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Basic Information

Area: 45,227 km²

Calling code: +372

Population: 1,340,602

Official Language: Estonian

Time zone: EET (UTC+2), Local time: 18:28


The Republic of Estonia is located in Northern Europe, with a territory that spans 45,227km2. It borders three European countries: Latvia, Finland and Russia, and it has 3,7494 of coastline mostly in the northern and western regions, along the Baltic Sea. Estonia has a total population of over 1.3 million, 69% of which live in urban areas, which makes it one of the least populated countries in the European Union.

The country is sub-divided into fifteen counties for administrative purposes, the largest of which is the countries capital city, Tallinn, which is situated on the northern coastal area of the country. Tallinn is the primary economic, political and commercial centre, and it is also Estonia’s largest and most populated town, covering 159km2. Another large city is Tartu, in the Eastern region of the country, 186km south-east of Tallinn. Tartu is considered to be the cultural and educational heart of Estonia, boasting a rich historical background, and being home Estonia’s oldest university.

In 2004 Estonia became a full member of the European Union, although it has not yet met the requirements needed to join the eurozone; it currently uses the Estonian kroon (EEK) for its national currency..


The service sector is of prime importance, and generates 75% of Estonia’s GDP figure of 18.26 billion. Most economical activity is centred around the capital city of Tallinn, where most of the countries large companies choose to locate their headquarters. The most profitable companies in Estonia according to GILD, are Hansapank (banking), Eesti Energia (energy), SEB Eesti Ühispank (banking), Eesti Telekom (telecommunications), and Tallink Grupp (shipping).

The industrial sector contributes almost a quarter of the GDP, and there are 11 major industrial zones which are located both in Tallinn and other regions. Popular sectors include timber processioning, metal working and electronic manufacturing, while most manufactured products are exported to Finland, Sweden, Russia, Latvia, and Lithuania. Estonia’s 2009 export total was $9.23 billion, and the import total was $9.315 billion.

Agriculture has decreased over the years and replaced with a more technologically advanced service sector, however agriculture still accounts for 3% of the GDP, and employs 2.8% of the labour force. Most arable farming land is used to cultivate potatoes, grains and seeds, while pork is the main meat produced in Estonia.


Estonia has a solid transportation infrastructure, which allows for quick and convenient transportation by rail, road and air. There are 19 airports located in the country, the largest and busiest being the Lennart, Meri Tallinn Airport (TLL), which is located just 4km away from Tallinn's city centre. It acts as a hub for the countries national flag carrier, Estonian Air, who operate flights to London-Gatwick, with an approximate flight time of 3 hours.

The railway infrastructure is particularly well developed, carrying over 70% of the countries total cargo. The state-owned AS Eesti Raudtee operate and maintain most of the 900km of currently used railway track in the country, and connecting trains are available to Latvia and Russia. The country boasts a network of over 57,000km of expressways, national and secondary roads.

Water transportation is also available, with the country having 45 ports, the largest being Muuga, Tallinn (comprises several ports), Paldiski, Kunda, Pärnu and Sillamäe. Estonia owns 29 merchant marine, which are primarily used for the shipping of cargo and the transportation of passengers.


Estonia has a total labour-force of 700,000, 74.5% of which work in the service sector, 22.7% in industry and 2.8% in agriculture. Estonia, particularly Tallinn and the Ida-Viru county, has a large foreign workforce: an estimated 36% of the total workforce in Tallinn are Russian. Other ethic groups present in the country include Ukrainians, Belorussians, Finns and Tartars. Due to the large multi-cultural population and many Estonians are bi-lingual, speaking the countries sole official language of Estonian along with a second language such as Russian, German or English.

The education infrastructure has undergone a recent reform to strengthen and develop the existing system, and to help create a motivated and skilled workforce. Education is provided to all Estonian citizens free of charge, and it is compulsory for students to attend primary and secondary schooling from the age of 7 to 16. Higher education institutes are split into two types: Ülikool (Universities), and Rakenduskōrgkool (Professional Higher Education Institutes). There are many universities which offer bachelor, doctor, and master degrees, such as the University of Tartu, which is ranked as the number one university in the country, and has over 17,100 students currently enrolled in educational programmes.

Business Costs

Costs for leasing office space are particularly low throughout the country. The highest costs can be found in the capital city of Tallinn, where the average rental rate stands at $20.76 per square foot per annum. According to the Cushman and Wakefield 2010 Report, Tallinn is listed as one of the lowest costing cities in the world for office space, along with Lima, Riga and Quito.

Estonia has signed a national agreement for a minimum wage pact, which ensures that all legal workers are paid at least 14.60 EEK per hour or 2,480 EEK per month, which is the current equivalent of just £0.54 an hour and £134 per month. Figures released by the Estonian Statistical Office show that the average wage is 10,212 EEK a month, which equates to £555.77 a month.

Estonia has a clearly defined tax system which applies to all working individuals and corporations, who are taxed on a yearly basis. The personal tax rate is fixed at a flat fee of 21%, regardless of the amount of income earned. The corporate tax rate is 22% of all gross annual profits. VAT is fixed at 20% on most goods and services, a discounted rate of 5% is available for a few special items, while passenger transport services and some medicines are exempt from paying any VAT.
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