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Investment guide
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Tariffs of Electricity, Gas, Water and Sewage
The price of electricity depends on the time of consumption (there are daytime tariffs and nighttime tariffs) and on the chosen price package. Detailed information is available on the website of the Estonian national energy company Eesti Energia.
Electricity tariffs: http://www.energia.ee/index.php?id=1793&L=1
Natural gas is provided by AS Eesti Gaas. In 2007 Eesti Gaas sold 810 793 million cubic meters of gas, which was 2% more than in 2006. The owners of the company are Gazprom, Ruhrgas, Fortum and Itera Latvija.
Price of natural gas: http://www.gaas.ee/index.php?page=100&
Water and sewage tariffs in Tallinn: http://9011762.la01.neti.ee/?op=body&id=159
The tariffs of fresh water and sewage services vary considerably between cities.
Fixed line Communications
Since 1. January 2001 the Estonian telecommunications market is completely open to competition. The dominant company in the fixed telephone services market is AS Elion Ettevõtted which belongs to the TeliaSonera group. Tele2, Elisa and Starman are the other players on the market.
Mobile Phone Communications
There are four operators on the Estonian mobile communications market: AS EMT which began operations in 1991 and belongs to the TeliaSonera group, Elisa, which began operations in 1995 and belongs to Elisa Communications, Tele2, owned by Tele2 AB, which has operated since 1997 and Bravocom operating since November 2004. For information on rates and service packages, please view the websites of these companies.
Data Communications
The data communications market has always been open for competition in Estonia and different companies offer their services. The most wellknown are Elion Ettevõtted, Tele 2, Microlink, Elisa and Starman.
A wide range of services such as ADSL, HSDPA, WiMax, WiFi dial-up, ISDN, are offered. Rapid changes and tight competition on the data communication market influence the price policies. Prices on data communication are very variable, depending on market situation and concrete needs of clients. For specific information on data communication companies, please visit the respective websites of the companies listed above.
More information about Operating Costs
Eesti Energia: http://www.energia.ee/index.php?id=187&L=1
Eesti Gaas: http://www.gaas.ee/index.php?page=
Tallinn Water: http://www.tallinnavesi.ee/?setlang=eng
Elion Ettevõtted: http://www.elion.ee/wwwmain?screenId=html.main&locale=en
Eesti Telekom: http://www.telekom.ee/index.php?lang=eng
EMT: http://www.emt.ee/wwwmain?screenId=mainpage.private&language=ENG
Elisa: http://www.elisa.ee
Tele2: http://www.tele2.ee/
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Last Updated on Friday, 06 March 2009 16:24 |
FDI into Estonia »
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Due to its favourable economic and geographical position, Estonia has become a transit gateway for east-west as well as north-south trade. Its location is ideal for the creation of efficient transportation links and distribution chains of goods and services for companies in Europe and in other parts of the world.
In 2007 Estonian transport enterprises carried 105,8 million tons of goods (92,6 million in 2006), of which 62,4% by railway (66,1), 36,1% by road (38,2) and 1,5% by sea (1,6).
Road Network
The Estonian road network is comparable to that of the Nordic countries in terms of its density and quality. The infrastructure along the main highways has improved fast as modern gas stations and better roads have been built. The major road transport passages through the country are Tallinn-Narva (Russian border), Tallinn-Tartu-Russian border and Tallinn-Pärnu-Latvian border.
In the beginning of 2008 the total length of the Estonian roads is 57,565, out of which 16 465 km is national roads. 55% of the national roads are paved. The volume of goods carried by Estonian road transport companies was 38,2 million tons in 2007 compared to 30,3 million tons in 2006 and 27.4 million tons in 2005.
Rail System
The total length of the Estonian railway lines in is 1200 km. 133 km is electrified. All bigger towns and centres are united through the railway network, which covers the whole mainland part of Estonia. This creates good prerequisites for the development both for passenger and freight transport on railway. So far, the percentage of the passenger transport by railway has been relatively small, but in the past few years it has shown some stable tendency of growth.
One of the shortest and best developed transit corridors uniting CIS countries and Europe passes through Estonia. Together with ports, railway comprises an important infrastructure for the Estonian economy. The main part of the goods' volume transported on the railway is transit goods that are transported from Russia to the Western countries. In international goods transportation, railway dominates with 79%, followed by road transport with 17% and sea transport with 4%.
During 1995-2003, the amount of goods carried by railway constantly increased, from 41.2 million tons in 1995 to 72.2 million tons in 2003. In 2004, the amount of freight carried decreased to 65.6 million tons, increased again to 68.2 million tons in 2005, fell back to 61,3 million tons in 2006 and increased again to 66,1 tons in 2007. In recent years petroleum products have trended lower among rail-transported goods, but instead, the amount of coal transported has increased. The amounts of transports of these products are very dependent on investment projects implemented in Russia.
Freight carried by railway, 2000 - 2007 (million tons)
Statistics Estonia
The major freight railway operator is the state enterprise Eesti Raudtee (Estonian Railways), formed in 1992. Given its good relations with Estonian ports, neighbouring railways and international expediting companies, Eesti Raudtee is able to offer services, which are fast and secure by European standards. Private freight transporters in Estonia are AS Spacecom and Westgate Transport OÜ.
In passenger transportation the operators are AS Elektriraudetee and Edelaraudtee Ltd . The Tallinn-St Petersburg-Moscow line is operated by Go Rail.
Sea Transport
There are 64 ports along the coast of Estonia, 31 of them handle commercial shipping and are open to vessels from other countries. Port of Tallinn is one of the fastest developing ports in the Baltic Sea and an authority managing five harbours:
- Muuga Harbour - main oil, dry bulk and container port in Estonia, max depth 18m, ice-free
- Old City Harbour - main passenger port in Estonia, max depth 10.7m
- Paldiski South Harbour - scrap metal, timber and roro port, max depth 13,5m
- Paljassaare Harbour - timber, oil, coal max depth 9m
- Saaremaa Harbour - passenger port, max depth 10m
Other Estonian seaports are Kunda (timber, cement), Sillamäe (timber, metals, oil products), AS Pärnu Sadam (timber, peat) and Paldiski Põhjasadam (timber, vehicles, containers).
Passenger traffic from Estonia to Finland to Finland, Sweden and Germany is organised by several companies and the amount of connections per day is increasing year by year.
The vessel traffic through Estonian ports has decreased a little during past years. In 2007, 14 443 vessels came from abroad to Estonian ports (15 240 in 2006). 8 817 (9 632) of these were passenger vessels. 44,7 (49,7) million tons of goods were transported through ports; the amount has increased more than three times since 1995. Of the total volume in 2007, oil products accounted for 55,0%.
Transport of goods through ports 2000 - 2007 (million tons)
Statistics Estonia
Air Transport
Tallinn International Airport, renovated in 1999 is open to international and domestic flights. International air links with most Scandinavian and European cities have been established. International flight companies such as SAS, Finnair, Lufthansa, EasyJet, etc are operating through Tallinn Airport. The Estonian national flight company Estonian Air operates four Boeing 737-500 and two Boeing 737-300. In 2007, Tallinn Airport handled 1,73 million passengers (+12,1% to last year) and 22 764 tons of cargo (+119,7%).
It is possible to fly from Tallinn directly to 27 destinations. Estonian Air Cargo represents big European air cargo companies like Air France Cargo and Finnair Cargo. Direct flights by order from Tallinn to Norway, Denmark, England, France, Hungary, the Czech Republic, the Slovak Republic, Germany, Austria, the CIS countries, North Africa and other countries are offered by small private air companies.
More Information about Transportation
Estonian Road Administration: http://www.mnt.ee/atp/?keel=en
Estonian Railway: http://www.evr.ee/?lang=en
Edelaraudtee: http://www.edel.ee/?lang=3
Port of Tallinn: http://www.portoftallinn.com/
Tallinn Airport: http://www.tallinn-airport.ee/index.php?intro_eng=true
Estonian Air: http://www.estonian-air.ee/index.php?lang=ENG |
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Last Updated on Friday, 06 March 2009 16:20 |
FDI into Estonia »
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Development
Significant developments have taken place in Estonia in terms of elecommunication infrastructure, leading Estonia to be one of the most advanced of the CEE countries.
Key points in IT & Telecom development in Estonia:
- Data exchange layer X-Road - secure access to nearly all Estonian national databases
- e-Tax Board - Income Tax Statements can be filled out via Internet (since Spring 2001)
- 69% of population are using Internet and 86% Internet banking (Spring 2008)
- e-elections (local 2005, national 2007)
- the Government is using web-based document system (since August 2000)
- all Estonian schools are connected to the Internet, as a result of state-run "Tiger Leap" program
- over 800 Public Internet Access Points
- there are 1169 free wireless Internet zones around the country (Spring 2008)
- e-billing (July 2000)
- mobile parking project (July 1, 2000)
- world`s first MPS project for society (May 3, 2000)
- digital Signature Act came into force (December 2000)
- IT College (September 2000)
- ID card - new primary domestic identification document (January 2002)
- Look @ World project - the % of Internet users in Estonia should increase to over 90% (2001)
- e-school
- ID ticket in the public transport of Tallinn and Tartu
Telephone and mobile communication
The Estonian telecommunications industry is led by Eesti Telekom, owned by TeliaSonera. In 2001 new service providers entered the market for fixed telephone services. Tele2 and Elisa began offering international and domestic calls. The number of main lines per 100 inhabitants has grew from 23.2 in 1993 to 37 in 2007.
The Estonian mobile communications market is dominated by four operators: EMT (1991, belongs to Eesti Telekom), Elisa (1994, belongs to Elisa Communications), Tele2 (owner Tele2 AB) and Bravocom.
Mobile phone subscriptions per 100 inhabitants, 2007
Source: International Telecommunication Union
Internet and data communications
Significant investments have been made into the telecommunications infrastructure. Fibre optic cables cover the whole country, direct undersea connections to Sweden and Finland and links to the neighbouring Russia and Latvia guarantee first-class international communications.
The share of Internet-users is already high in relation to the population of Estonia and in comparison to other EU countries. Estonia leads the way among the Baltic States in Internet usage and today some 70% of the population uses the Internet.
Internet users per 100 inhabitants, 2007
Source: International Telecommunication Union
Internet banking services have experienced a rapid growth. By May 2008 there were 1,54 million Internet bank client accounts in Estonia (population 1,34 million inhabitants). Internet banking has become a common channel through which a citizen performs cash transfers, pays taxes, pays for services, communicates with the tax board, etc.
A wide range of Internet services such as dial-up, ISDN, ADSL, WiFi, Wi-Max, HSDPA are offered on the market.
For specific information on data communication and computer companies, please visit: http://catalog.www.ee/en/content/563/%C3%84ri/Arvutifirmad/
More information about IT & Telecommunications
Eesti Telekom: http://www.telekom.ee/index.php?lang=eng
Elion Ettevõtted: http://www.elion.ee/wwwmain?locale=en
Elisa: http://www.elisa.ee/
EMT: www.emt.ee/wwwmain?screenId=mainpage.private&language=ENG
Tele2: http://www.tele2.ee/
Estonain IT College: http://www.itcollege.ee/?url=overview
The Association of Estonian Information Technology and Telecommunications Companies: http://www.itl.ee/?op=body&id=1 |
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Last Updated on Friday, 06 March 2009 16:13 |
FDI into Estonia »
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Purchase of Property by Foreign Citizens or Foreign Companies
Foreign citizens and foreign companies may purchase any property (apartments, houses or buildings) without restrictions. Foreign companies and individuals also have the first option to buying the land under the buildings they have acquired.
There are no particular restrictions for Estonian citizens and citizens of the countries belonging to European Economic Area - EEA (EU countries + Norway, Iceland, Liechtenstein) in purchasing land up to 10 hectares.
Concerning land plots larger than 10 ha, the ownership can be transferred to a foreign citizen or a foreign company with permission from the County Governor at the location of the plot of land. When purchasing larger areas of forest and agricultural land the company must be registered in Commercial Register and must have been active in areas of forestry or manufacturing of agricultural products for at least the past three years.
There are some restrictions on foreigners regarding purchases of land on small islands (i.e. islands other than Saaremaa, Hiiumaa, Vormsi and Muhu).
Prices of Industrial Land Plots
In the Tallinn area industrial land prices range in huge intervals. In the central city area, close to main roads prices reach up to EUR 125 per m2. However a few kilometres away, and less favourably located, prices fall to EUR 10 per m2.
Office, Retail and Industrial Premises
There are no restrictions for the lease of buildings and rooms. Nor are there any procedural peculiarities. Costs for electricity, heating etc are normally excluded from rent and have to be paid by the lessee.
Indicative range for rents in major towns of Estonia, class A premises (EUR/m2 per month)
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Type of Space
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Tallinn
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Tartu
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Pärnu
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Narva
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Office
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11,5 - 17,5
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9,5 - 11,5
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7,5 - 16
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7,5- 9,5
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Retail
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13 - 50
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7,5 - 60
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5,5 - 20
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9,5 - 25
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Industrial
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4,5 - 6,5
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5 - 6,5
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3 - 4
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4 - 5
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Source: Arco Vara
Indicative costs for construction of new storage or industrial facility ranges between EUR 500 and 800 per m2 (excluding land cost).
Property Taxes, Fees, Charges
Property taxes are relatively low, and are likely to remain so. In Estonia the land tax is the only real property tax; buildings and forests are not taxed separately.
Land tax is based on the market value of land and ranges between 0.1 to 2.5 percent of market value of land annually (0.1 to 2.0 for arable land and natural grassland). Factors that affect the market value are location, land use and environmental characteristics. Landowners or in some cases land users (Local Government or state property) must pay Land tax.
Commissions, charged by real estate companies vary in line with different objects (flats and apartments about 5%). Rent commissions amount to between 1 and 2 month's rent.
The notary fee is paid to a public notary for legal and technical services connected to a real estate transaction. The fee is based on the value of the transaction, which is the price of property or rights declared by the transaction party. In case of a bilateral transaction (e.g. purchase-sale) the double full fee is used. Price examples:
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Transaction Value, EUR
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Notary Fee, EUR
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3,195
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22
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6,390
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25
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31,949
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55
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63,897
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103
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638,977
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958
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3,195,582
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3,771
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exclusive of VAT
In addition, when registering into Land Register, the state duty is applicable.
Property maintenance costs depend on the amortisation level of the building and quality of the services provided. Maintenance costs such as water, sewage, insurance, electricity, heating and security range between 2 - 5 EUR/m2 per month for commercial space and 1,3 - 1,6 EUR/m2 for industrial and storage facilities.
Industrial Parks
The recent trend in industrial property market are industrial parks. There is less and less manufacturing industry in the central parts of Tallinn, companies and factories are moving to more suitable locations in the outskirts of the city or even farther.
Tallinn and its immediate vicinity have three areas under development for manufacturing facilities and warehouses: Peterburi road, Pärnu road in Laagri and Tartu road between the city boundary and Jüri. The biggest industrial parks in and around Tallinn are Jüri Industrial Park, Tänassilma Technological Village, Dvigatel Industrial Park, Keila Industrial Park and Lasnamäe Industrial Park. The total areas of the parks vary from 30 to 85 hectares and companies can purchase grounds with areas from 2000 up to 30 000 square meters with purchase price around 80 - 100 EUR per square meter.
Also in other parts of Estonia, around major cities, industrial parks are being developed.
More Information on the Real Estate Market
Real estate agents:
Arco Vara: http://www.arcovara.ee/?id=207
Kinnisvaraekspert: http://www.bpe.ee/?lang=4
Ober Haus: http://www.ober-haus.com/pages.php/01
Uus Maa: http://www.uusmaa.ee
Kapitali Grupp: http://www.kapitaligrupp.ee/index.php?language=3
Real estate developers:
SRV: http://www.srv.ee/eng/projects.html
Arco Vara: http://www.arcovara.ee/?id=207
Skanska: http://www.skanska.ee/Eng/
YIT: http://english.yit.ee/
Merko: http://www.merko.ee/eng
Facio Ehituse AS: http://www.facio.ee/
NCC: http://www.ncc.ee/
Industrial parks:
Port of Tallinn Industrial Parks: http://estate.portoftallinn.com/eng/
Jüri Industrial Park: http://www.kodugrupp.ee/?language=3
Tallinn Industrial Park: http://www.tallinnatehnopark.ee/eng/
Tänassilma Technological Village: http://www.tehnopark.ee/english/location.html
Mõigu Industrial Park: http://www.moigutehnopark.ee/en/
American Corner Business Park: http://www.americancorner.ee/eng/
Tabasalu Industrial Park: http://www.karumaa.ee/_new/
Keila Industrial Park: http://www.harjuelekter.ee/index.php?page=3&
Paldiski Industrial Park: http://www.paldiskitehnopark.ee/
NordShore Corporate Park: http://kelticglobal.ee/
Lasnamäe Industrial Park: http://www.ltp.ee/eng.html
Rae Industrial Park: http://www.merko.ee/raetehnopark/
Silikaadi Industrial Park: http://uusmaa.edge.ee/silikaadi/
Tartu Science Park: http://www.teaduspark.ee/?q=/eng
Sillamäe Free Zone: http://www.silport.ee
Pärnu Production Park: http://www.idakinnisvara.ee/ppp/eng.php
Ida-Viru Industrial Areas: http://www.ivia.ee/index_eng.php?nid=45&pid=2
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Last Updated on Friday, 06 March 2009 16:04 |
FDI into Estonia »
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The Estonian labour market experienced significant change in the 1990's. The reason, on one hand, was economic restructuring which created new types of employment. On the other hand there were significant demographic changes.
Labour market dynamics
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2004
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2005
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2006
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2007
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Total labour force (thous)
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659,1
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659,6
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686,8
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687,4
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Employed (thous)
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595,5
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607,4
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646,3
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655,3
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Employment rate (%)
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56,8
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57,9
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61,6
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62,6
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Unemployed (thous)
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63,6
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52,2
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40,5
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32,0
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Unemployment rate (%)
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9,7
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7,9
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5,9
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4,7
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Economically inactive (thous)
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388,7
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389,0
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362,3
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359,0
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Source: Statistics Estonia
In 2006 and 2007 the demand for labour grew rapidly, resulting in falling unemployment and a return to the labour market by persons formerly non-active. The number of employed people increased in 2006 as much as 6,4% compared to 2005 and in 2007 1,3% compared to 2006. Unemployment fell from 7,9% in 2005 to 4,7% in 2007. Depending on methods of measurement however, the unemployment rate could be estimated at an even lower level.
Labour Legislation
The most important statues and rules regulating the activities in the labour market are the Constitution of Estonia, Conventions of International Organization of Labour, Employment Contracts Act, Holidays Act, Wages Act, The Working and Rest Time Act, Collective Agreements Act, Trade Unions Act and several enactments of the Government and ministries of Estonia.
A work contract is required to include some specific terms, in the absence of which, the contract is defective.
The following terms are mandatory:
- work and its level of complexity, official or professional title and qualification requirements;
- working hours, wage and the place of work;
- period of the contract's validity and the time for commencing the job (as a rule, a contract is concluded for an open-ended period). An oral employment contract may be entered into only for employment for a term of less than two weeks.
A contract is considered to be expired on the agreement between the parties on the following grounds:
- end of the contract period;
- the initiative of the employee;
- the initiative of the employer;
- demands on third parties and conditions not depending on the parties involved.
The notice of a contract termination by either party should be presented in writing, unless agreed otherwise.
Working Time and Vacation
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The length of a working week
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5 days
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The length of a working day
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8 hours
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General vacation
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28 days
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Age of retirement (for both men and women)
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63 years
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Maternity leave - altogether 140 calendar days before and after childbirth. After that during the period of 15 months, mother receives from the state her last years' average wage to the extent of 100%. The right to childcare vacation remains until the child is three years old.
Sickness - in case of sickness, the employee can be given up to 182 calendar days of paid vacation (max 250 days per year). The gross wage during this period is 60% (at hospital care) or 80% (not hospital care) of her/his last years` average salary, paid by the state.
Payment for overtime - additional remuneration of per hour of overtime paid to an employee shall not be less than 50% of the rate of hourly wage. Work during holidays could be compensated either by offering time off or by extra remuneration of at least 50% of wage rate. Work on public holidays has to be compensated at a double rate.
Social tax is paid by employers operating within the territory of Estonia on all payments in cash and in any kind made to individuals at a rate of 33% of total payments.
Unemployment insurance is 0.9% of the wage. Employer pays 0.3% of the wage and deduction from employees wage is 0.6%.
Unemployment benefit - those who are out of work are eligible to receive an unemployment benefit, as of 1 January 2007 a minimum of EEK 1 000 (EUR 64 per month) for a period of six months provided they have registered themselves with the Unemployment Office.
Wages
The minimum wage in Estonia is EUR 230 per month. In 2007 the average monthly gross salary was EUR 720. The highest gross salaries are paid in the financial intermediation sector, and the lowest in the hotels and restaurants sector.
Average monthly gross salary by economic activity, 3rd quarter 2008 (EUR)
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Economic activity
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Average salary
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Financial intermediation
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1 320
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Public administration and defence
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1 015
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Mining and quarrying
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965
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Electricity, gas and water supply
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955
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Construction
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927
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Real estate, renting and business activities
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890
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Transport, storage and communication
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865
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Forestry
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764
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Manufacturing
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758
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Source: Statistics Estonia
More Information about the Labour Market
Statistics Estonia: http://www.stat.ee/
Estonian Labour Market Board: http://www.tta.ee/index.php?t=2
Ministry of Social Affairs: http://www.sm.ee/index.php?id=1&L=1
Estonian Legal Language Centre: http://www.legaltext.ee/indexen.htm |
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Last Updated on Friday, 06 March 2009 16:42 |
FDI into Estonia »
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