Doing business in Estonia: Estonia trade and export guide
Updated 12 May 2015
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This publication is available at https://www.gov.uk/government/publications/exporting-to-estonia/doing-business-in-estonia-estonia-trade-and-export-guide
Brexit
Learn about changes for UK exporters to Estonia if the UK leaves the EU without a deal.
Managing risk
Find out how UK companies can control risks when doing business in Estonia.
Export opportunities and advice
Find more export advice and explore opportunities overseas on great.gov.uk.
1. Estonia export overview
Estonia is the smallest and most northerly of the Baltic States.
Contact a Department for International Trade (DIT) Estonia export adviser for a free consultation if you’re interested in exporting to Estonia.
Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Estonia.
It is ranked 17th in the World Bank’s Ease of Doing Business index. Estonia has one of the best ratings in Transparency International’s Corruption Perceptions Index in eastern and central Europe.
Benefits for UK businesses exporting to Estonia include:
- low cost direct flights from UK to Tallinn
- western business culture with English widely spoken
- early adopter of new technologies
- open economy
- business links and knowledge of Russian and Commonwealth of Independent States (CIS) markets
Strengths of the Estonian market include:
- stable political environment
- substantial funding from European Union (EU) Structural Funds
- small market, so good starting point for new to export companies and Small and Medium Enterprises (SMEs)
- well developed infrastructure
- second highest number of start-ups per capita in the world
Read the EU’s practical guide to doing business in Europe.
2. Challenges
As a member of the EU and an old trading partner of the UK, Estonia does not present major challenges to UK companies wishing to develop trade.
3. Growth potential
3.1 Economic growth
The economy grew by 2.1% in 2014 The Organisation for Economic Co-operation and Development (OECD) estimates 2.4 % Gross Domestic Product (GDP) growth in 2015 and 3.4% in 2016.
3.2 EU structural funds
Estonia will receive EUR 4.4 billion of EU funds between 2014 and 2020.
Estonia will use the funding to develop:
- high quality and accessible education
- high quality employment
- a knowledge intensive and internationally competitive economy
- a clean and diverse natural environment
- sustainable transport and Information and Communications Technology (ICT) connections
UK companies can benefit by:
- participating in EU financed tenders
- cooperating with local partners
- applying for sector specific support via local representation
Find more information on the funding and related measures on the European Union Structural Assistance to Estonia website.
3.3 Trade agreements
Estonia is a member of the EU, the World Trade Organization (WTO) and other international bodies. Goods manufactured in the UK are exempt from import duties.
Contact the UK SOLVIT team if you have market access issues relating to the operation of the Single Market.
3.4 Gateway to Russia
Estonia serves as a gateway between Russia, the CIS and western Europe due to:
- its geographical location close to St. Petersburg
- a well developed infrastructure and logistics sector
Russia is among Estonia’s top 4 export partners. Estonian exports to Russia totalled EUR 1.2 billion in 2012.
A significant part of Estonia’s population speaks Russian.
4. UK and Estonia trade
The UK is the 10th largest exporter to Estonia. UK exports totaling EUR 444.3 million made up 3.25 % of total Estonian imports in 2014. This is slightly less than in 2013. The share has more than doubled since 2010.
Top UK exports in 2014 were:
- machinery and mechanical appliances
- food and beverages
- vehicles, aircraft, vessels
- chemicals and allied industries
- mineral products
- textiles and textile products
5. Opportunities for UK businesses in Estonia
Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.
Access high value public procurement notices via Tenders Electronic Daily (TED). TED contains all procurement notices above a certain threshold from the EU and European Economic Area (EEA).
5.1 Education
There are a range of opportunities in both general and higher education including:
- vocational education
- rural development training
- lifelong learning
- special needs and supporting counselling
- vocational youth work
- teacher training
- provision of educational materials
- marketing and other corporate training
Education institutions are gradually updating their Information Technology (IT) infrastructure. As a result there is increasing interest in:
- educational equipment
- contemporary education via software, e-programmes
Contact Trade Adviser maarika.poldes@mobile.trade.gov.uk for more information on opportunities in the education sector.
5.2 Information Communication Technology
The ICT sector is well developed with a wide range of e-services, including e-voting, e-banking, e-prescriptions, e-parking.
There are opportunities for UK businesses to cooperate with cutting edge technology companies. Products and services which are unavailable from local providers will also be of interest.
Cyber security is an opportunity area particularly within critical national infrastructure.
Both the EU Agency for large-scale IT systems and NATO’s Cooperative Cyber Defence Center of Excellence (CDD COE) are located in Estonia. There are opportunities for business via tenders.
Contact Trade Adviser laura.arengu@mobile.trade.gov.uk for more information on opportunities in the ICT sector
5.3 Energy
Plans for the construction of Liquefied Natural Gas (LNG) terminals are under way as well as a interconnector between Finland and Estonia. In addition there are several measures aiming to improve the security of supply of electricity. Another opportunity area includes several offshore wind projects in the early planning phase.
There are potential opportunities for UK energy companies in:
- construction of power bridges with western and north European countries
- development of cogeneration
- oil-shale energy production
- renewable energy
- energy efficiency projects
- refurbishment of existing power plants
Contact the Head of the Trade Team tanel.korvel@mobile.trade.gov.uk for more information on opportunities in the energy sector.
5.4 Infrastructure
Rail Baltica is an EU priority project which plans to link Finland, the Baltic States and Poland. Project opportunities include:
- consultancy
- construction
- development of railway infrastructure
- supply of rolling stock
- railway infrastructure equipment
Other transport opportunities also include road, ports and airports infrastructure.
Contact the Head of the Trade Team tanel.korvel@mobile.trade.gov.uk for more information on opportunities in the infrastructure sector.
5.5 Other opportunities
There are also opportunities for UK companies in other sectors including:
- creative and media
- chemicals
- security
- leisure and tourism
Contact UKTI.Tallinn@fco.gov.uk for more information on these opportunities.
6. Start-up considerations
British companies can approach the Estonian market in several ways including:
- direct export
- setting up an agency
- appointing a distributor
- forming a joint venture
- setting up local manufacturing
- acquisition of entire or part of Estonian company
In most cases doing business in Estonia requires local representation in the form of an agent or distributor. It is relatively easy to appoint a distributor. There are no legal barriers to agents and distributors operating for a UK company within Estonia.
You should visit the market to establish a personal relationship with the potential partner soon after the initial contact has been made. You must supply:
- product specifications
- prices
Joint venture partnerships and acquisition options are chosen by many foreign companies seeking market share. The success in this form of relationship will depend on the nature of the product/service and the level of domestic competition.
There are 6 types of business entity are provided for under the Commercial Code:
- general partnership or limited partnership
- private limited company
- public limited company
- co-operative association
- sole proprietor
A foreign company can operate using a branch office.
You can find more information on setting up a company in Estonia on the Estonian Investment Agency’s website.
7. Legal considerations
UK companies entering into agreements in Estonia should take professional legal advice.
7.1 Standards and technical regulations
Products and services must meet relevant EU safety standards. These include clear instructions on proper use and warnings against misuse.
The Estonian Centre for Standardisation is responsible for standardisation, metrology and accreditation.
There are EU standards on packaging.
All consumer goods should have a translation in Estonian attached to the packaging. This is most commonly done in the form of a post-production sticky label. Failure to do so can lead to prosecution.
Ingredients of foodstuffs and consumption instructions must be clearly stated along with the importer’s and producer’s details.
Pharmaceuticals must be approved for use by the Estonian State Agency of Medicines. They should include an Estonian, and for some medicines also Russian language, insert in the packaging.
You must obtain a license to carry out certain activities. Sectors affected include:
- mining
- public, long distance telecommunications
- retail sales of pharmaceuticals
- production of alcohol and tobacco
- gambling
- banking
- insurance
7.2 Intellectual property
Trademarks, designs, patents and copyright are the principal forms of Intellectual Property (IP) protection available to companies and individuals.
EU IP law has a major impact on local law. However law covering intellectual property is not totally harmonised within the EU. In particular patent protection is only harmonised to a certain degree.
The Estonian Patent Office gives an overview of legal protection of patents, trademarks, utility models, industrial designs, geographical indications and integrated circuits in Estonia.
8. Tax and customs considerations
You can find more information on tax rates in Estonia through the Estonian Tax Board.
8.1 Value Added Tax (VAT)
VAT is charged at 20%. Rates of 0% and 9% apply to certain goods and services.
8.2 Corporate tax
Estonian resident companies and permanent establishments of foreign entities (including branches) are subject to income tax for all distributed profits. This is taxed at 21%.
You can find further information on corporate tax from the Estonian Investment Agency.
8.3 Income tax
The income tax rate is set at 21%.
8.4 Customs
The internal market of the European Union is a single market which allows the free movement of goods and services. Therefore, no import duties apply.
Items which are for re-export should be declared as such on entry and arrangements made to store in a customs free zone if applicable.
8.5 Documentation
Commercial samples and temporary import items must be declared on the manifest and invoice as being such.
The Estonian Customs Department gives details of all relevant regulations concerning legislation, formalities, duties and tariffs in Estonia.
9. Entry requirements
British nationals do not need a visa to visit Estonia.
9.1 Travel advice
If you are travelling to Estonia for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.
10. Contacts
Contact the Department for International Trade (DIT) Team in Estonia for more information and advice on your opportunities for doing business in Estonia.