Estonia, Labour-market, Markets and Companies

"For several years, Estonian entrepreneurs have complained about a shortage or even lack of top specialists on the Estonian labor market. Due to its small size, Estonia does not train people for very specific professions, but hiring such people may be of key importance for the future development of companies," the finance minister said.

"However, hiring top specialists from abroad can turn out to be unreasonably costly as we are competing with countries where the salary level is already higher and there are support measures for entrepreneurs for hiring top specialists," Helme said.

"We are not talking here about supporting the introduction of cheap or even medium salary labor, but about the tops of their fields, whose knowledge and skills will benefit us," the minister added. "A support measure will enable companies to develop and thereby increase the economic growth of Estonia. If successful, the measure will contribute to the growth of the state's revenue and the increase of the added value created in Estonia."

On Thursday, the Cabinet gave its approval in principle to also start paying subsidies in Estonia to entrepreneurs who have recruited highly-paid foreign specialists, depending on the amount of the specialist's labor taxes. A person who has left Estonia to study or work abroad for a longer period of time may also turn out to be such a foreign specialists, which is why the measure would also help bring back Estonia's own top specialists.

The specific terms of the support will be developed by the Ministry of Finance and Ministry of Economic Affairs and Communications. The initial task is to design a support mechanism in such a way that it is a measure of income, not expense, for the state budget. When it comes to the measure, under consideration is also a support dependent on the amount of social tax paid from the salary of the foreign specialist and a fringe benefit exception on expenses concerning the employee's own as well as their family's relocation, education and medical services.

Similar measures are used by many countries, like Finland, Sweden, Denmark, Israel, France, Belgium, Spain, Austria and the Netherlands. Top specialists can be hired for at least six months, but the support would be limited to a maximum of five years. In addition, the specialist must not have been a tax resident of Estonia during a period of five years prior to them taking up the position of employment.