Minister Keldo noted that competition between countries for strategic business investments is growing. “The state needs to do everything it can to attract higher value-added jobs to Estonia and to increase its exports,” he said. “Today’s decision in support of attracting large-scale investment to Estonia is a very good start: it means well-paying jobs for people in our country and a smarter economy.”
The minister also pointed out that countries are taking over large-scale, knowledge-intensive companies by using, among other things, flexible financial support measures that can be rapidly deployed. “Estonia is becoming less competitive in this regard, unfortunately, which is why we need a new and much stronger support scheme that will prompt companies to bring their jobs and know-how here,” he said.
Under the plan, a 160 million euro grant for large-scale investments will be established for the period from 2025-2028, with fixed parameters. This will allow for the financing of around two projects per year, making a total of eight major investments.
“Each project must involve an investment of at least 100 million euros and create at least 30 direct jobs and 70 indirect jobs,” Minister Keldo explained. “We forecast that we will be financing an average of two projects per year, at an average cost of 200 million euros per project, of which a minimum of 40% or 80 million euros per project will reach the state in the form of tax revenue. And in addition to that, we will be boosting the knowledge intensity and competitiveness of the economy.”
Large-scale investments also help to create well-paying jobs, as all such jobs must offer at least the average salary in the sector.
The money from the support measure will be earmarked in a government reserve, to be used according to actual investment needs. The measure will not have a negative impact on the state budget position inasmuch as expenditure related to the subsidies will be offset against the corresponding revenue in the budget position.
Minister Keldo says that in addition to increasing the volume of direct subsidies, other measures and activities are planned that will make Estonia’s value proposition more competitive in attracting large investments. “Other factors play an important role in investment decisions too, such as the speed of planning and permit procedures, the availability of renewable energy in the necessary volumes and on reasonable terms, the labour force, the ability to attract foreign labour and the availability of capital,” he explained. “All of these are in the pipeline as well.”
The support measure, which will run from 2025-2028, will be managed by the Estonian Business and Innovation Agency and will focus on companies involved in exports.
More information about the measure will be made public shortly.
