|The Baltic Sea region including Estonia is currently the most dynamically developing region in Europe. Thanks to the radical economic reforms in the 1990s Estonia has obtained a very high ranking in the global list for economic freedom.
The pillars of Estonian success are conservative budgetary policy and building up a stable economic environment based on fair competition and as little regulation as necessary.
A well-developed banking financial sector, usage of new technologies and a simple and low taxation system make the investment climate extremely attractive for foreign investors.
Taxation is simple and designed to encourage enterprises and maximise profits. All corporate investments are exempted from corporate income tax from January 1, 2000, and only dividends are taxed with corporate income tax of 21/79 (21% of gross dividends). The VAT rate is set at 20%, social and health insurance at 33%. Foreign investors are guaranteed to enter the market on equal conditions with local firms including unrestricted repatriation of profits and capital and the right to own land.