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!

WHAT CAN WE SOLVE FOR YOU?

kristi.tiivas@eas.ee