Estonia-Business Environment

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Published: 06 Oct 2008 17:51:03 PST

Standards

Domestic framework and international association: The standards of this country are optional and find their bases in the ISO standards. There are also some old standards which are not compulsory. Only spirits and construction cement are subject to compulsory standards. These are equally applicable to imported products as in the case of local products.

Legal framework

Independence of justice: Estonia (official name: Republic of Estonia) is a Republic state based on constitutional parliamentary democracy.
President is the chief of the state and is elected by parliament for a five-year term. President is the commander-in-chief of the armed forces. President nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament .
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. State Assembly is the highest organ of state authority. It initiates and approves legislation sponsored by the Prime Minister. Government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations. The judicial language in the country is Estonian; having an interpreter is always possible.
Estonia is ruled by law. Foreign nationals can expect a fair trial from the country's judicial system. Estonia has a low degree of corruption but it is still a concern especially in the corporate sector.
Equal treatment of nationals and foreigners: Estonia (official name: Republic of Estonia) is a Republic state based on constitutional parliamentary democracy.
President is the chief of the state and is elected by parliament for a five-year term. President is the commander-in-chief of the armed forces. President nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament .
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. State Assembly is the highest organ of state authority. It initiates and approves legislation sponsored by the Prime Minister. Government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations. The judicial language in the country is Estonian; having an interpreter is always possible.
Estonia is ruled by law. Foreign nationals can expect a fair trial from the country's judicial system. Estonia has a low degree of corruption but it is still a concern especially in the corporate sector.
The language of justice: Estonia (official name: Republic of Estonia) is a Republic state based on constitutional parliamentary democracy.
President is the chief of the state and is elected by parliament for a five-year term. President is the commander-in-chief of the armed forces. President nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament .
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. State Assembly is the highest organ of state authority. It initiates and approves legislation sponsored by the Prime Minister. Government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations. The judicial language in the country is Estonian; having an interpreter is always possible.
Estonia is ruled by law. Foreign nationals can expect a fair trial from the country's judicial system. Estonia has a low degree of corruption but it is still a concern especially in the corporate sector.
Having recourse to an interpreter: Estonia (official name: Republic of Estonia) is a Republic state based on constitutional parliamentary democracy.
President is the chief of the state and is elected by parliament for a five-year term. President is the commander-in-chief of the armed forces. President nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament .
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. State Assembly is the highest organ of state authority. It initiates and approves legislation sponsored by the Prime Minister. Government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations. The judicial language in the country is Estonian; having an interpreter is always possible.
Estonia is ruled by law. Foreign nationals can expect a fair trial from the country's judicial system. Estonia has a low degree of corruption but it is still a concern especially in the corporate sector.
Sources of the law and legal similarities: Estonia (official name: Republic of Estonia) is a Republic state based on constitutional parliamentary democracy.
President is the chief of the state and is elected by parliament for a five-year term. President is the commander-in-chief of the armed forces. President nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament .
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. State Assembly is the highest organ of state authority. It initiates and approves legislation sponsored by the Prime Minister. Government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations. The judicial language in the country is Estonian; having an interpreter is always possible.
Estonia is ruled by law. Foreign nationals can expect a fair trial from the country's judicial system. Estonia has a low degree of corruption but it is still a concern especially in the corporate sector.

Intellectual Property

Domestic network and international agreements: The patents office of Estonia was created on 3rd December 1991. It started functioning in 1992. Among its activities were included the implementation of laws concerning trademarks of manufactured products or business trademarks, the law concerning the copyrights of authors, laws concerning patents and finally the laws concerning utility models.
The principle of priority to the first patent applicant is applied.
Estonia is a member of the WIPO (world intellectual property organization) since 1994, and is also a member of Paris and Berne Conventions.

Texts currently applying to patents/brands

Type	Text	Date entered into law	Period of validity	Remarks
Patent	Patent Act	March 16, 1994 (last amended on October 27, 1999)	20 years	:

Tax rates

Consumption taxes

Tax rate: 18%
Reduced tax rate: Reduced rates are 0% and 5%.
A lower 5% rate applies to some books, medicines and certain supplies of heating and energy.
The 0% rate applies to exports and supplies relating to international transport.
Are exempted of VAT leasing of immovable property, services of financial and credit institutions, insurance services, and medical and educational services.
Other consumption taxes: >> To get further information on VAT rates, please check the list of vat rates applied within the European Union

>> More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate taxes

Tax rate for resident companies
Tax rate on long-term capital gains: Capital gains are subject to the general corporation rules taxing incomes when distributed.
System governing groups of companies and dividends paid by subsidiaries to their parent companies: A 24% withholding tax applies on dividends paid to non-resident corporate shareholders holding less than 25% of the capital. If they share at least 25% of the capital, 0% withholding tax is assessed.
Tax rate on branches: Branches are subject to the general corporation rules taxing incomes when distributed.

Individual taxes

Tax rate
Allowable deductions and tax credit: Many deductions are allowed, and some exemptions like certain capital gains, scholarships paid on the basis of law, fringe benefits, accommodation reimbursements for business trips, insurance contracts, compensation for the use of private vehicles, child allowances and other subsidies and compensation paid from the State.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the convention signed on the website of the Tax and Customs Board.

Sources of fiscal information

Tax Authorities: Customs Office

Accounting rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the next year.
Accounting standards: The main financial documents in Estonia are the balance sheet, the profit and loss account and the cash flow statement.
- Concerning the cash flow statement, it is necessary to take into account flows resulting from operations of investments, financial flows, liquid assets at the beginning and at the end of the accounting year and flows of any other activity.
- Each asset, liability, debt, authorized capital, liquid asset or financial results must be disclosed.
-The Estonian accounting practices are recognized internationally.
Accounting reports: The publication is rarely used in Estonia.
But since 1997, some accounts of companies are disclosed to the public.
Accountancy profession: - The Ministry of Finance.
Certification and auditing: The control of accounts is made by audits, but drafting an audit report is not necessary.