Who is liable. Residents of Estonia are subject to tax on their worldwide income. Nonresidents are subject to income tax on income from Estonian sources only.
For tax purposes, individuals are considered to be resident if they have a permanent place of residence in Estonia or if they remain in Estonia for at least 183 days during a period of 12 consecutive calendar months. Natural persons must inform the tax authorities about the establishment or change of their Estonian residency by submitting a special registration form to the tax authorities.
Income subject to tax. Income for tax purposes is income derived from all sources, including salaries, wages, pensions, scholarships, grants, capital gains, lottery prizes, directors’ fees, insurance indemnities, payments from a pension fund (supplementary or voluntary pension), rent payments, royalties, interest accrued from loans, securities, leases or other debt obligations, and other payments made for services rendered (under contracts governed by the Law of Obligations, which stipulates the terms of civil law agreements).
Individuals acting independently in their own name and at their own risk are subject to income tax on income derived from selfemployment or entrepreneurial activities.
Education allowances provided by employers to their local or expatriate employees’ children are taxable for income tax and social tax purposes.
Items excluded from taxable income. In general, fringe benefits, including a company car, housing, lunch vouchers and similar items, are not treated as taxable income of the recipient. Instead, the Estonian employer pays the income tax on fringe benefits, including fringe benefits provided by a nonresident company belonging to the same group as the employer. If foreign employees working in Estonia are paid solely by a foreign company, the foreign company must register in Estonia as a nonresident employer and pay income tax and social tax (if no A1 certificate in place) on fringe benefits provided to the employee working in
Estonia. In the case of an A1 certificate, the foreign employee is not liable for Estonian social tax in accordance with the rules of European Council Regulation No. 883/2004.
Various items are excluded from the taxable income of residents including, but not limited to, the following: • Inheritances received (accepted succession).
- Gifts received from other individuals, state or local government authorities, resident legal persons or nonresidents through or on account of their permanent establishment registered in Estonia.
- Insurance proceeds received under specific insurance contracts.
- Dividends received from resident companies. Effective from 2018, dividends received from resident companies taxed at a lower rate under a special three-year distribution rule are included in the taxable income of individuals.
- Dividends received from nonresident companies, if income tax was paid on the share of profits out of which the dividends were paid or if income tax on the dividends was withheld in a foreign country.
- Income from the exchange of a holding (for example, shares) in the course of a merger, division or transformation of companies or nonprofit associations, or a merger of investment funds.
- Income from the increase or acquisition of a holding in a company through a non-monetary contribution.
- Income from the exchange of units of an investment fund.
- Income from transfers of movable property used for personal purposes.
- Gains derived from transfers of real estate, structures or apartments treated as movables or as contributions to housing associations, if the asset is privatized under government order, is received as restitution for the unlawful alienation of property or is used as the taxpayer’s primary or permanent place of residence.
- Gains derived from transfers of summer cottages or garden houses owned by residents for more than two years if the size of the land related to the cottage or house does not exceed 0.25 hectares.
- Employment income and service fees for working in a foreign state if the individual has stayed in the foreign state for the purpose of employment for at least 183 days during a period of 12 consecutive calendar months and if the relevant income has been included in the taxable income of the person in the foreign state and this is certified, with the amount of income tax indicated on the certificate (even if the amount is zero).
- Per diem allowances and accommodation costs of business trips, and compensation for business use of a private car, in accordance with the prescribed rates.
- Childbirth allowances paid by an employer to an employee or public servant, in an amount not exceeding EUR2,500.
- In-service training and retraining of employees paid for by the employer on termination of the employment or service relationship as a result of redundancy.
- Payments at prescribed rates by an employer for the treatment of damage caused to the health of an employee or public servant as a result of an accident at work or an occupational disease.
- Payments made to diplomats on the basis of the Foreign Service Act.
- Benefits paid to victims of crime under the law.
- Gambling winnings received from gambling organized on the basis of an operating permit or registration.
- Pensions in accordance with the prescribed limits.
- Scholarships that are paid by the state or that are mandatory according to the law, if they are not paid with respect to entrepreneurship, employment or management board member status.
- Property returned as restitution in the course of ownership reform.
In addition, compensation for certified expenses incurred for the benefit of another person and compensation for direct proprietary damage that is not paid with respect to entrepreneurial activities are not deemed to be taxable income of a resident, except for compensation that is paid subject to separate terms, conditions and limits, such as compensation for the business use of a private car.
Self-employment income. For registered sole proprietors, all income attributable to self-employment or entrepreneurship is subject to income tax and social tax. General partnerships are taxed as entities.
Effective from 2018, an individual not registered as a sole proprietor can open a business income account (a bank account in a credit institution resident in an European Economic Area [EEA] member state) for business income simplified taxation. Income derived from selling goods or services transferred to the business income account is subject to business income tax at the following rates.
Exceeding Not exceeding Tax rate
EUR EUR %
0 25,000 20
25,000 — 40
The tax should be automatically calculated, withheld and paid to the tax authorities on a monthly basis by the credit institution. The tax is used to proportionally cover all payroll tax obligations applicable to the individual. No separate social security contributions are due. The individual is covered by social security, provided that the tax paid meets the minimum social tax obligation.
Investment income. Dividends received by residents from resident companies are exempt from tax. However, effective from 2018, dividends received from resident companies that are taxed at a lower rate under a special three-year distribution rule are included in the taxable income of the individual. Residents are taxed on all dividends and other profit distributions received from foreign companies unless income tax was paid on the profits out of which the dividends were paid or unless income tax on the dividends was withheld in a foreign country.
Dividends paid to shareholders are not subject to withholding tax. However, effective from 2018, dividends paid to individuals (including nonresident individuals) are subject to an additional 7% income tax withholding if those dividends are paid by a resident company and taxed at a 14% corporate income tax rate at the company level.
Dividends and profit distributions paid by resident companies are subject to corporate income tax at a rate of 20% at the level of the distributing companies at the moment of the profit distribution. This tax is not a withholding tax and is paid by the company, in addition to the amount of dividends distributed.
Rental payments and royalties paid to resident individuals are subject to withholding tax at a rate of 20%. However, if a dwelling is rented out under a rental agreement, under certain conditions, the tax authorities consider 20% of rental income as rentalrelated costs and only 80% is taxed. This deduction can be applied in the personal income tax return.
Nonresidents. Nonresident individuals are taxed on the following types of income derived from Estonian sources:
- Income from the alienation or lease of assets registered in Estonia
- Interest received as a result of ownership of a contractual investment fund if the fund owned (directly or indirectly) at any time during the two-year period before the date of interest payment more that 50% of real estate located in Estonia and if the interest recipient owns at least 10% of the investment fund, unless the profits of the investment fund has been already taxed
- Royalties and income from sales or licenses of patents, copyrights, trademarks, software, know-how and other information received from Estonian persons
- Liquidation distributions and payments related to a company’s reduction of its stock capital, to the extent the amount received exceeds the acquisition cost of the shares, except for the portion of the amount received that has been taxed at the level of the company making the payments
- Salary, wages and other employment income for work performed in Estonia if more than 183 days are spent in Estonia or if the payments are made by a resident or a nonresident registered in Estonia
- Income of nonresident board members (effective from 1 January 2015, this income is taxed even if the remuneration for managing the Estonian company is paid by a foreign company; previously, such income was taxed only if the remuneration was paid by the Estonian company)
- Effective from 2018, dividends or other profit distributions received from Estonian resident companies that were taxed at a reduced rate of 14% at the company level
Nonresidents are exempt from tax on the following types of income:
- Inheritances received (accepted succession)
- Income from the transfer of movable property used for personal purposes
- Expropriation payments and compensation paid on expropriation
- Income from the exchange of a holding (for example, shares) in the course of a merger, division or transformation of companies or nonprofit associations, or a merger of investment funds
- Income from the increase in or acquisition of a holding in a company through a non-monetary contribution
- Income from the exchange of units of an investment fund
- Interest received by nonresident individuals from resident credit institutions or branches of nonresident credit institutions
entered in the Estonian commercial register
- Per diem allowances and accommodation costs with respect to business trips, and compensation for business use of a private car, in accordance with the prescribed rates
- Gains derived from transfers of real estate, structures or apartments treated as movables or as contributions to housing associations, if the asset is privatized under government order, is received as restitution for the unlawful alienation of property or is used as the taxpayer’s primary or permanent place of residence
- Gains derived from transfers of summer cottages or garden houses owned by residents for more than two years if the size of the land related to the cottage or house does not exceed 0.25 hectares
Taxation of employer-provided stock options. Grants of stock options are not considered taxable. However, the income received from the transfer of employer-provided stock options or from the exercise of stock options is considered a fringe benefit that is taxable to the Estonian employer for purposes of income tax and social tax unless the time period between grant and exercise of the stock options is at least three years. Effective from July 2017, an exemption from company-level fringe benefit tax also applies in the case of a shorter vesting period. This exemption applies proportionally to the actual vesting period if full ownership in the relevant company (underlying securities of an option) is transferred or if the employee dies or is totally incapacitated for work. Fringe benefits include benefits that are provided by other group entities to the Estonian employee. The taxable value of a fringe benefit is the difference between the fair market value of the securities and the purchase price paid by the employee. Except for option agreements digitally signed or certified by a notary, agreements concluded since 1 July 2017 should be filed with the tax authorities within five working days after their conclusion.
No tax obligations are imposed on employees with respect to the receipt of non-monetary benefits from Estonian or foreign employers. However, the employees should inform their employer if such benefits are received from foreign companies. Employees must report income and pay income tax when a gain is derived from the sale of the shares. A capital gain equals the sales price reduced by the acquisition price, by the taxable value for income tax purposes of the fringe benefit paid by the employer and by the costs related to the transfer.
Capital gains. Capital gains derived by resident individuals with respect to the following sources are not subject to income tax:
- Transfer of movable property in personal use
- Transfer of land and assets returned in the course of ownership reform
- Transfer of a dwelling house or an apartment, if it has been used as a permanent home until transfer (applicable to one transfer of residence during a two-year period), received as restitution or acquired as a result of privatization with the right of preemption and if the size of the related land does not exceed two hectares
- Transfer of a summer cottage or garden house if it has been owned for more than two years and if the size of the related land does not exceed 0.25 hectares
Capital gains derived from the sale of business property or securities are taxable at a rate of 20%.
Natural persons can register their bank accounts as investment accounts and defer the taxation of financial income until it is withdrawn from the accounts; that is, it is possible to invest the income gained from some common financial investments without being liable to annual taxation on such income.
Nonresident individuals are taxed on gains derived from the sale of property located in Estonia, excluding transfers of permanent homes under the same criteria described above regarding residents and securities issued by companies registered in Estonia. However, this exclusion does not apply if the transferred holding is a holding in a company, contractual investment fund or other pool of assets and if both of the following circumstances exist:
- At the time of the transfer or during the two-year period before the transfer, more than 50% of the property of the company, fund or pool of assets was directly or indirectly made up of immovables or structures as movables located in Estonia.
- At the time of transfer, the nonresident had a holding of at least 10% in the company, fund or pool of assets.
Deductible expenses and exemptions. Estonian residents, as well as residents of other EEA member states who derive their taxable income from Estonia and file an income tax return in Estonia, may claim deductions for the following items:
- Gifts to nonprofit organizations registered as tax favored in the
- Mandatory unemployment insurance premiums, contributions to mandatory funded pensions and other mandatory social security payments made in Estonia or abroad from income taxable in Estonia.
- Acquisition of voluntary pension fund units registered in the EEA, limited to 15% of income for the tax year or to EUR6,000, after subtracting the deductions from business income (joint limits with employer making such payments on behalf of an employee).
- Training expenses, which include costs of educating individuals and their dependents who are under 26 years old and permanent residents of Estonia who are under 26 years old and in certified educational institutions or license training. For adults, the deductions are available only for expenses for formal education and certain additional limitations apply to driver’s license training and hobby school costs.
- Interest paid to EEA credit institutions on housing loans for the purpose of acquiring an apartment, dwelling house or a plot of land to build a house for personal use (including erection, expansion and reconstruction of a home).
The total amount of deductible gifts, housing loan interest and training expenses for a tax year is limited to EUR1,200 or 50% of an individual’s income after business deductions. Housing loan interest is deductible up to EUR300.
In addition to the above deductions, the following tax exemptions apply for each tax year under the same circumstances:
- Basic tax exemption. Effective from 2018, the amount is EUR 6,000 if the annual income is up to EUR14,400. However, if income exceeds EUR14,400, the amount of basic tax exemption is calculated using the following formula:
6,000 – 6,000 × (income amount – EUR14,400)
If annual income exceeds EUR25,200, no basic exemption applies.
- Additional tax exemption of EUR1,848 for each child beginning with the second child.
The deductions and exemptions for a resident individual are restricted if at least 75% of his or her annual taxable income is derived abroad and if the income is not taxed in Estonia (the exemption method applies). In this case, an Estonian resident can claim deductions only from the income taxable in Estonia pro rata based on the percentage of Estonian income in the total taxable income (worldwide income).
Starting from 2019, a resident of another EEA state can claim all applicable deductions from their income taxable in Estonia in proportion to the share of the income in his or her total taxable income.
Business deductions. Registered individual entrepreneurs may deduct documented expenses directly related to entrepreneurial or self-employment activities, including expenses for work-related advanced training and retraining of employees, and losses incurred from the disposal of assets (except for losses incurred on the sale of securities). If certain expenses are only partly related to the entrepreneurial or self-employment activities, only the part directly related to those activities is deductible.
Documented expenses for entertainment, recreation, reception (cater ing, transport or cultural expenses incurred to serve clients or business partners) and other expenses incurred for clients or business partners with respect to entrepreneurial or self-employment activities may be deducted from income, up to a maximum amount of 2% of adjusted income. Adjusted income is financial income after adjustments for nontaxable income and expenses that are not deductible for tax purposes.
Rates. The standard income tax rate is a flat rate of 20%. The basic annual exemption ranges regressively from nil to EUR6,000, depending on the amount of the individual’s income (see Deductible expenses and exemptions).
Withholding tax rates are presented in the following table.
Type of payment
Wages, salaries and alimony
Payments for services rendered in Estonia
By nonresident legal persons from a low tax
By other nonresidents Royalties
Paid to residents
Type of payment
Paid to nonresidents
Payments made to nonresident athletes
Supplementary and voluntarily funded
* The 7% withholding tax rate applies to dividends or other profit distributions received from Estonian resident companies that were taxed at a reduced rate of 14% at the company level.
Credits. Residents may claim a credit for foreign tax paid, up to the amount of Estonian tax attributable to the foreign-source in come. The rules regarding the calculation of the credit are summarized below.
Income tax is calculated separately for income derived in Estonia and for income derived in each foreign country. The individual must pay in Estonia the difference between the foreign income tax and Estonian income tax if the income tax calculated on income derived from abroad exceeds the amount of income tax paid in the foreign country. The overpaid amount of income tax abroad is not refunded in Estonia.
If the income tax on income derived in a foreign country is paid during a tax year other than the tax year in which the income is derived, the foreign income tax is taken into account in Estonia during the tax year in which the income taxable in a foreign country is received.
Foreign dividends and employment income are exempt from tax in Estonia if these types of income are taxable abroad (see Income subject to tax).
Relief for losses. Losses from entrepreneurship, except losses incurred on the sale of securities and receivables, may be offset against income derived from other sources of entrepreneurship. Losses may generally be carried forward for seven years. However, losses incurred on the sale of securities may offset only income from the sale of securities and may be carried forward indefinitely.
- Inheritance and gift tax
Inheritance and gift taxes are not levied in Estonia. How ever, gifts received from nonresident entities are taxed at a rate of 20%.
- Social security
Contributions. Social tax is levied on employers at a rate of 33%; employees are not liable for social tax. No ceiling applies to the amount of salary subject to social tax. In addition, unemployment insurance and mandatory pension fund (subscription mandatory for persons born after 1983) charges are imposed on gross salary. The unemployment insurance rates are 0.8% for employers and 1.6% for employees. The mandatory pension fund rate is 2%, which applies only to employees. The unemployment insurance and mandatory pension fund charge are withheld by employers.
Self-employed persons must pay social tax at a rate of 33% on their net business income, subject to a maximum amount of annual income equal to 10 times the sum of the minimum monthly wages for the tax year (maximum amount of EUR64,800 for 2019). Self-employed persons must make quarterly advance payments of social tax to the Tax and Customs Board by the 15th day of the third month of the second, third and fourth quarters. Each payment must be at least EUR495 (EUR1,980 for the calendar year).
Totalization agreements. Estonian social security legislation follows the rules provided in European Council Regulation No. 883/2004. Estonia has applicable totalization agreements on social security with Canada and Ukraine. It has agreements regarding pension insurance regulation with Australia, Moldova and the Russian Federation.
- Tax filing and payment procedures
The tax year in Estonia is the calendar year.
An individual must file an income tax return if his or her annual income exceeds the amount of the basic exemption applicable to him or her and if he or she would be required to pay additional income tax based on the income tax return or if he or she would like to claim applicable tax deductions. Resident individuals also need to submit a tax return to report their foreign income. Individual income tax returns must be filed by 31 March of the year following the tax year. Individuals must pay income tax due by 1 July of the year following the tax year. Resident individuals who declare business income, foreign income or gains from the transfer of property are required to pay any additional amount of tax by 1 October of the year following the tax year. Spouses cannot file a joint tax return. However, a spouse may use the other spouse’s basic exemption up to EUR2,160, depending on the other spouse’s taxable income, provided that the sum of the spouses’ taxable income does not exceed EUR50,400.
Employers must withhold the appropriate amount of income tax from employees’ salaries. Tax liability is determined by d educting taxes withheld, and creditable amounts of foreign taxes paid, from the computed amount of income tax.
- Double tax relief and tax treaties
Most of Estonia’s double tax treaties follow the Organisation for Economic Co-operation and Development (OECD) model convention. The income tax law provides relief for foreign taxes paid, up to the amount of Estonian tax imposed on the foreignsource income (see Section A).
Estonia has entered into double tax treaties with the following countries.
Albania Iceland Poland
Armenia India Portugal
Austria Ireland Romania
Azerbaijan Isle of Man Serbia
Bahrain Israel Singapore
Belarus Italy Slovak Republic
Belgium Japan Slovenia
Bulgaria Jersey Spain
Canada Kazakhstan Sweden
In June 2018, Estonia signed the Multilateral Convention to Implement Tax Treaty Related Measures to prevent Base Erosion and Profit Shifting (also known as the Multilateral Instrument or MLI), which allows the modification of existing tax treaties simultaneously. For an individual, the MLI will extend the possibilities to initiate mutual agreement procedures. In the future, an Estonian resident, in certain cases, may turn for a tax dispute to the tax authority of the member state where the income is earned. It is still uncertain when the MLI will enter into force for Estonia because it still needs to go through a ratification process in the Estonian parliament.
- Temporary visas
Exceptions to the visa requirement. In general, a foreign national must have a visa to enter Estonia or stay in Estonia. However, visas are not required for the individuals described below.
A citizen of the European Union (EU), EEA or Switzerland may stay in Estonia on the basis of a valid travel document or identity document and must register his or her place of residence within three months after his or her date of entry in Estonia. If a citizen of the EU, EEA or Switzerland registers his or her place of residence, he or she acquires a temporary right of residence in Estonia for five years, which also gives the right to work in Estonia. At the end of the five years, the term of temporary right of residence is extended for another five years if the residence of the citizen of the EU, EEA or Switzerland continues to be registered in Estonia and if the right of residence of this citizen has not been extinguished or terminated. The EU member states are Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom. The EEA member states are all of the EU member states and Iceland, Liechtenstein and Norway.
Citizens of Albania (biometric passport holders; these are holders of combined paper and electronic passports that contain biometric information [for example, fingerprint recognition] that can be used to authenticate the identity of travelers), Andorra, Antigua and Barbuda, Argentina, Australia, Bahamas, Barbados, Bosnia and Herzegovina (biometric passport holders), Brazil, Brunei Darussalam, Canada, Chile, Costa Rica, Colombia, Dominica, El Salvador, Georgia (biometric passport holders), Grenada, Guatemala, Honduras, the Hong Kong Special Administrative Region, Israel, Japan, Kiribati, Korea (South), the Macau Special Administrative Region, Malaysia, Marshall Islands, Mauritius, Mexico, Micronesia, Moldova (biometric passport holders), Monaco, Montenegro (biometric passport holders), New Zealand, Nicaragua, North Macedonia (biometric passport holders), Palau, Panama, Paraguay, Peru, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Samoa, San Marino, Serbia (biometric passport holders), Seychelles, Singapore, Solomon Islands, Taiwan (the passport issued by Taiwan must contain the number of the identification card), Tonga, Timor-Leste, Trinidad and Tobago, Tuvalu, Ukraine (biometric passport holders), United Arab Emirates, the United States, Uruguay, Vanuatu, Vatican City and Venezuela may stay in Estonia without a visa for up to 90 days during a 6-month period.
Citizens of Armenia, Azerbaijan, China Mainland, Georgia, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Mongolia, the Russian Federation, Tunisia, Turkmenistan, Uzbekistan and Vietnam with diplomatic passports may stay in Estonia without a visa for up to 90 days during a 6-month period. Citizens of Turkey with diplomatic, service or special passports may stay in Estonia without a visa for up to 90 days during a 6-month period. Holders of diplomatic and service passports from Argentina, Bolivia, Cape Verde, Morocco, the Philippines, Thailand and Ukraine may stay in Estonia without a visa for up to 90 days during a 6-month period. Holders of the United Nations travel permit (laissez-passer) may stay in Estonia without a visa for up to 90 days during a 6-month period.
In addition, a third-country national who is a holder of a residence permit of a Schengen state or appropriate Schengen visa (see below) may enter and stay in Estonia during the validity period of such Schengen residence permit or visa. Member states of Schengen include Switzerland and all EEA countries except Bulgaria, Croatia, Cyprus, Ireland, Romania and the United Kingdom.
Types of visas. Foreign nationals may enter Estonia or its international transit zone with the following types of Schengen visas:
- Airport transit (Type A)
- Short-term (Type C)• Long-term (Type D)
An airport transit visa (Type A) is issued for entry into the international transit zone at an Estonian airport and for the stay in such zone until the departure to the next transit country or arrival country, where the person has a legal right to enter. The visa does not grant a foreign citizen the right to enter Estonia or stay in Estonia.
Nationals from the following countries must possess an airport transit visa when passing through the international transit area of airports located in Schengen member states:
- Congo (Democratic Republic of)
- Sri Lanka
A short-term visa (Type C) is issued for transit through or an intended stay in the territory of EU member states for a duration of no more than 90 days in any 180-day period from the date of first entry in the territory of Schengen member states. If visiting only Estonia, the Schengen visa must be applied for at the Estonian representation or at the representation of the member state representing Estonia in issuing Schengen visas.
If the travel destination includes more than one Schengen member state, the application must be filed at the representation of the main destination. The main destination is the destination where the individual intends to spend the longest time or the destination where the individual intends to carry out the main purpose of the intended journey.
Long-term visas (Type D) are issued for single or multiple entries into Estonia if the intended stay in Estonia will last longer than the period available under a short-term visa (that is, more than three months). The long-term visa is issued for a period of stay up to 12 months, and with a period of validity up to 365 days. It also gives the right to enter other Schengen member states for a period of up to 90 days in a period of 180 days. An individual can apply for a long-term visa for several reasons, such as study, work or family relations. An individual must apply in person for a long-term visa at Estonian representations.
A foreign national may work in Estonia on the basis of a longterm visa. However, before applying for the visa, short-term employment must be registered at the Estonian Police and Border Guard Board (PBGB).
- Work permits and self-employment
To work in Estonia, a third-country national must hold a valid residence permit that entitles him or her to work. Effective from 1 September 2013, no separate work permit is issued, and aliens residing in Estonia may work on the basis of the residence permit. For details, see Section H.
A citizen of the EU, EEA or Switzerland has the right to stay and work in Estonia on the basis of a valid travel document or identity document and is required to register his or her place of residence within three months after the date of entry into Estonia (see Section F).
Unless an international agreement stipulates otherwise, aliens who arrive or stay in Estonia either on the basis of a long-term visa or on a visa-free basis may engage in short-term employment, which must be registered by their employer at the PBGB. Short-term employment cannot exceed a period of 365 days during a period of 455 days.
Short-term employment may be registered in an expedited procedure (such as for employment as a teacher or lecturer, for scientific research or for employment as a top specialist) or in an ordinary procedure. Under the expedited procedure, the short-term employment must be registered by the next business day after the date of submission of the application. Under the ordinary procedure, short-term employment is registered or refused registration within 10 business days beginning from the date following the date of acceptance of the submission of the application.
The following documents must be submitted when applying for registration of short-term employment in Estonia:
- A standard application form
- Copy of the identity document of the applicant
- A digital color photo, format JPEG, sized 1 to 5 MB, minimum resolution 1300 x 1600 pixels
- Copy of the personal data page of the identity document of the person who submits the application, unless the application is submitted personally by an employer who is a natural person or by a signatory for an employer who is a legal person
- A document certifying the payment of a state fee
Additional documents may be required depending on the basis of short-term employment registration. For example, a document proving professional education is required in certain cases.
- Residence permits
Citizens of the EU, EEA or Switzerland have the right to stay in Estonia on the basis of a valid travel document or identity document (see Section F). As a result, these individuals are not subject to the rules regarding resident permits discussed below. Residence permits are issued to the third-country nationals and persons with undetermined citizenship. The residence permits may either be temporary (up to five years) or long-term (without a term).
An alien who applies for a residence permit, is subject to the immigration quota of Estonia for aliens, which may not exceed 0.1% of the Estonian permanent population in one year.
The immigration quota does not apply to the following:
- Ethnic Estonians
- Family members (spouse, child, parents, grandparents) of an Estonian citizen and of an alien who resides in Estonia on the basis of a residence permit which is issued to an alien for settlement with a spouse
- An alien who is granted a residence permit for study
- An alien who is granted a residence permit for employment in research activities on the condition that he or she has appropriate professional training and education, or is a lecturer in Estonia in an educational institution that complies with the requirements established by the legislation
- Citizens of Japan and the United States
- An alien who has been granted a residence permit considering the fulfillment of immigration quota and who thereafter has not left to settle in another state
- An alien who is granted a residence permit for settling permanently in Estonia
- An alien who has been issued a residence permit for employment in a post in the field of specialty of information and communication technology
- An alien who has been issued a residence permit for employment in a startup company
- An alien who has been issued a residence permit for engage-ment in business related to startup business
- An alien who has been issued a residence permit for engagement in an enterprise as a large investor
- An alien who has been issued a temporary residence permit for employment as a top specialist
A temporary residence permit may be issued to an alien for the following reasons: • To settle with a spouse
- To settle with a close relative
- For study
- For employment (in a post in the specialty field of information and communication technology, at a startup company or as a top specialist)
- For business (related to startup or as a large investor)
- On the basis of a treaty
- In the case of substantial public interest
- For settling permanently in Estonia
An application together with necessary documents must be submitted in person in a foreign representation of Estonia. As an exception, an application may be submitted in a Service Office of the Citizenship and Migration Bureau if the applicant is one of the following:
- Spouse of a citizen of Estonia
- Spouse of a person who is Estonian by nationality
- An alien who is staying in Estonia on the basis of a temporary residence permit
- Spouse of a person who is applying for a residence permit for Master’s or doctorate degree studies
- Spouse of a person who is applying for a residence permit for scientific research, for employment as teacher or lecturer or for employment as a top specialist
- Spouse of a domestic applicant for a residence permit for enterprise (such applicant may submit the application in a Service Office of the Citizenship and Migration Bureau if certain conditions are fulfilled)
- Citizen of a foreign state, if Estonia has entered into an agreement on visa-free travel with such state or if the visa requirement has been waived with respect to such citizen
- A citizen of the United States or Japan and his or her spouse and minor children
- An alien who holds an EU Blue Card issued by another EU member state and who is applying for an EU Blue Card in Estonia
- Spouse of an alien holding an EU Blue Card issued by another EU member state who holds a residence permit issued by another EU member state and a family member of an alien holding an EU Blue Card who is applying for residence permit in Estonia for settling with his or her spouse; must apply within one month from the date of entry into Estonia for a residence permit for settling with his or her spouse
Temporary residence permit for employment. An alien may apply for a residence permit for employment with an employer registered in Estonia or for engagement in scientific or research works if the employer is entered in the register of science and development institutions. To obtain a temporary residence permit, one of the following conditions must be met:
- The Estonian Unemployment Insurance Fund must consent and the salary criterion must be met.
- The Estonian Unemployment Insurance Fund does not consent, and the salary criterion is not fulfilled (applicable to specific categories of employees, such as artists, sports persons, teachers and members of academic staff).
- The Estonian Unemployment Insurance Fund does not consent, but the salary criterion is fulfilled, provided the applicant will work as an expert, advisor or consultant (professional qualification is required).
- The Estonian Unemployment Insurance Fund does not consent, but the salary criterion is fulfilled, and if the applicant will perform managerial or supervisory functions of a legal person registered in Estonia, which is governed by private law, and if the following additional conditions are satisfied:
— The company must have been registered in Estonia at least five months, it must have been conducting actual business activities in Estonia during the last five months, and the granting of the temporary residence permit will significantly contribute to the granting of a residence permit for employment.
— I t is granted to a partner of a general partnership and limited partnership, member of the management or supervisory board of private limited company, public limited company, foundation or commercial association, member of the management board of a nonprofit association, procurator, liquidator, bankruptcy trustee, auditor, tax auditor, member of an audit committee or director of foreign company branch.
- The permit is granted on the basis of an EU Blue Card.
- The permit is granted for scientific research.
- The permit is granted for employment as a top specialist.
- The permit is granted for employment as a temporary agency worker.
- The permit is granted for working at a startup.
- The permit is granted for working as an employee transferred within an undertaking.
The following documents must be submitted when applying for a temporary residence permit for employment in Estonia:
- A standard application form and its annexes
- Curriculum vitae as provided on the home page of the PBGB
- An identity document of the applicant
- Consent of the Estonian Unemployment Insurance Fund (not applicable in certain cases to certain individuals, such as management board members, top specialists and posted workers)
- Applicant’s written explanation as to why he or she wants to work in Estonia
- A digital color photo, format JPEG, sized 1 to 5 MB, minimum resolution 1300 x 1600 pixels
- A document certifying that the applicant has actual domicile in Estonia (unless the domicile has been registered in the population register of Estonia)
- A document certifying the payment of a state fee
Additional documentation requirements exist depending on the basis for the application for the residence permit. The following are examples of these requirements:
- Posted workers: an employment contract from the foreign country, documents certifying the assignment abroad and an insurance contract
- Aliens performing managerial or supervisory functions of legal persons that are governed by private law and registered in Estonia: documents evidencing economic activities of the company (for example, statement of the bank account of the company, data from value-added tax declaration, and documents evidencing transactions and contracts)
- Top specialist: documents evidencing appropriate professional training or experience for the intended employment
A sole proprietor must apply for residence permit for business (see Temporary residence permit for business).
The decision to grant or refuse a temporary work permit must be made within two months after the acceptance of the application.
A residence permit for employment is issued for a period of employment in Estonia that is guaranteed by an employer. The period of validity of this permit is up to two years, and it can be extended for up to five years at a time.
If a higher professional qualification is required for the employment, it is possible to apply for a residence permit for employment on the basis of an EU Blue Card. Higher professional qualification is required for applying for the EU Blue Card. Higher professional qualification may be based on either of the following:
- The nominal time of study of at least three years, which is evidenced by a document certifying higher education
- At least five years of working experience
Jobs for highly qualified individuals require the necessary knowledge and experience evidenced by higher professional qualification. The PBGB assesses the compatibility of the qualification to the requirements before the submission of an application for the EU Blue Card.
The residence permit for employment under an EU Blue Card is issued with a validity period that is three months longer than the employment period granted by an employer. The validity period cannot exceed two years and three months, and it can be extended for up to four years and three months at a time.
Temporary residence permit based on legal income. Since 1 July 2012, it is not possible to apply for temporary residence permit based on the existence of sufficient legal income. Aliens holding a valid residence permit based on the existence of sufficient legal income on 1 July 2012 can extend the residence permit based on the same terms and conditions on which they applied for the residence permit.
Temporary residence permit for settling with a spouse. A temporary residence permit may be issued to a foreign national to settle with his or her spouse who resides in Estonia permanently and who satisfies any of the following conditions:
- He or she is an Estonian citizen.
- He or she is a citizen of an EU member state who holds a right of residence.
- He or she is an alien who has been residing in Estonia on the basis of a residence permit for at least two years, unless the spouse received a residence permit for any of the following:
— Master’s or doctorate degree studies
— Employment on the basis of an EU Blue Card
— An alien who formerly resided in Estonia on the basis of an EU Blue Card
— Employment as a person engaging in creative activities for an arts institution, teacher or a member of academic staff, person engaging in scientific research, professional sportsman, coach, referee or sports official, member of the management body of a legal entity, expert, advisor or counsel, layer of devices or craftsman, or top specialist
In addition to standard documents required, the alien must submit the following documents:
- A document certifying that the applicant and the person inviting him or her are married (if they were married in a foreign state)
- A document certifying the spouse’s actual dwelling in Estonia (unless the residence has been registered in the population register of Estonia)
- Documents certifying the legal income of both spouses
- Insurance contract
The residence permit is refused if false data is submitted with the application, the marriage is fictitious or the spouses do not reside in Estonia.
Temporary residence permit for settling with a close relative. A temporary residence permit may be issued to certain foreign citizens to settle with a close relative who is an Estonian citizen or to settle with a close relative who is a foreign national and who resides in Estonia on the basis of a long-term residence permit. This permit may be issued to the following individuals:
- A minor child in order to settle with his or her parent
- An adult child in order to settle with a parent if the child is unable to cope independently as a result of health reasons or a disability
- A parent or grandparent in order to settle with his or her adult child or grandchild who legally resides in Estonia if the parent or grandparent needs care that he or she cannot receive in his or her home country or in another country and if the permanent legal income of his or her child or grandchild ensures that the parent or grandparent will be maintained in Estonia
- A person under guardianship in order to settle with the guardian if the permanent legal income of the guardian ensures that the ward will be maintained in Estonia
Temporary residence permit for study. A temporary residence permit for study may be issued to a foreign national for study in educational institutions acknowledged by the state.
A residence permit for study may be issued for a period of up to one year but not longer than the estimated duration of the studies. If a foreign national continues his or her studies in the same educational institution, his or her residence permit may be extended by one year at a time.
In addition to standard documentation requirements, an applicant must submit the following documents:
- A language skills certificate issued by the university or institution of professional higher education (except in the case of participation in preparatory courses)
- A document that certifies the legal income of the applicant or his or her family members, who validate his or her subsistence (unless the purpose of studies is voluntary participation in a youth project or program acknowledged by the Ministry of Education and Science).
An alien who holds a residence permit for study can be employed in Estonia without holding a separate permit for employment if his or her employment does not interfere with the studies.
Temporary residence permit for business. An alien may apply for a residence permit for business if such alien owns shares in a company or acts as a sole proprietor and satisfies one of the following additional conditions:
- The alien has invested in Estonia a capital sum of at least EUR65,000 that is under his or her control in the case of a company.
- The alien has invested in Estonia a capital sum of at least EUR16,000 that is under his or her control in the case of a sole proprietor.
The equity capital of a company, subordinated liability and the value of registered fixed assets are considered investments.
An alien can also apply for a residence permit for business in the following circumstances:
- The alien will conduct a startup business. The startup company must have been previously evaluated by an expert committee (certain exemptions apply).
- The alien has made a direct investment of at least EUR1 million in a company entered into the commercial register of Estonia that invests mostly in the Estonian economy or an investment in an investment fund that, according to the investment policy of the fund, invests the instruments of the fund mainly in companies entered into the commercial register of Estonia.
A residence permit for business may be granted for up to five years. The residence permit establishes the spheres of activities of the undertaking and, if necessary, the area of operation.
In general, an application must be submitted together with necessary documentation in person at a foreign representation of Estonia. However, an application for a residence permit may be submitted in Estonia if the all of the following conditions are fulfilled:
- The company has been registered in Estonia at least four months before the submission of the application for a residence permit.
- The company has conducted business activities in Estonia at least the last four months.
- The person is staying in Estonia legally on the basis of visa-free stay or a visa in connection with the activities of the company.
When applying for an extension of a residence permit after one year, the investment requirement may be replaced by the following:
- Sales income at least EUR200,000 per year
- Social security tax paid in Estonia (for each month, the tax must at least equal the monthly social security tax paid in Estonia on five times the annual average gross wages)
In addition to standard documentation requirements, an applicant must submit the following documents:
- A document certifying the education level, specialty or occupation
- A document certifying the amount of investments of the applicant in Estonia and the amount of the investments controlled by the applicant
- An applicant’s written statement of grounds
- A statement as why the applicant’s settlement in Estonia is important and necessary for business and for the development of the Estonian economy
- A written business plan (see below)
A description of the business plan must be submitted either in Estonian or English. It must provide details regarding the business, such as the following:
- Planned activities
- Potential clients and suppliers
- Plans of development
- Fixed assets available to the company
- Circulating capital
- Labor force
- Financial forecasts for the next two financial years (revenue forecast, balance sheet and cash flow forecast)
- Curriculum vitaes of the persons who will perform managerial and supervisory functions
If an alien is granted a residence permit for business, he or she cannot work in Estonia under the subordination of any other person. If an alien has been granted a temporary residence permit for business for the purpose of participation in a legal entity, he or she may engage in the performance of management for the legal entity specified in the residence permit.
Long-term residence permit. A long-term residence permit is issued to a foreign national who has permanently resided in Estonia under a temporary residence permit for at least five years and has all of the following:
- A currently valid temporary residence permit
- A place of residence registered in the Estonian population register
- Permanent legal income for subsistence in Estonia
- Health insurance (Estonian Health Insurance Fund)
- Knowledge of the Estonian language that is at the B1 level or higher level, as established by the language act, or at a level corresponding to the B1 level or higher
A long-term residence permit may not be issued to a foreign national who received a residence permit for study in Estonia. Half of the he period of residence permit for study is taken into account if the person holds thereafter a temporary residence permit on other grounds. A long-term residence permit may not be issued in the in case of a substantial public interest.
The necessary 5-year period of permanent residency before a long-term residence permit application includes temporary absence from Estonia, if such absence did not exceed 6 consecutive months and a total of 10 months during the 5-year period before the date on which the foreign national submits an application for a long-term residence permit.
For a foreign national who has an EU Blue Card, instead of satisfying the requirement of permanent residence in Estonia, the foreign national may satisfy a requirement that directly before the submission of the application for long-term residence permit, he or she has been permanently residing on the basis of the EU Blue Card in EU member states for at least five years, including the last two years in Estonia based on the EU Blue Card.
Temporary residence permit for settling permanently in Estonia. An alien may apply for a temporary residence permit for settling permanently in Estonia if all of the following conditions are satisfied:
- The person is settled in Estonia based on temporary residence permit and his or her permanent settling in Estonia is in compliance with the public interest.
- The person has held a temporary or permanent right of residence in Estonia or a residence permit for long-term Estonian residence or has been an Estonian citizen.
- The person has permanently resided in Estonia at least three years within five consecutive years, unless he or she has obtained higher education in Estonia with respect to bachelor’s and master’s study integrated curricula, master’s study or doctoral study.
- The person is well adapted to Estonia.
- His or her activities have been in compliance with the purpose for granting the residence permit and the terms of the permit.
The above requirements may not be applicable if any of the following circumstances exists:
- The person has been granted a temporary residence permit for settling with a spouse and has lived in Estonia for at least three years based on this permit.
- The person has been granted a temporary residence permit for settling with a spouse and the marriage ends before the lapse of three years from the receipt of the residence permit, but the obligation to leave Estonia would be too burdensome for the person.
- The person has been granted a temporary residence permit for settling with a close relative and the basis for granting a residence permit has lapsed, but the obligation to leave Estonia would be too burdensome for the person.
The applicant must submit the following documents:
- An application for a temporary residence permit if the person is applying for a temporary residence permit
- An application for the extension of a temporary residence permit if the person is applying for an extension of a temporary residence permit
- Data regarding close relatives and family members if the person is applying for a temporary residence permit or an extension of such permit and if the data has changed
- An identity document
- A digital color photo, format JPEG, sized 1 to 5 MB, minimum resolution 1300 x 1600 pixels
- A document proving sufficient legal income
- Health insurance contract
- A document certifying the payment of the state fee
- Estonian e-Residency
Estonia is the first country to offer e-Residency, which is a transnational digital identity available to anyone in the world interested in administering a location-independent business online.
An e-Resident is a foreigner for whom, as a benefit, Estonia has created a digital identity and issued digital identity card, on the basis of the identification credentials of the foreigner’s country of citizenship. This card is an e-Resident digi-ID.
The e-Resident digi-ID is a digital document that only can be used in the electronic environment to identify the person and to give digital signatures. The e-Resident digi-ID enables a foreigner to participate in public and private administration in Estonia, notwithstanding his or her physical residence. The e-Resident digi-ID does not grant a right to reside in Estonia.
The e-Resident digi-ID can be issued to a foreigner who has links to Estonia or a reasonable interest in using public e-services in Estonia, and who is not one of the following:
- A foreigner who is residing in Estonia based on a residence permit or the right of residence
- A foreigner who is staying in Estonia on the basis of the International Military Co-operation Act, and is holding an identity card or residence card issued by the Police and Border Guard Board
E-Residents can do the following:
- Digitally sign documents and contracts
- Verify the authenticity of signed documents
- Encrypt and transit documents securely
- Establish an Estonian company online within a day (currently, a physical address in Estonia is required, which may be obtained using an external service provider)
- Administer the company from anywhere in the world
- Conduct e-banking and remote money transfers
- Access online payment service providers
- Declare Estonian taxes online (e-Residency does not automatically establish tax residency)
E-Residents receive a smart ID card. Digital signatures and authentication are legally equivalent to handwritten signatures and face-to-face identification in Estonia between partners on agreement anywhere in the world.
The following documents are required for applications for e-Residency: • An application form
- Foreigner’s identity document or a copy of the document if the application is submitted by post and by email
- A digital color photo, format JPEG, sized 1 to 5 MB, minimum resolution 1300 x 1600 pixels
- A document certifying payment of the application fee
- A written explanation in free form concerning the intention to use the digital ID and the circumstances of its use (the holders of a service card or diplomat card need not submit this document)
- For an applicant for the e-Resident digital identity who is an employee for external representation, his or her service or diplomatic card
The decision on the issuance or refusal of an e-Resident digi-ID is made within 30 working days.
E-Residency does not confer citizenship, tax residency, residence or right of entry to Estonia or to EU. The e-Resident smart ID card is not a physical identification or a travel document, and does not display a photo.
- Brexit and immigration
Estonia has adopted a law dealing with Brexit, which at the time of writing was scheduled to occur by 31 October 2019. Relevant changes (depending on if it is a deal or no-deal Brexit) will enter in to force as of the day after Brexit.
Without a deal, British citizens will be subject to the same rules as other non-EU third-country nationals. However, individuals who have registered their right of temporary or permanent residence in Estonia as an EU citizen have the right to acquire a respective residence permit in Estonia (that is, the EU citizen right of residence is automatically replaced with a third-country national residence permit) and can stay in Estonia until the expiration date of the identification card.
More specifically, in the case of a deal Brexit, British citizens can continue to reside in Estonia as before Brexit on the basis of residence registration (a valid Estonian identification card). After the transition period, their EU right of residence is automatically considered to be a residence permit. Identification cards expiring after the transition period are exchanged for residence cards. In the case of a no-deal Brexit, EU citizen right of residency registration will be automatically converted to a temporary or longterm residence permit. The Estonian identification card can continually be used as an identity document in Estonia; however, as of 1 April 2020, it no longer can be used as an addition to travel documents to re-enter Estonia. If British citizens want to travel from Estonia to other EU member states, they need to change it to a residence permit, which is needed to re-enter Estonia.
Without a deal, British citizens who enter Estonia after Brexit will be subject to the same rules as other non-EU third-country nationals. Therefore, to enter Estonia, they will need a visa or a residence permit. It is expected that a visa freedom agreement will be concluded with the United Kingdom. In general, Estonian residence permits are subject to a national quota; however, according to the law, the quota will not apply to British citizens.
- Family and personal considerations
Family members. An Estonian citizen residing in Estonia or a foreign national permanently residing in Estonia may call their spouse to live with them in Estonia, if the spouses share close economic ties, they have a close psychological relationship, the family is stable and the marriage is not fictitious.
A family member of a citizen of an EU or EEA member state or Switzerland may stay in Estonia together with such citizen on the basis of a valid travel document and visa (if applicable) for a period of up to three months after the date of entry in Estonia. Within three months after the date of entry in Estonia, a family member staying in Estonia on the basis of a valid travel document must apply for a temporary right of residence. Otherwise, he or she must leave Estonia before the end of the three-month period.
Marital property regime. Under Estonian family law, property acquired during a marriage is the joint property of the spouses. Proprietary rights of spouses may be specified in a marital property contract. A marital property contract may be entered into before or during a marriage.
Forced heirship. Regardless of the terms of a deceased relative’s will, disabled ascendants, descendants and spouses for whom the deceased had a maintenance obligation arising from the Family Law Act are entitled to receive a compulsory portion of the estate, which equals one-half of the share they would receive in an intestate succession.
Driver’s permits. A driver’s license issued in an EEA member state or Switzerland is valid until the end of the period of validity stated on the license. If the period of validity of the driver’s license is longer than 10 years, it must be replaced with an Estonian driver’s license within 24 months after the date on which a residence permit was issued or on which the person settled in Estonia. If the driver’s license has expired or if the person has not replaced it within 24 months after the date on which the person settled in Estonia, it will be replaced with an Estonian driver’s license after the individual passes the theory test and driving test. The replaced driver’s license must be surrendered to the Estonian Road Administration.
Driver’s licenses issued in certain foreign states that are parties to specific conventions or mutual agreements are valid for the 12-month period beginning on the date of the issuance of the residence permit. A driver’s license issued in certain foreign states may be replaced with an Estonian driver’s license without a test. In other cases, passing the traffic theory test and the driving test is mandatory. In all cases, passing the tests is mandatory if the driver’s license expired more than five years ago.
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