Exporting to Estonia

Estonia is a Northern European hub for industrial, supply chain and global business services. It is a world leader in information technology. Estonia is an easy place to do business and grow your business. Estonia has produced four 'unicorn' companies: Transferwise, Skype, Playtech and Taxify. For UK exporters who need local employees, Estonia has a hardworking, well-educated and skilled workforce.

Business environment

Estonia has been one of the fastest growing economies in the region due to liberalisation of the economy, innovation and openness to foreign capital. This makes it a good starting platform for small and medium enterprises. Estonia ranks highly for ease of doing business and English is widely spoken, making it easy for UK companies to work with local partners.

Growing export market

In the year to March 2019, total UK exports to Estonia amounted to £242 million (ONS, 2019). This was an increase of 17.5% from the previous year and highlights the growing market for UK exports.

Trade gateway

Estonia can serve as a gateway to the wider region due to:

  • business links with Commonwealth of Independent States (CIS) markets
  • a high level of Russian language proficiency in the local workforce
  • a strategic location making it a good springboard into markets in Scandinavia, the Baltics, Central Europe and Asia

Ease of doing business

18th

out of 190 countries (World Bank, 2020)

Currency

Euro

Business language

Estonian

English is widely spoken

GDP per capita

$23,330

UK is $41,030 (IMF, 2019)

Economic growth

4.8%

(IMF, 2019)

Time zone

UTC +2

Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in Estonia have identified particular opportunities for UK businesses in the following sectors.

Doing business in Estonia

Prepare to export

VAT

If you’re registered for VAT in the UK, it may be possible to zero-rate the goods you export to Estonia, provided certain conditions are met.

VAT is charged at 20%. Rates of 0% and 9% apply to certain goods and services.

You can find more information on tax rates in Estonia through the Estonian Tax and Customs Board.

Corporate tax

There is no corporate income tax on retained and reinvested profits.

This means that Estonian resident companies and the permanent establishments of foreign entities (including branches) are subject to 0% income tax for all reinvested and retained profits, and a 20% income tax for all distributed profits (both actual and deemed).

You can find further information on corporate tax from the Estonian Investment Agency

Customs

You are encouraged to use a customs clearance agent familiar with Estonian customs clearance formalities.

The Estonian Tax and Customs Board gives details of all relevant regulations concerning legislation, formalities, duties and tariffs in Estonia.

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 (website in Estonian) is responsible for standardisation, metrology and accreditation.

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 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

Operating in Estonia

Intellectual property

As a first step, we advise you to speak to an intellectual property lawyer if you think you need patent protection when exporting.

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 (website in Estonian) gives an overview of legal protection of patents, trademarks, utility models, industrial designs, geographical indications and integrated circuits in Estonia.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.