Environment for Investments
Introduction toViljandi County
- Population: 47476 inhabitants
- Area : 3422 km²
- Density: 14,4 people per km²
- County centre: Viljandi town
- Municipalities – 3 towns and 9 rural municipalities
- County has the 6th place in population and the 4th place on area in Estonia
- More then 90% of County's population are Estonians
- Primary sector has 13% in county (Estonian average about 4% ).
- Secondary sector has more then 35% in county (Estonian average a bit more then 30%)
- Viljandi County has well-known companies like AS Ekseko, AS Viljandi Aken ja Uks, AS Toom Tekstiil, AS Viljandi Metall, AS Kolmeks ja AS Hansa Candle.
Most important sectors (or industries):
- Wood processing, wooden products for construction and furniture industry, furniture production
- Metal processing, production of metal product and engineering
- Production of textile, sewing and leather production
- Agriculture and food industry
Viljandi County has a very good road access to all major towns in Baltics, e.g.
- the distance from Viljandi to Tallinn is 160 km
- the distance from Viljandi to Riga, in Latvia is 240 km
The nearest railway stations are
- for passengers in Viljandi and
- for commercial needs in Valga (80 km)
The nearest airports are
- Regional airport nearby Tartu (80 km)
- International airport in Tallinn (160 km)
- International airport nearby Riga, in Latvia (250 km)
The nearest seaports are
- In Pärnu (100 km)
- In Tallinn (160 km)
- In Riga, Latvia (240 km)
5 good reasons to invest/ to build your business/ to expand your business in Viljandi County:
- Geographical position on crossroad from north to south and east to west – well established road network inside the county is connecting us with important areas in Estonia and Baltics
- Good access to commercial and passenger seaports, airports and railway – international and regional connections in Tallinn, Tartu, Pärnu, Valga and Riga, Latvia
- Suitable cost level for starting a new production facility – relatively low labour and overall costs, support from regional competence centres and education network to educate people
- Availability and access to the production land - there are available several industrial areas/parks in the Viljandi town and surrounding areas with more than 50 lots, also more in other areas of county, decision making is fast and bureaucracy is low
- Long term tradition in most important industrial sectors – allows fast and effective networking with existing players on the field
- Estonia covers an area of 45 227 sq km neighboring Finland, Sweden, Latvia and Russia.
- 50% of Estonian land is covered by forests.
- Estonian climate is humid and temperate.
- 30% of Estonia's 1,34 million population lives in the capital Tallinn.
- Estonia is among the least densely populated countries in the world.
- Estonians are Finnic people with the Estonian and Finnish languages sharing many similarities. Average income 865 EUR
- Estonia is a country located at the heart of the Baltic Sea Region - Europe's fastest-growing market of more than 90 million people.
- Since joining the European Union and NATO in 2004, Estonia has experienced phenomenal economic growth. Today, Estonia´s government debt is among the lowest in Europe.
- Estonia is accessible, both from a logistical and social point of view - Tallinn is within 3 hours flight from major European capitals.
- Also, as a front-runner is applying modern IT solutions, communications technology makes distances in Estonia irrelevant.
- Estonia is ranked among the top 25 out of all countries in the Ease of Doing Business index by The World Bank Group.
- The Estonian cost level is gradually converging with the surrounding European Union, but still there are meaningful differences.
- Estonian taxes are low and simple, and labour costs are third of those in Nordic counties.
- Foreign investors have played a decisive role in building the Estonian economy
Electricity and power network
Estonian Power System today is the compound complex, where Narva oil shale fired power plants, Iru combined heat and power plant (near Tallinn), wind parks and restored hydro plants work together.
Estonian Power Grid is connected with Russian, Latvian and with a maritime cable (300 MW) to Finnish (Nordic Grid). Second cable link project (600 MW) has been approved and will be operational by 2014.
The largest energy provider in Estonia is Eesti Energia, a 100% state-owned company. There are four more companies able to provide energy sales services.
The price of electricity is comprised of four components: electricity, network service, renewable energy support, and excise duty.
In May 2013, the average price per megawatt-hour on the open market was 6.71 euro cents.
Electricity price and network service calculators are available on the web page of Eesti Energia. These enable the calculation of power expenditures based on applicable packages, and can offer the most cost-efficient price package for the given data: https://www.energia.ee/en/elektri-turuhind
Corporate income and other taxis
Corporate income taxation
The moment of corporate income taxation is shifted until the distribution of profits in Estonia. Period of taxation for legal entities and non-residents with registered permanent establishments in Estonia is one calendar month. Corporate income tax rate distribution in Estonia is in the year 2012– 21/79 of the net amount.
There is 20% VAT (value added tax) on imported capital, equipment and supplies from countries outside European Union , e.g.Norway, Russia, U.S.A, Canada, etc. The reduced rate is 9% and 0% in some cases.
The selection of local tax rates in Estonia are as follows:
Land tax is levied on the taxable value of all land (other than that which is specifically exempt) based on an official valuation. The owners of the land are liable to land tax. The annual land tax rate varies between 0.1% and 2.5% of the assessed value of the land. The council of the local authority is authorised to establish the rate of land tax.
Excise duties are levied on tobacco, alcoholic beverages, fuel, electricity and packages.
Social security and retirement taxes
Employers registered in Estonia (including permanent establishments of the foreign entities) must pay social tax on all payments made to employees, except on those specifically exempted by law.Currently only employers and individuals engaged in business are liable to make social tax contributions. Employees are not required to pay social tax.The rate of social tax is 33% (20% for social security and 13% for health insurance).
Unemployment insurance premiums
An unemployment insurance premium is withheld at a rate of 2% of the gross salary of the employee. In addition to this, employers pay the unemployment insurance premium at a rate of 1% of the sum of gross salaries monthly.
Funded pension payment
In 2011, a rate of a funded pension payment depends on the employee´s decision in 2010. If an employee had decided to continue making payments in 2010, funded pension payments are withheld at a rate of 2% in 2011. In all other cases, funded pension payments are withheld at a rate of 1% of the gross salary of the resident employee in 2011.
You can find further information about the Estonian system of pension payments on the website of AS Eesti Väärtpaberikeskus (Estonian CSD) http://www.pensionikeskus.ee/.
Income tax rate is – 21%, period of taxation for natural persons is a calendar year, annual basic exemption (non-taxable amount) per year 2012 is 3480 EUR