Destinations Catalog

The Republic of Estonia

Estonia
Population:
1 309 104
Capital:
Tallinn
UTC:
+02:00
Ease of Doing Business Index:
12
Currency:
EUR ($1 = EUR 0.89)
Unemployment Ratio:
6.3%
Income Tax:
20%
Corporate Income Tax:
20%
Social Tax:
1.6%
Notice Period:

15-90 days

Dismissal Period:
10+ days
Turnover Ratio:
$5897 million
Office Rent:
$6.50-33/m2
IT Headcount:
26 000
IT Graduates:
1 150
Average Salary
Junior
Middle
Senior
Lead
$ 1 460
$ 1 900
$ 3 500
$ 3 800
English Level
High Proficiency
Main IT Outsorcing Destinations
Cities
IT Headcount
Main IT Outsorcing Destinations
Cities
IT Headcount
Estonia
Country Description

Estonia is a comparatively small country in Northern Europe. Its population is 1,4 million people. The main focus of the country's economy is the service industry. Mass digitalization is one of Estonia's key directions: you can vote, fill out a tax return and apply to the state authorities via the Internet. Another advantage is a comparatively low level of tax and constant growth of the economy. Also, you can register the company there in 1-2 days and you shall not be present in the country at the moment of registration. There is the term of the electronic citizenship, which can be obtained by the foreigners as well.

Population
1 309 104
Capital
Tallinn
UTC
+02:00
Currency
EUR ($1 = EUR 0.89)
Ease of Doing Business Index
12
Unemployment Ratio
6.3%
Income Tax
20%
Corporate Income Tax
20%
Social Tax
1.6%
Notice Period

15-90 days

Dismissal Period
10+ days
Turnover Ratio
$5897 million
Office Rent
$6.50-33/m2
IT Headcount:
26 000
IT Graduates:
1 150
Average Salary
Junior
Middle
Senior
Lead
$ 1 460
$ 1 900
$ 3 500
$ 3 800
English Level
-------

*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org

Country Description

Estonia is a comparatively small country in Northern Europe. Its population is 1,4 million people. The main focus of the country's economy is the service industry. Mass digitalization is one of Estonia's key directions: you can vote, fill out a tax return and apply to the state authorities via the Internet. Another advantage is a comparatively low level of tax and constant growth of the economy. Also, you can register the company there in 1-2 days and you shall not be present in the country at the moment of registration. There is the term of the electronic citizenship, which can be obtained by the foreigners as well.

Income Tax

Personal Income Tax in Estonia amount to 20%.

Corporate Income Tax in Estonia amount to 20%.

Social Тax

Social Tax for employees amounts to 1.6%

Social Tax for employers amounts to 33.80%

Notice Period

In general, an employment contract can only be terminated by respecting a notice period. An employer can, however, terminate an employment contract without respecting a notice period, if, considering all circumstances and mutual interests, it cannot be reasonably demanded that the execution of the contract continues during a certain notice period. Usually, this is applicable in case of gross misconduct only.

The employer termination will respect the following notice periods, depending on the seniority of the employee:

  • <1 year of employment - min. 15 calendar days;
  • 1-5 years of employment – 30 calendar days;
  • 5-10 years of employment – min. 60 calendar days;
  • >10 years of employment – min. 90 calendar days.

These terms can be regulated by a collective agreement.

Dismissal Conditions

The Estonian legislation envisages different types of dismissal depending on the type of position and reason for being dismissed:

  • An employee can be dismissed for strong reasoning, preferably included in the Estonian Employment Contracts Act.
  • An employee can be dismissed due to financial reasons – reduction in the volume of work done, reorganization of working processes, employer’s bankruptcy, etc. In the last case, an employer shall find some job offers for redundant employees. Except for bankruptcy, an employer is obliged to pay compensation equal to the amount the employee may have received until the contract expiry. However, no compensation is envisaged due to different force majeure enlisted in the contract;

The Estonian government strongly protects certain categories of employers from dismissal. These are pregnant women or women on maternity leave, those individuals that are on child care or adoptive parent leave, as well as employees’ representatives.

Hiring Period

2 weeks - 3 months

Office Rent

Office rent costs from $6.50/m2 to 33/m2.

The prices also depend on whther the office is furnished or not:

  • $7.80-14/m2 without furniture
  • $9.50-33/m2 furnished

IT Headcount

Besides its small population, Estonia has a comparatively large number of IT specialists – almost 26K as of the mid-2018. Yet, there is still a shortage of engineers which makes the local market attractive to foreign specialists. Estonian IT market comprises of 3 main types of IT companies: purely national, national companies that have become international and purely international. The most famous Estonian techno project is Skype, and many people working on new startups are hoping to repeat its success. Amidst other popular Estonian services are TransferWise, GuardTime, Fortumo. As to the international companies, numerous global tech players like Nokia, Sony Ericsson, as well as foreign banks, to open their regional HQs there.

IT Graduates

Every year over 1000 students graduate from the universities and faculties related to the IT technologies and development sector. The government establishes numerous initiatives to attract student from abroad as well since the shortage in the graduates is still significant. The most popular are higher educational establishment are

  • Tartu University
  • Tallinn University
  • Tallinn University of Technologies
  • Estonian Academy of Security Science
  • Estonian Information Technology College

Average Salary

According to the position, the average gross salaries are:

  • Junior Software Engineer – $1460
  • Middle Developer – $1900
  • Senior Developer – $3500
  • Technical Lead – $4000+
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*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org