the Baltic Sea
Currency
Euro
Population1.3 million (68% Estonians, 25% Russians)Capital Tallinn (403,000)
Member of EU, Eurozone,
NATO, Schengen, OECD
A few words of introductionA few words of introduction
Credit ratingsFitch A+
S&P AA-
Moody’s A1
Steadily growing economy
* forecastSource: Statistics Estonia and Ministry of Finance
Exports represent about 91% of Estonia’s GDPExports represent about 91% of Estonia’s GDP
7,87,1
7,59,2
10,2
7,1
-3,6
-14,1
2,5
8,3
4,7
1,6
2,1
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
According to OECD Economic Survey, our strong recovery from the economic crisis has benefited from structural strengths of the Estonian economy:
flexible labor force,
business friendly regulation,
well capitalized financial institutions,
successful transition to euro,
and sustained credibility of fiscal policy
According to OECD Economic Survey, our strong recovery from the economic crisis has benefited from structural strengths of the Estonian economy:
flexible labor force,
business friendly regulation,
well capitalized financial institutions,
successful transition to euro,
and sustained credibility of fiscal policy
Estonia is one of the most successful countries in CEE in attracting FDIEstonia is one of the most successful countries in CEE in attracting FDI
How did we do it?
0% corporate income tax on reinvested profits – favourable for growing companies
0% corporate income tax on reinvested profits – favourable for growing companies
2013Unemployment 8.6%Average salary 948 EURMinimum salary 320 EUR
2013Unemployment 8.6%Average salary 948 EURMinimum salary 320 EUR
Lowest government debt in EULowest government debt in EU
Our business environment is best for international business
• Establishing a company in 15 minutes
• 0% income tax on reinvested profits
• Flat-rate income tax at 21% (lowered to 20% in 2015)
• Remote access – e-residency to be launched in Dec 2014
• No restrictions to free movement of capital
• Minimal government intervention, lowest government debt in Europe
Foreign investors
•Can own company 100%
•Can own land, real estate
•Residence permits for directors
and specialists
•Same rights as local investors
Small nation must be flexible Estonians are in the lead in CEE in terms of educational level
99% of high school students are learning English at school; 71% of profesional workforce is fluent in ate least one language
Forward-looking mindset of universities
Tallinn Tech – active cooperation with major universities in the world
Tartu University - one of the oldest universities of Europe (1632)
Over 60% of the population is engaged in the services sector
Cost base is more efficient than in most of Western Europe
Estonians rather break their arm than a promise
High ratings in business environment rankings
Source: World Bank – Doing Business 2014
11th in Index of Economic Freedom 2014 Wall Street Journal / The Heritage Foundation
6th in Trading Across Borders 2015 World Bank
2nd in the Internet Freedom Freedom House
29th in Global Competitiveness Report 2014 World Economic Forum
28th in Corruption Perceptions Index 2013 Transparency International
11th in Index of Economic Freedom 2014 Wall Street Journal / The Heritage Foundation
6th in Trading Across Borders 2015 World Bank
2nd in the Internet Freedom Freedom House
29th in Global Competitiveness Report 2014 World Economic Forum
28th in Corruption Perceptions Index 2013 Transparency International
The future is here
Citizens/residents have unique online identity: 1.2 million active ID cards (population: 1.3 million)
100% of schools and government offices have broadband connection
70% of homes have broadband connection
110% mobile penetration
98% of the bank transfers are performed electronically
95% of the income tax declarations made via the e-Tax Board
Digital ID gives us access to wide array of public e-services
digital signature e-elections e-school e-Tax Board e-Customs e-Health
e-police Mobile parking Mobile payments Internet banking Citizen’s Registry and many more…
The history of e-Estonia
2000: Launch of e-Tax Board 2000: Launch of m-Parking2003: Launch of ID bus ticket2005: i-Voting was introduced2007: Launch of e-Police system2008: Launch of e-Health system2010: Launch of e-Prescription2013: X-Road Europe introduced2013: Online Border-Crossing Queue System
2014: e-residency
More start-ups per capita than in any other country in Europe
...
So this is why Estonia: Stability
Excellent economic growth numbers since joining EU and NATO Successful management of economic crisis, lowest government debt in EU
Connecting East and West Accessible – geographically, logistically and socially Communication technology makes distances in Estonia irrelevant
Ease and efficiency of doing business Ranked among top 20 in most of pertaining indices by World Bank Group Low bureacracy and corruption, advanced e-society Significant cost efficiency compared with EU average – labour, taxes, property, energy
Smart people Ranked 4th in the world in natural sciences, 11th in math studies by PISA #1 in Europe for startups per capita
Country of foreign investors Foreign investors have played a decisive role in building Estonian economy Attracting FDI not with incentives, but with favorable business environment
Great demo country to implement and test innovations!