Employing in the Estonia

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Expanding into
Estonia

Global expansion is a step to make for any business, regardless of what you wish to achieve, but the opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all of the registration procedures that needs to be done and documentation required.

Tallinn city, Estonia. Snow on trees in winter.

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Expanding into Estonia – which is characterised by a talented and highly-skilled workforce, inviting employment and tax laws, a robust infrastructure network, and leading sectors in energy, industry, services, construction, tourism, and technology – can bring excitement to the possibilities but also significant stress to ensuring the entity with the country’s legal structures and laws.

Going at it without the proper support can increase the costs, time and risks involved. This can be worked through more efficiently and cost-effectively with the help of a Professional Employer Organisation (PEO) such as Bradford Jacobs, primarily through our Employer of Record (EOR) framework.

It can be best utilised when businesses are just beginning their expansion process and require more information before incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Estonia

Learn all about expanding into Estonia and see what we can do to make your expansion easier.

Download our Guide to Estonia

Learn all about expanding into Estonia and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Estonia

Hiring Staff
in Estonia

The Main Sectors of the Estonian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

The industry sector in Estonia deals in the production of chemical products, textiles, machinery, equipment, electronics, oil shale energy, and timber. Shipbuilding is also part of the industry sector in Estonia. The companies in the shipbuilding sector engage in the manufacture of boats and ships, which are used for recreational and commercial purposes. The industry contributes over 20% of the country’s GDP.
The Banking services in Estonia are modern and efficient. The sector also boasts of having one of the region’s best-regulated banks and a highly advanced internet banking system. There are seven banking companies registered to operate in Estonia. The rest of the banks are branches of banks located in Sweden and Denmark, with 90% of the banks operating in Estonia under Scandinavian ownership. The banks are very well capitalized, meaning that the customers’ monies are well protected and that there are minimal bankruptcy risks.
Estonia has produced from oil shale on an industrial scale since the 1930s and today remains a leader in the field. A sizeable proportion of production is exported to the regional Nord Pool market, and world-class expertise exists in processes and technologies which improve efficiency and reduce environmental impact. Estonia is also committed to sustainable consumption. In 2013 Estonia implemented the world’s first nationwide electric vehicle network in collaboration with ABB. Today, gas is commonly used to power transportation, and Estonia is a leading proponent of the Circular economy, recycling by-products from oil shale mining in construction.

Sustainable energy capacity is growing year-on-year in Estonia across various segments, including waste-to-energy, solar, wind, and biomass. Estonia’s state energy strategy requires renewables to produce most electricity and heat by 2030, enabled through public and private sector investment in capacity and connectivity.

The telecommunications sector in Estonia has attracted substantial foreign investments, especially from Nordic countries that have invested in high technology and communication networks. Estonia telecommunications are the most developed in Eastern and Central Europe. The country’s broadband DSL access is the leading among the countries located in Eastern Europe. Estonia has over 1,006 free Wi-Fi zones and an extensive network of mobile phone networks.
The services sector in Estonia is the largest industry in terms of its contribution to the country’s GDP. It mainly consists of transportation, telecommunications, and banking sub-sectors. The transportation sector comprises favourable infrastructure that has improved trading operations in Estonia.

The Main Sectors of the Estonian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Beautiful flowers in the middle of Tallinns old town, Estonia.
The industry sector in Estonia deals in the production of chemical products, textiles, machinery, equipment, electronics, oil shale energy, and timber. Shipbuilding is also part of the industry sector in Estonia. The companies in the shipbuilding sector engage in the manufacture of boats and ships, which are used for recreational and commercial purposes. The industry contributes over 20% of the country’s GDP.
The Banking services in Estonia are modern and efficient. The sector also boasts of having one of the region’s best-regulated banks and a highly advanced internet banking system. There are seven banking companies registered to operate in Estonia. The rest of the banks are branches of banks located in Sweden and Denmark, with 90% of the banks operating in Estonia under Scandinavian ownership. The banks are very well capitalized, meaning that the customers’ monies are well protected and that there are minimal bankruptcy risks.
Estonia has produced from oil shale on an industrial scale since the 1930s and today remains a leader in the field. A sizeable proportion of production is exported to the regional Nord Pool market, and world-class expertise exists in processes and technologies which improve efficiency and reduce environmental impact. Estonia is also committed to sustainable consumption. In 2013 Estonia implemented the world’s first nationwide electric vehicle network in collaboration with ABB. Today, gas is commonly used to power transportation, and Estonia is a leading proponent of the Circular economy, recycling by-products from oil shale mining in construction.

Sustainable energy capacity is growing year-on-year in Estonia across various segments, including waste-to-energy, solar, wind, and biomass. Estonia’s state energy strategy requires renewables to produce most electricity and heat by 2030, enabled through public and private sector investment in capacity and connectivity.

The telecommunications sector in Estonia has attracted substantial foreign investments, especially from Nordic countries that have invested in high technology and communication networks. Estonia telecommunications are the most developed in Eastern and Central Europe. The country’s broadband DSL access is the leading among the countries located in Eastern Europe. Estonia has over 1,006 free Wi-Fi zones and an extensive network of mobile phone networks.
The services sector in Estonia is the largest industry in terms of its contribution to the country’s GDP. It mainly consists of transportation, telecommunications, and banking sub-sectors. The transportation sector comprises favourable infrastructure that has improved trading operations in Estonia.

Commercial Laws in
Estonia

All employees engaged in Estonia will be covered by the Employment Contracts Act, the Law of Obligations Act and a host of supplementary legislation covering all aspects of entitlements, benefits, and compensation.

General requirements

  • Contracts should be in writing if employment is for more than 14 days, although there is no strict legal requirement for written contracts. However, the absence of a written contract does not invalidate any agreement between the parties.
  • A written contract should be given to the employee before they start work
  • Contracts can be for a fixed or unspecified term and also cover probation periods, which can be up to a maximum of four months
  • Contracts must include identities and full details of all parties; start date of employment and, in the case of a fixed-term contract, the end date; job description and location; terms of employment such as salary, working hours, paid vacations; notice periods and termination/ severance terms; and whether collective agreements apply
  • Employers and employees are free to negotiate the terms of their agreement, but these cannot be for less than any statutory minimums.

Tax Authorities

The Tax and Customs Board – also known by its acronym MTA, is the taxation authority in the Republic of Estonia. It is an agency of the Ministry of Finance.

The agency deals with the collection of revenue for the state budget, the implementation of tax laws, customs rules and related legislation, enforcement, licensing gambling companies and lottery organizations, supervision and inspection of gambling and lotteries, and provision of service to citizens and e-residents to aid in the fulfilment of tax liability and customs procedures.

Labour Authorities

The Labour Inspectorate – a government agency operating within the Ministry of Social Affairs responsible for enforcing labour legislation. The Labour Inspectorate is divided into four departments Work Environment, Labour Relations, Communications, Finance and Administration Department.

The Work Environment Department is responsible for occupational health and safety issues, and the Labour Relations Department is responsible for inspections in the area of labour relations.

Commercial Laws in
Estonia

Amazing aerial drone shot of old town of Tallinn, Estonia at sunset

All employees engaged in Estonia will be covered by the Employment Contracts Act, the Law of Obligations Act and a host of supplementary legislation covering all aspects of entitlements, benefits, and compensation.

General requirements

  • Contracts should be in writing if employment is for more than 14 days, although there is no strict legal requirement for written contracts. However, the absence of a written contract does not invalidate any agreement between the parties.
  • A written contract should be given to the employee before they start work
  • Contracts can be for a fixed or unspecified term and also cover probation periods, which can be up to a maximum of four months
  • Contracts must include identities and full details of all parties; start date of employment and, in the case of a fixed-term contract, the end date; job description and location; terms of employment such as salary, working hours, paid vacations; notice periods and termination/ severance terms; and whether collective agreements apply
  • Employers and employees are free to negotiate the terms of their agreement, but these cannot be for less than any statutory minimums.

Tax Authorities

The Tax and Customs Board – also known by its acronym MTA, is the taxation authority in the Republic of Estonia. It is an agency of the Ministry of Finance.

The agency deals with the collection of revenue for the state budget, the implementation of tax laws, customs rules and related legislation, enforcement, licensing gambling companies and lottery organizations, supervision and inspection of gambling and lotteries, and provision of service to citizens and e-residents to aid in the fulfilment of tax liability and customs procedures.

Labour Authorities

The Labour Inspectorate – a government agency operating within the Ministry of Social Affairs responsible for enforcing labour legislation. The Labour Inspectorate is divided into four departments Work Environment, Labour Relations, Communications, Finance and Administration Department.

The Work Environment Department is responsible for occupational health and safety issues, and the Labour Relations Department is responsible for inspections in the area of labour relations.

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