1. Estonian business environment Kaupo Sempelson Enterprise Division Ministry of Economic Affairs and Communications May 17 Valmiera, 2013

2. About Estonia

3. General Information Population: 1.29 million Area: 45 000 km² Language: Estonian Currency: EUR GDP: EUR 13 172 per capita (2012) GDP growth: 3.2% (2012) Exports: 92.5% of GDP (2012)

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5. Entrepreneurship 52 acting enterprises for 1000 inhabitant Survival rate of enterprises 73,7% (3 years old enterprises) Share in world trade 0,099% 11 281 exporting enterprises Productivity of EU 27 – 68% Approximately 19 000 new enterprises in 2012 43% want to be entrepreneurs (8,3% are) 5

6. Taxes in Estonia

7. GDP by Economic Activity, 2012 Source: Statistical Office of Estonia

8. FDI inflow by countries and activity, stock as of 31.09.2012 Sweden27,3% Finland22,9% Netherlands10,6% Norway5,1% Russia4,2% Lithuania3,2% Cyprus3,0% Denmark2,5% USA2,4% Germany2,3% Other16,5% Financial and insurance activities25,7% Manufacturing16,9% Real estate activities14,1%14,1% Wholesale and retail trade13,1% Professional, scientific, technical activities9,1% Transportation and storage5,5% Information and communication3,1% Other12,5% Source: Bank of Estonia

9. Exports of Manufacturing Industry by technological intensity 2012 Source: Statistical Office of Estonia

10. Average gross wages by economic activity Source: Statistical Office of Estonia

11. State roll

12. Enterprise Estonia County development centres (15) Foreign representatives (10) AS KredEx Krediidikindlustus KredEx 12

13. Existing pieces @2009-2010 Pre-seedSeedSeries-ASeries-B Concept/Alpha Beta, business model, market test Launch, productionScale! Business competition: Ajujaht Incubation programs, accelerators Start-up grants, guarantees R&D grants VC funding: Estonian Development Fund Export grants Knowledge transfer Bits and pieces are there but few of them with really global growth company ambition VC funding: Baltic Innovation Fund Subordinated loans

14. Estonian Start-up Scene Largest number of start-ups per capita Accelerators Start-up Wise Guys Gamefounders The 2008 financial crisis was an extra boost Key focus in the near future – make them grow fast Brain Hunt ENTRUM Garage 48

15. Start-up Estonia – „umbrella“ program for high-growth start-ups Pre-seed phase Generation of biz ideas, developing biz cases, providing entrepreneurial challenges for students Work with university’s intellectual property For example: Biz competitions for wider audience Entrepreneurial, inspirational lectures bootcamps, etc Generation of biz ideas, developing biz cases, providing entrepreneurial challenges for students Work with university’s intellectual property For example: Biz competitions for wider audience Entrepreneurial, inspirational lectures bootcamps, etc Seed phase Validating the biz concept Building the prototypes For example: “Start-up academy”, intensive mentorship- acceleration program Incubation programs Lectures and training on specific topics Validating the biz concept Building the prototypes For example: “Start-up academy”, intensive mentorship- acceleration program Incubation programs Lectures and training on specific topics Start-up phase Accelerating the most promising companies Internationalization For example: business accelerators (like Vigo) International networking projects Biz missions to target markets Accelerating the most promising companies Internationalization For example: business accelerators (like Vigo) International networking projects Biz missions to target markets

16. Business incubators Technology incubators in science parks: Tallinn - TehnopolTehnopol Tartu - Tartu Biotechnology Park, Tartu Science ParkTartu Biotechnology ParkTartu Science Park Creative Industries Incubators: Tallinn - ESA Creative IncubatorESA Creative Incubator Tartu - Tartu Centre for Creative IndustriesTartu Centre for Creative Industries Viljandi - Viljandi Creative Incubators FoundationViljandi Creative Incubators Foundation Other incubators: Tallinn - ESA incubator in Ülemiste, ESA incubator in KopliESA incubator in ÜlemisteESA incubator in Kopli Narva – Business Incubator Eagle NestBusiness Incubator Eagle Nest 16

17. Example: Innovation vouchers Target group: SMEs (only once per SME) Activities: buying services from HEIs and R&D institutions, patent offices and certified labs; 3200EUR per SME Option for cooperative projects between up to 5 SMEs; 15% of all projects, increasing trend Technology transfer offices have had a major role in promoting vouchers and university services to SMEs

18. Information Enterprise Estonia http://www.eas.ee/en KredEx http://www.kredex.ee/en/ County Development Centres http://www.eas.ee/et/eas/kontakt/maako ndlikud-arenduskeskusedhttp://www.eas.ee/et/eas/kontakt/maako ndlikud-arenduskeskused

19. Starting a business

20. Company Registration Portal 20

21. Company Registration Step 1: The entrepreneur logs onto the portal using an ID card Step 2: He or she fills in the necessary information Step 3: The founder or founders electronically sign the documents Step 4: Fees and share capital are transferred through the Internet Step 5: The entrepreneur sends the application with just one click All of the information is automatically sent to the courts and the Central Commercial Register, and a confirmation is received a few minutes later. Cross-borders Thanks to the introduction of cross-border digital signatures, Portuguese, Finnish, Belgian and Lithuanian citizens can also register their companies in Estonia and vice-versa. Potential users are up to 20 million. 21

22. 22 All you have to have: Computer Internet access ID-card ID-card reader Valid PIN passwords

23. E-business register data exchange 23

24. 24 Centre of Registers and Information Systems e-Business Register It works! We can use this knowledge in any Internet portal Know-how First in EU Innovative Improves Estonian business environment Co-operation World record 18 min 3,5 sec Supporting single market Single points of contact Proof of concept Free license Cost saving Efficient Saves time Secure Co-operation

25. Use of ICT E-government E-Tax Board E-elections, Digital signature E-billing Mobile parking, Mobile payments Online company creation Digital prescription 90% electronic transactions, 88% of the population using Internet banking Submittance of annual reports electronically in Commercial register Census 2011, more than 60% of population counted electronically

26. Information ICT demo centre http://e-estonia.com/ Centre of Registers and Information Systems http://www.rik.ee/en 26

27. Opportunities for 2014-2020

28. Smart specialisation … ICT supporting other sectors Health technologies and services Resource efficiency

29. … and target groups Locomotives: export turn-over > 30 MEUR Key clients: export turn-over > 1,25 MEUR, value-added > 25k EUR/per Growth enterprises: sales turn-over > 200 000 EUR + yearly growth 20%

30. Main fields Competitive positionBusiness model Sales & marketing Development & production Smart specialisation 30

31. What do we offer our target groups? Support against comprehensive business-plan Long-term client management Exports in focus Increase of financial instruments

32. Estonia-Latvia cooperation Tourism between countries has been risen last years. INTERREG programs Cooperation between local governments Estonian export to Latvia – food and drinks, machinery- equipments, minerals Latvian export to Estonia - mineral fuels, food and drinks, machinery-equipments, chemistry products Latvia is 4th trade partner to Estonia BIF

33. Thank you! kaupo.sempelson@mkm.ee www.investinestonia.com www.tradewithestonia.com