Official name: Republic of Estonia
Head of State: President
Government: Parliamentary Republic, single chamber Parliament(Riigikogu) of 101 members
Currency: Eesti Kroon (EEK); 1 kroon = 100 sents.Pegged to euro under currency board arrangement at rate 1 EUR = 15.6466 EUR
National Day: Independence Day, February 24th

Capital: Tallinn (397,000)
Other cities: Tartu (101,000), Narva (68,000), Kohtla-Järve (59,000), Pärnu (45,000)
Estonia is devided into 15 counties, 202 rural municipalities and 39 towns

Area: 45 227 square km
Distance from Tallinn: Helsinki 85 km, Riga 307 km, St Petersburg 395 km, Stockholm 405 km, Vilnius 605 km
Flight times: Helsinki 35 min, Stockholm 1 h, Copenhagen 1 h 30 min, Moskow 1 h 40 min, Amsterdam 2 h 20 min, London 2 h 45 min
Time Zone: GMT + 2 hours

Average Temperartures: 6 C (February), +17 C (July)
Major Natural Resources: Timber, oil shale, phosphorite, peat, limestone, dolomite

Population: 1.37 million; in towns 70%, in rural municipalities 30%
Employed: 585.5 thousand
Ethnic groups: Estonians 67.9%, Russians 25.6%, Ukrainians 2.1%
Language: Estonian. Other languages such as English, Russian and Finnish are also widely spoken
Main Religion: Lutheran

Economy 2003 GDP per capita: EUR 5,465 GDP growth: 4.7% FDI stock: EUR 5.16 billion FDI into Estonia: EUR 797 million Exports: EUR 4 billion Imports: EUR 5.7 billion Inflation (CPI): 1.3% Unemployment rate: 10.0% Average monthly gross wages: EUR 429

Estonia offers foreign companies an ideal entrance to the large and fast-growing markets of the Baltic Sea Region. Open economy, excellent transportation links and central location make it an ideal base for production and distribution with all the regions main markets within easy reach.

Being a forerunner in economic reforms and transformation to a market economy Estonia has had an average growth rate around 5% during the last five years. The country has received over EUR 4 billion of foreign direct investments, amounting to about 60% of GDP.

Numerous foreign companies have found Estonia to be a highly attractive location. Companies partly or wholly owned by foreigners account for about 50% of Estonia.s GDP and over 50% of the country.s exports. While offering easy access to the wealthy Nordic and North European markets, Estonia provides a low-cost base for production and export. The country lies within the European Union tariff-free customs area but with far lower start-up and running costs than in existing EU member countries.

Many costs such as energy, telecommunications and transport services, buying or renting property are considerably lower than in other parts of the Baltic Sea Region. Despite the levels of education, the skills that these well qualified graduates possess are still some of the best value in terms of salary in Europe. The average Estonian salary is EUR 390 a month, only a fraction of that of Germany or Scandinavia. Nevertheless, Estonia has acquired a well-deserved reputation for the high quality of its products.

In the wide range of industries - such as wood and food processing, engineering and electronics - investors into Estonia find they can achieve Scandinavian quality levels at East European prices.

An extra advantage is Estonia.s system of low, flat rate taxes. The system is simple, with no "hidden extras", and is designed to encourage enterprise and maximize profits. To encourage companies to expand their business all corporate investments are exempted of corporate income tax from January 1, 2000. Only dividends are taxed with corporate income tax of 26/74 (26% of gross dividend).

The system of VAT (set at 18%) is harmonized with EU requirements and social and health insurance of 33% is applied. Foreign investors are guaranteed a level playing field with local firms, including unrestricted repatriation of profits and capital and the right to own land.

Estonia leads the way among the Baltic States in Internet usage and today and amazing 43% of the population is using Internet in one way or another, a figure that is higher than in most other countries. Estonia, along with Sweden, are the only two countries where the relative number of Internet users is higher than the number of personal computers per 1000 inhabitants.

There are also excellent e-commerce systems in place in Estonia, with many of the leading banks offering the latest on-line services from personal to commercial transactions. About 45% of the population of the country are using Internet banking and a number of companies are e-billing. Altogether non-cash transactions already account for over 95% of all business transactions made in Estonia.

Sector Reviews
Wood Processing
Electronic Industry
Transport & Logistics
Engineering Industry
Chemical Industry
Construction Industry
Construction Materials
Food Processing
Biotechnology
Call Centers

Foreign Trade
The value of Estonian foreign trade in 2003 was 9.73 billion EUR, of which export was 4 billion EUR (41%) and import was 5.7 billion EUR (59%). In 2003 exports increased 10% and imports increased 13% compared with 2002.

Estonian Foreign Trade 1995-2003, special trade method (billion EUR)

Source: Statistical Office of Estoniawww.stat.ee

By Countries

In 2003 the 10 main partner countries in export have remained the same as in 2002. Exports to Finland have increased - from 24.8% in 2002 to 25.9%. Exports to Great Britain and Netherlands have decreased a little. In import there was a change in the list of the 10 main partner countries: Ukraine has replaced Poland and is with 4.3% on the sixth place among Estonian main import partners. The decrease of imports from China and from Italy was the largest. There was an increase of imports from USA, Germany and Russia.

Source: Statistical Office of Estoniawww.stat.ee

By commodity groups

Compared to 2002 there has been an increase mainly in the exports of mineral fuels, metals and articles of metal, plastics and articles thereof and transport equipment. The largest increase occurred in the imports of transport equipment, wood and articles of wood metals and metals and articles of metal.

Source: Statistical Office of Estoniawww.stat.ee

SLIDE PRESENTATION ABOUT ESTONIA