Estonia: Tax-Efficient Sectors
Tax-Privileged Business Sectors
The fact that there is no corporate tax on undistributed profits is an incentive for new businesses to reinvest. Start-up and development grants are available through Enterprise Estonia in conjunction with funding available through the EU. The process for applying for and receiving grants has been streamlined and is now much faster. Grants of up to 5,000 are now available for start-ups and the business must contribute 20% of the total investment. For larger businesses (e.g. with more potential in the export market), grants of up to EUR32,000 are available with the business contribution set at 50% previously.
A decision will generally be made within 10 to 20 days, depending on whether the grant applied for is a start-up or development funding. For the former, the grant is available for businesses less than 12 months old: for the latter, the grant is available for businesses that have been active for up to 36 months.
The Estonian government, under the auspices of the Estonian Tax & Customs Board, has established Free Zones that are regarded as being outside the remit of the Customs area for purposes of import and export duties. VAT and excise duties do not have to be paid on goods brought in for later re-export.