Estonia is Baltic country with an outstanding economic freedom, a stable economy and a competitive business environment. A country with a population of 1.3 million inhabitants does not sound so big but the reality is that Finnish companies export to Estonia is approximately the same as to France or Italy. You might wonder and ask how is this possible with France and Italy being much larger markets than Estonia. However, France and Italy are perceived as distant markets whilst Estonia is in close proximity to Finland not only geographically speaking but also culturally and even linguistically.
A favourable business climate, a liberal economic policy and an ease of doing business are factors which have already attracted numerous international companies to Estonia. There are over 4,000 registered companies in Estonia that are owned by either Finnish nationals or juridical persons and this number is on the increase. Taxation is moderate and regulations are kept simple. A flat-rate income tax exists for individuals and undistributed corporate profits are tax-exempt (0%). Estonia is also recognised as a good base for start-ups. For example, Skype, a recognised global operator and now a multi-billion dollar business, was originally a start-up company based in Estonia.
Estonia prefers to brand itself as a Nordic country rather than a Baltic one because of its strong cultural and economic ties to Scandinavian countries. Finland and Sweden are Estonia’s main foreign trade partners and a great deal of foreign investment originates from these countries, too.