Leading Lights


Tallinn! Estonia’s Got By: Fergal Hogan T


allinn is perhaps best known for its well-preserved Old Town, the area of streets, houses, churches and squares that have been developed from the 13th to 16th centuries, when it flour- ished as a Hanseatic trading centre. The city and Estonia in general are now becoming increas- ingly known as a centre of business and inno- vation. Due to long historic ties with German and Scandinavian cultures, Estonians have a de- cidedly Western business outlook. The rapid commercial development that followed the country’s independence from the USSR in 1991 has transformed Tallinn’s city centre, giving rise to dozens of new hotels, shopping centres, banks and offices. Companies such as Telia, Statoil, Coca-Cola and Ruhrgas have been lured to Tallinn because of its excellent location, busi- ness-friendly fiscal policy and telecommunica- tions infrastructure.


More than half of the companies operating in Estonia on foreign capital are located in Tallinn. The economy is closely linked to neigh- bouring Scandinavian countries. This has at- tracted extensive foreign investments, facilitated the acquisition of modern expertise and boosted trade. Estonia has a well-educated, skilled and multilingual labour force costing on average one third of Scandinavian labour prices. The Eston- ian tax system has a flat 21% rate for individu- als, which makes it one of the most liberal tax regimes in the world. Moreover, undistributed corporate profits are not subject to income tax- ation, regardless of whether they are invested or merely retained. Tax declarations are simple,


02. Night illumination of modern building in Tallinn. 30 New European Economy 01. Tallinn Estonia.


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