In 2023, Invest Estonia (Estonian Investment Agency) secured €336M worth of foreign investment to Estonia, creating more than 1,000 high-paying jobs, and keeping on par with the record-breaking results of 2022.
“The picture for foreign investment is varied — the overall security situation has made investors and companies more cautious, and some investment projects may not materialise or take longer to decide. However, this caution is not currently reflected in the strong performance of Invest Estonia. Our team has brought dozens of new projects to Estonia in the last two years, while previous projects have received follow-on investments. Undoubtedly, investors’ confidence is also influenced by Estonia’s strong position in international relations and the consistent work on the country’s image,” said Kati Kusmin, head of the joint agency of EAS/Kredex.
In 2022, Invest Estonia helped bring €351M worth of foreign direct investments (FDI), a record sum. “The record results over the last two years show that the war in Ukraine has not scared foreign investors away from Estonia. The decision to bring business to Estonia is a big one for foreign investors and often takes years to reach. They know very well who Estonia’s neighbours are, but the environment is still considered safe. Foreign investors are attracted by the stability of our business environment, attractive tax policies and an educated workforce,” said Joonas Vänto, head of Invest Estonia.
Estonia consistently holds strong positions in some of the most critical areas: For 10 consecutive years, the country has had the best tax code in the OECD. It also leads Europe in PISA scores, showcasing its excellent education system, and has ranked in the top 10 for effective energy transition by the World Economic Forum.
New industry
One of the most notable foreign investment news of last year, for example, was Ericsson’s decision to set up a new technology and development centre in Tallinn. The project, valued at €155M, will employ 2200 people. The upcoming complex will be fully powered by renewable electricity and will leverage AI, machine learning, robotics and other advanced Industry 4.0 technologies to optimise efficiency.
Another major success story is the Swedish company Smart Power Farm SPF AB, which plans to build an innovative 40 000 m2 organic production complex in Tootsi. The project will rely on easily accessible green energy from a wind farm currently being completed nearby and will feature as many as 38 large-scale turbines. The investment, showcasing green transition synergy in action, is estimated at over €100 million and will create upwards of 50 high-paying jobs.
“Despite strong results and success stories, we have the potential to do more, but as a country, we also have challenges to address. As we interact with foreign investors daily, we can say that the main prerequisites for attracting foreign investment to Estonia at the moment are the availability and price of green energy, the number of skilled workers, and the speedy processing of planning and permits,” Vänto commented.
Of the FDI attracted in 2023, more than 70% went to industry, and 10% to IT. Most deals came from Sweden, followed by Japan, Finland and Germany.
In 2022, Invest Estonia helped to bring €351M worth of FDI into Estonia. The year before that, foreign investment amounted to €194 million and in 2020 to €160 million.
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