Services of Enterprise Estonia for exporting companies

Services
of Enterprise Estonia
for exporting companies
(EASi teenused eksportivatele ettevõtetele)
Eero Raun
Enterprise and Export Centre
at the BPW Estonia seminar
June 10, 2015 - Chamber of Commerce
» www.tradewithestonia.com
» www.eas.ee
Michel Sittow (1469-1525), painter from Tallinn
• 1492-1504 court portrait painter
for Isabelle of Castille in Toledo
(painting: Catherine of Aragon),
• 1515-1518 for Fernando II and
Carlos I in Valladolid
(painting: don Diego de Guevara)
High Position in Business Environment
Rankings
1st in International Tax
Competitiveness Index 2014 Tax
54
Foundation
Ease of Doing Business Ranking 2015
44
8th in Index of Economic
Freedom 2015 /2nd in Europe Wall
Street Journal / The Heritage Foundation 2015
32
29
6th in Trading Across Borders 2015
23 24
World Bank
17
2nd in the Internet Freedom Freedom
House 2014
29th in Global Competitiveness
Report 2015 World Economic Forum
26th in Corruption Perceptions
Index 2014 Transparency International
1
3
5 6
7
8
9
11
20
14
Source: World Bank – Doing Business 2015
Low risk –
Politically and Economically Stable
Political stability.
Risk of political instability, global rank
Estonia is seen
as the most stable country in CEE.
10
9
8
Lowest government debt in
7
Europe.
6
Government debt was 10.0%
9.07
8.39 8.13
7.48
6.54 6.49
6.07
5.49 5.31 5.24
5
in 2013 compared to 54,8% in Finland or
4
38% in Latvia for example.
3
2
1
A
balanced
and
oriented state budget
future
0
with a
growing interest in entrepreneurs and
foreign investors.
The higher the rank, the lower the risk
Source: IMD World Competitiveness Yearbook 2014
Simple and Favourable Tax System
 * 0% Corporate income tax on reinvested profits
All distributions are subject to income tax at the rate of 20%
of the amount of taxable payment
 Personal income tax: flat rate 20%. The same rate applies
for expats
 VAT: 20%
 Social tax: 33% (20% for social security and 13% for health
insurance)
 Unemployment insurance: 2,6% of the gross salary. (The
employer pays 0,8% of the salary and the employee 1,6%.)
 No property tax
Tax rate on corporate
income, 2014
ESTONIA
Lithuania
15.0%
Latvia
15.0%
Hungary
19.0%
Czech Rep
19.0%
Poland
19.0%
 The land tax is from 0,1% to 2,5% on the assessed value of
the land, rate established by local government (i.e in Tallinn
2,5%).
Sweden
 Easy administration - All the taxes can be declared via E-
Finland
tax/e-customs (an electronic service desk of the Estonian
Germany
Tax and Customs Board)
0.0% *
UK
22.0%
23.0%
24.5%
29.6%
0.0% 10.0% 20.0% 30.0% 40.0%
Source: KPMG
Information Society Indicators

100% of schools and government organizations are ICT equipped

Entire country is covered with a broadband connection

97% of businesses use computers

80% of homes have broadband connection

99,8% of bank transfers are performed electronically

95% of income tax declarations are made via the e-Tax Board

25% of votes were cast over the internet on 2013

66% of the population participated in the census via internet in 2012

More than 93% of the population has an ID-Card
Estonia is Part of the Nordic
Electricity Market

Estonia is part of Nordic electricity market and Estonian electricity
system is connected also with Russia and Latvia.

Estonian energy system is the only predominantly oil-shale-based
energy production system in the world.

The biggest energy producer in Estonia is Eesti Energia, a 100%
state-owned company.

The price of electricity consists of four components: electricity,
network service, renewable energy support and excise duty.

Electricity market is 100% open starting January 2013.
Natural Gas Market



Natural gas is imported into Estonia
from Russia and Latvia.
Estonian natural gas company is
Eesti Gaas.
Network services to all participants
of the natural gas market on the
territory of Estonia are provided by
EG Võrguteenus.
14
Gas price for industries, 2013 (EUR per GJ)
12.8
12.2 12.2
12
10
9.9
9
9.9
10.1
10.6
10.9
9.3
8
6
4

The price of gas consists of three
elements: gas, network service and
excise duty.
2
0

The price for industrial users is a
matter of negotiations.
Source: Eurostat
Labour Market and Education
System

77universities
universities(6(6public,
public,11private)
private)- -ca
ca
43,647
49,400students
students

Total labour force: 674,400

The unemployment rate: 6,3% in Dec
2014
o
General working time: 8 hours a day, 5
days per week. The duration of one shift
may not exceed 12 hours
o

Overtime is allowed by mutual agreement
o

The duration of the annual vacation: 28
days

10 Public holidays a year

The average wage in Estonia in 2014 is
EUR 1 039. The monthly minimum wage
for full-time work is EUR 390 / 2.34 €/h.

o
o
o
o
University of Tartu – 14,179 students
 University
ofTechnology
Tartu – 15,800
students
Tallinn
University of
– 12,926
students
 Tallinn University of Technology
Tallinn–University
– 9,391 students
12,900 students
Estonian
University
of Life–Sciences
– 3,905
 Tallinn
University
10,300 students
students
 Estonian University of Life Sciences –
Estonian
Academy
4,300
students of Arts – 1,102 students
 Estonian
Academy
of Arts and
– 1,130
students
Estonian
Academy
of Music
Threatre
–
702students
Estonian Business School – 1,442 students
22 other professional higher
 17
education
other professional
institutionshigher
– ca 15,400
education
students
institutions – ca 11,500 students
48 vocational schools - ca 26,200 students
 47 vocational schools - ca 25,200 students
214 gymnasiums (high schools) - ca
24,000
students
 204
gymnasiums
(high schools) - ca
23,400 students
Main Economic Indicators, 2012-2014
2012
2013
2014
GDP real growth (%)
3.2
0.8
0.5
GDP (current prices, billion EUR)
17.0
18.4
19.5
Consumer price index (%)
3.9
2.8
-0.1
624.4
621.4
624.8
Growth of labour productivity
0.7
-0.2
0.3
Unemployment rate (ILO)
10.2
8.6
6.3
Average wage (EUR)
887
948
1,039
Wage real growth (%)
1.7
4.9
6.3
Labor force (thousands)
Source: Statistics Estonia
Estonian Export by Country
Spain: 17th position, 0,9 % from total foreign trade
turnover (as of 2014)
Estonian Export by Sectors
Estonia and Spain: export and import
Estonia and Spain: foreign trade in 2014
Main articles of Estonian export to Spain in 2014:
• machinery and equipment - 66.2% (mobiles, engines and
generators)
• Wood and wood products - 6.2% (log houses)
• Other industrial products - 4.2% (rare metals – niobium etc)
• mineral products - 3.5% (peat products - fertilizers)
Main articles of import from Spain in 2014:
• prepared food and beverages - 20.5%
• machinery and equipment - by 15.1%
• textile products - 15.0%
• Vehicles, transport equipment - 10.7%
Strong in niche markets
FDI Inflow by Country and Activity
Stock as of 31.12.2014
Sweden
Finland
Netherlands
Norway
Russian
Federation
Cyprus
Denmark
Lithuania
Latvia
USA
United Kingdom
Germany
Austria
Other
26%
22%
10%
6%
6%
3%
3%
3%
3%
2%
2%
2%
2%
10%
Financial and insurance activities
Real estate activities
27%
17%
Wholesale and retail trade; repair of motor
vehicles and motorcycles
15%
Manufacturing
13%
Professional, scientific and technical activities
8%
Transport and storage
6%
Administrative and support service activities
3%
Information and communication
2%
Agriculture, forestry and fishery
2%
Electricity, gas, steam and air conditioning supply 2%
Other
5%
2014: Spanish FDI to Estonia: 23 mio € (0,2% from all FDI to Estonia),
2014: Estonian FDI to Spain: 72 mio € (1,4% from all FDI from Estonia)
Source: Bank of Estonia (27.03.2015)
Estonian business support organizations
• Enterprise Estonia -
EAS.ee
• Estonian Development Fund -
Arengufond.ee
• Kredex (state financial institution)
Kredex.ee
• Agricultural Registers and Information Board -
PRIA.ee
• Rural Development Foundation -
MES.ee
• Environmental Investment Center -
KIK.ee
• Ministry of Foreign Affairs
MFA.ee
Enterprise Estonia
• 280 employees
• 2014 budget €70 million
Enterprise Estonia promotes
business and regional policy
in Estonia
Development of:
• new enterprises
• tourism
• regions and society
• production and export
• foreign direct investments
Representations of Enterprise Estonia
•
•
•
•
•
•
•
•
Tallinn, Estonia
Silicon Valley, USA
Helsinki, Finland
Stockholm, Sweden
Oslo, Norway
Rotterdam, Netherlands
London, UK
Munich, Hamburg,
Germany
•
•
•
•
•
Tokyo, Japan
Shanghai, China
Moscow, St Petersburg, Russia
Copenhagen, Denmark
Paris, France
- 15 offices, 12 countries
- A global network of partners
and service providers
Incentive programmes until 2015
Enterprise Estonia offers enterpreneurs
monetary subsidies, consultations,
cooperation and training programmes
Incentive schemes for entrepreneurs include:
 Incentives for start-up enterprises
 Incentives for development of enterprises
 Support and development of clusters and incubators
 Support for export marketing
 Innovation and product development grants
 Technology investment grants for high-impact industrial investors and
subcontractors
Export objectives
Increased export volume
+
Higher value added
+
More better paid jobs
=
Increased tax revenue for state, i.e. better living standard
What are the main issues?
• Lack of knowledge about exporting and
export markets
• Lack of access to business opportunities
abroad
• Lack of business contacts at export
markets
How we assist?
Export training
and info
Business
opportunities
Export
consultancy
Trainings and info
•
•
•
•
•
Sector and country reviews
Market seminars
Electronic ‘Export Handbook’
Trainings (different aspects of exporting)
Distance learning program for Export
Managers
Business opportunities
•
•
•
•
Portal www.tradewithestonia.com
Sourcing
Trade missions (for Estonian companies)
National Joint Stands and International
Exhibitions (10-15 fairs in a year)
Mobile World
Congress
Feb 2014
Barcelona
Garry Kasparov in MWC 2014
Estonia at Smart City EXPO Nov 2015, 2016
Export consultancy of foreign advisors
• Initial consultancy on market entry
• Contact search (database)
• Export Partner Search (to find dealer, end
customer, representative, importer etc)
• Export Bulldozer program
• Events support
Geographic strategy
Key markets - top export destination markets
+ markets with good potential (ca 10). We
deliver our own services with own staff.
Second tier – markets further away, where
we as a state want companies to export to
(ca 15-20). We deliver services through
partners.
Business Ambassador Network – rest of the
World. Voluntary and free of charge ‘door
opening’ to far away markets
Business
Ambassador
Network
Second tier
markets
Key export
markets
e-resident.gov.ee
e-Residents can:
• Digitally sign documents and contracts
• Verify the authenticity of signed documents
• Encrypt and transmit documents securely
• Administer the company from anywhere in the world.
• Conduct e-banking and remote money transfers.
Establish an Estonian company online within a day.
• Access online payment service providers
• Declare Estonian taxes online
• e-Residency does not confer citizenship,
• tax residency, residence or right of entry to Estonia or to the
European Union. The e-Resident smart ID card is not a
physical identification or a travel document, and does not
display a photo.
What can we do together?
•
•
•
•
•
•
Increasing interaction (e.g. BPW, Chambers of Commerce)
Establishing contact points (honorary consuls)
Political delegations accompanied by business delegations
Separate business delegations
Trade missions and contact visits
Sourcing - pass on information on companies who want to
buy something from Estonia
• Investments with export potential – new knowledge and skills
• Exhibitions and country promotion events
Muchas gracias!
Eero Raun
Phone:
+372 6279 339
E-mail:
eero.raun@eas.ee
Skype:
eero.raun