Estonia Economy Profile - Doing Business 2020
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Doing Business 2020 Estonia
Economy Profile
Estonia
Page 1
Doing Business 2020 Estonia
Economy Profile of Estonia
Doing Business 2020 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety
mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the
transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling
processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for
insolvency
Employing workers Flexibility in employment regulation and redundancy cost
Page 2Doing Business 2020 Estonia
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and
regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life
cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for
starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across
borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings
of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages
economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector
researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation.
These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected
cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked.
The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most
indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013
(Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data
for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from
feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the
regulatory environment for business around the world.
To learn more about Doing Business please visit doingbusiness.org
Page 3Doing Business 2020 Estonia
Ease of Doing Business in DB RANK DB SCORE
Region OECD high income
Estonia
Income Category High income
18
Population 1,320,884 80.6
City Covered Tallinn
Rankings on Doing Business topics - Estonia
6 8
14 12
19 17
48
53 54
79
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Topic Scores
95.4 82.6 83.3 91.0 70.0 58.0 89.9 99.9 76.1 60.1
Starting a Business (rank) 14 Getting Credit (rank) 48 Trading across Borders (rank) 17
Score of starting a business (0-100) 95.4 Score of getting credit (0-100) 70.0 Score of trading across borders (0-100) 99.9
Procedures (number) 3 Strength of legal rights index (0-12) 7 Time to export
Time (days) 3.5 Depth of credit information index (0-8) 7 Documentary compliance (hours) 1
Cost (number) 1 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 2
Paid-in min. capital (% of income per capita) 13.1 Credit bureau coverage (% of adults) 22.9 Cost to export
Documentary compliance (USD) 0
Dealing with Construction Permits (rank) 19 Protecting Minority Investors (rank) 79 Border compliance (USD) 0
Score of dealing with construction permits (0-100) 82.6 Score of protecting minority investors (0-100) 58.0 Time to export
Procedures (number) 10 Extent of disclosure index (0-10) 8.0 Documentary compliance (hours) 1
Time (days) 103 Extent of director liability index (0-10) 3.0 Border compliance (hours) 0
Cost (% of warehouse value) 0.2 Ease of shareholder suits index (0-10) 6.0 Cost to export
Building quality control index (0-15) 11.0 Extent of shareholder rights index (0-6) 5.0 Documentary compliance (USD) 0
Extent of ownership and control index (0-7) 2.0 Border compliance (USD) 0
Getting Electricity (rank) 53 Extent of corporate transparency index (0-7) 5.0
Score of getting electricity (0-100) 83.3 Enforcing Contracts (rank) 8
Procedures (number) 5 Paying Taxes (rank) 12 Score of enforcing contracts (0-100) 76.1
Time (days) 91 Score of paying taxes (0-100) 89.9 Time (days) 455
Cost (% of income per capita) 138.7 Payments (number per year) 8 Cost (% of claim value) 17.3
Reliability of supply and transparency of tariff index (0-8) 8 Time (hours per year) 50 Quality of judicial processes index (0-18) 13.5
Total tax and contribution rate (% of profit) 47.8
Registering Property (rank) 6 Postfiling index (0-100) 99.4 Resolving Insolvency (rank) 54
Score of registering property (0-100) 91.0 Score of resolving insolvency (0-100) 60.1
Procedures (number) 3 Recovery rate (cents on the dollar) 36.1
Time (days) 17.5 Time (years) 3.0
Cost (% of property value) 0.5 Cost (% of estate) 9.0
Quality of the land administration index (0-30) 27.5 Outcome (0 as piecemeal sale and 1 as going 0
concern)
Strength of insolvency framework index (0-16) 13.0
Page 4Doing Business 2020 Estonia
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and
formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to
10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of
operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one
company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their
scores for starting a business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the
(number) procedures are used. It is assumed that any required information is readily available and that the
entrepreneur will pay no bribes.
• Preregistration (for example, name verification or reservation,
notarization)
The business:
• Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited
• Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is
company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the
statistical office.
• Obtaining approval from spouse to start a business or to leave
-Operates in the economy’s largest business city. For 11 economies the data are also collected for
the home to register the company
the second largest business city.
• Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of
registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle
products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily
Time required to complete each procedure (calendar days)
polluting production processes.
• Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits.
-Is 100% domestically owned.
• Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the
start on the same day)
company shares, two owners have 20% of shares each, and two owners have 15% of shares
• Procedures fully completed online are recorded as ½ day each.
• Procedure is considered completed once final document is -Is managed by one local director.
received -Has between 10 and 50 employees one month after the commencement of operations, all of them
domestic nationals.
• No prior contact with officials -Has start-up capital of 10 times income per capita.
-Has an estimated turnover of at least 100 times income per capita.
Cost required to complete each procedure (% of income per
-Leases the commercial plant or offices and is not a proprietor of real estate.
capita)
-Has an annual lease for the office space equivalent to one income per capita.
• Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet).
-Has a company deed that is 10 pages long.
• No professional fees unless services required by law or
commonly used in practice
The owners:
Paid-in minimum capital (% of income per capita)
-Have reached the legal age of majority and are capable of making decisions as an adult. If there
• Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old.
or up to 3 months after incorporation -Are in good health and have no criminal record.
-Are married, the marriage is monogamous and registered with the authorities.
-Where the answer differs according to the legal system applicable to the woman or man in
question (as may be the case in economies where there is legal plurality), the answer used will be
the one that applies to the majority of the population.
Page 5Doing Business 2020 Estonia
Starting a Business - Estonia
Standardized Company
Legal form Private Limited Company (osaühing or OÜ)
Paid-in minimum capital requirement EUR 2,500
City Covered Tallinn
Indicator Estonia OECD high income Best Regulatory Performance
Procedure – Men (number) 3 4.9 1 (2 Economies)
Time – Men (days) 3.5 9.2 0.5 (New Zealand)
Cost – Men (% of income per capita) 1.0 3.0 0.0 (2 Economies)
Procedure – Women (number) 3 4.9 1 (2 Economies)
Time – Women (days) 3.5 9.2 0.5 (New Zealand)
Cost – Women (% of income per capita) 1.0 3.0 0.0 (2 Economies)
Paid-in min. capital (% of income per capita) 13.1 7.6 0.0 (120 Economies)
Figure – Starting a Business in Estonia – Score
88.2 97.0 99.5 96.7
Procedures Time Cost Paid-in min. capital
Figure – Starting a Business in Estonia and comparator economies – Ranking and Score
DB 2020 Starting a Business Score
0 100
95.4: Estonia (Rank: 14)
94.1: Latvia (Rank: 26)
93.5: Finland (Rank: 31)
93.3: Lithuania (Rank: 34)
92.7: Denmark (Rank: 45)
91.3: Regional Average (OECD high income)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of
the scores for each of the component indicators.
Page 6Doing Business 2020 Estonia
Figure – Starting a Business in Estonia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
3.5 1.2
3
Cost (% of income per capita)
1
2.5
0.8
Time (days)
2
0.6
1.5
0.4
1
0.2
0.5
0 0
1 2 *3
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 7Doing Business 2020 Estonia
Details – Starting a Business in Estonia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Check company name, submit the registration application to the Commercial Register and Less than one day EUR 145 regular
deposit initial capital (online procedure) registration or EUR 190
Agency : Commercial Registry expedited registration
The entrepreneur can check proposed names online at www.rik.ee. The law provides that the
company business name shall be clearly distinguishable. It is also possible for entrepreneurs to
deposit the initial capital in a bank via online banking as part of company registration process at
the Commercial Register.
The costs of registration into the Commercial Register are EUR 145 for regular registration or
EUR 190 for expedited registration.
A separate registration with the National Social Insurance Board, which gets its information from
the Estonian Tax and Customs Board, is not required. Health insurance in Estonia is through a
compulsory scheme under which employers are obliged by law to pay social tax (the source
revenue for health insurance) for their employees. The rate of social tax is 33% of the taxable
amount. This tax must be paid by the tenth day of the month following the taxable period, and the
corresponding tax return must be submitted to the local Tax and Customs Board office of the
residence or seat of the payers of social tax by the same date.
If the share capital is higher than EUR 25,000 the entrepreneur needs to deposit it in a bank.
However, if the decided share capital is not over EUR 25,000, it can be established at the
memorandum of association that the shareholders are not obliged to make pre-payments for the
shares.
In that case a shareholder does not make a payment for the share, it will be personally liable to
the company in the amount of his/her unpaid share contribution. In the last year, more than 70% of
the companies were founded without making pre-payments.
In order to be able to use a start-up bank account (opened for paying in the initial share capital) for
the company's day-to-day activities the management board member(s) of the company (after the
incorporation process has been completed) has/have to personally apply (at the commercial bank)
for transformation of the start-up bank account of the company into a regular current account.
According to the Money Laundering and Terrorist Financing Prevention Act which was adopted 26
October 2017, all Estonian undertakings must disclose data on their beneficial owners to the
public registry starting from 1 September 2018. The beneficial owner information is submitted in
the same service with incorporation registration and it is free of charge. The other option is to
submit the information of the beneficial ownership by the notary, which would incur additional
notary fees.
2 Register for VAT at the Estonian National Tax Board 3 days no charge
Agency : Estonian National Tax and Customs Board
The company must register itself as VAT payer if the taxable turnover of the company, excluding
imports of goods, exceeds EUR 40,000, as calculated from the beginning of the calendar year.
The VAT Act is available at https://www.riigiteataja.ee/en/eli/ee/527022014003/consolide/current
The company’s management board must file an application for company registration, making the
company liable for VAT with the Tax and Customs Board, within 3 days as of the date on which the
taxable turnover of the company. The tax authority shall register a person as a taxable person by
entering the data concerning the person in the register of taxable persons as on the date on which
the registration obligation arose, within five working days as of the receipt of the application.
Registration may be (and in the practice, often is) affected immediately after establishment.
According to subsection 20(1) of the Value-Added Tax Act, an application for registration may be
submitted through the information system of the commercial register in a digitally signed format or
applied to a notary for the preparation of an application and submitted thereof through the
information system of the e-notary.
3 Register employees with the Employment Register Less than one day no charge
Agency : Estonian Tax and Customs Board (online procedure,
On 1 July 2014 the amended Taxation Act establishing the employment register, where all the simultaneous with
natural and legal persons that work are required to register the persons employed by them with previous procedure)
the Estonian Tax and Customs Board, entered into force. Since that moment the employers are
not required to submit the data on the employed persons to the Estonian Health Insurance Fund.
Commencement of the employment must be recorded latest by the moment when an employee
commnces the work. When terminating or suspending the employment, employers have ten days
to record the termination or suspension as of the day of suspension or termination of the
employment.
Takes place simultaneously with previous procedure.
Page 8Doing Business 2020 Estonia
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications,
requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building
quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional
certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction
company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining all necessary
clearances, licenses, permits and certificates
The construction company (BuildCo):
• Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest
inspections
business city. For 11 economies the data are also collected for the second largest business city.
• Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a
licensed architect and a licensed engineer, both registered with the local association of architects
• Registering and selling the warehouse after its completion
or engineers. BuildCo is not assumed to have any other employees who are technical or licensed
Time required to complete each procedure (calendar days) experts, such as geological or topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse upon its
• Does not include time spent gathering information completion.
• Each procedure starts on a separate day—though procedures
that can be fully completed online are an exception to this rule The warehouse:
• Procedure is considered completed once final document is - Will be used for general storage activities, such as storage of books or stationery.
received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6
square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be
• No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100%
owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Cost required to complete each procedure (% of income per
- Will have complete architectural and technical plans prepared by a licensed architect. If
capita)
preparation of the plans requires such steps as obtaining further documentation or getting prior
• Official costs only, no bribes approvals from external agencies, these are counted as procedures.
- Will take 30 weeks to construct (excluding all delays due to administrative and regulatory
Building quality control index (0-15) requirements).
• Quality of building regulations (0-2)
The water and sewerage connections:
• Quality control before construction (0-1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water
• Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage
• Quality control after construction (0-3) infrastructure, a septic tank in the smallest size available will be installed or built.
- Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow
• Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and
• Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the year; will be 1
inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.
Page 9Doing Business 2020 Estonia
Dealing with Construction Permits - Estonia
Standardized Warehouse
Estimated value of warehouse EUR 952,215.50
City Covered Tallinn
Indicator Estonia OECD high income Best Regulatory Performance
Procedures (number) 10 12.7 None in 2018/19
Time (days) 103 152.3 None in 2018/19
Cost (% of warehouse value) 0.2 1.5 None in 2018/19
Building quality control index (0-15) 11.0 11.6 15.0 (6 Economies)
Figure – Dealing with Construction Permits in Estonia – Score
80.0 77.8 99.1 73.3
Procedures Time Cost Building quality control index
Figure – Dealing with Construction Permits in Estonia and comparator economies – Ranking and Score
DB 2020 Dealing with Construction Permits Score
0 100
87.9: Denmark (Rank: 4)
84.9: Lithuania (Rank: 10)
82.6: Estonia (Rank: 19)
75.9: Finland (Rank: 42)
75.6: Regional Average (OECD high income)
73.5: Latvia (Rank: 56)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores
are the simple average of the scores for each of the component indicators.
Page 10Doing Business 2020 Estonia
Figure – Dealing with Construction Permits in Estonia – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
0.14
100
0.12
Cost (% of warehouse value)
80
0.1
Time (days)
60 0.08
0.06
40
0.04
20
0.02
0 0
1 *2 *3 *4 5 6 7 8 9 10
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 11Doing Business 2020 Estonia
Figure – Dealing with Construction Permits in Estonia and comparator economies – Measure of Quality
14 13.0
12.0 11.6
12 11.0 11.0
10.0
Index score
10
8
6
4
2
0
Estonia Denmark Finland Latvia Lithuania OECD
high
income
Details – Dealing with Construction Permits in Estonia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain project clearance from Fire Department 30 days no charge
Agency : Fire Department
According to the Rescue Act of 2010, obtaining fire safety clearance for the building project from
the National Rescue Service Agency or a local government rescue service should take 10 days.
However in practice it takes 30 days. If the building project does not conform to the fire safety
rules, the Rescue Service can decide to give on average five workdays to eliminate deficiencies.
2 Obtain project clearance from Environment Department 29 days no charge
Agency : Environment Department
The Environmental Impact Assessment and Environmental Management System Act entered into
effect on April 3, 2005, providing legal bases and procedures for assessing likely environmental
impact, organization of eco-management and audit schemes, and the legal bases for awarding
eco-labels to prevent environmental damage.
The environmental impact shall be assessed upon application for, or application for amendment
of, a development consent (a building permit or a permit for the building use), if the proposed
activity, which is the basis for the application for, or the amendment of, the development consent,
potentially results in significant environmental impact. A person who proposes an activity and
intends to carry it out shall organize an environmental impact assessment and carry all the
resulting expenses.
It is up to the local municipality to decide whether it is at all necessary to assess the environmental
impact of the project. There are two types of grounds for requiring an environmental impact
assessment to be carried out. First of all there are instances in which it is obligatory to conduct
environmental impact assessment. The hypothetical warehouse project should not qualify under
this category. The second category is such that the local municipality is required to consider
whether an environmental impact assessment is needed or not and if the local municipality
decides that it is necessary, it must give reasons for such a decision. The hypothetical warehouse
project might qualify under this category if for example considered to be (a part of) an industrial
area development. Besides the fact that it is in hands of municipality to make a decision, there are
no clear definitions on what does not exactly fall into category of projects that do not qualify for
Environmental Impact Assessment (EIA). It is likely BuildCo would need to obtain a clearance but
not the full scale EIA approval.
The Environmental Impact Assessment and Environmental Management System Act established
a term of 30 days for issuing a decision to approve the environmental impact assessment report.
The time may vary from 30 days to 1 year for actual EIA approval both from Municipality and
Environmental Supervisory Authority. It would also include a period of public hearing. However,
since we are just getting a project clearance for a relatively simple project, the procedure should
be completed within 30 days.
3 Obtain project clearance from Health Care Department 28 days no charge
Agency : Health Care Department
A clearance for the building project from the Health Care Department is not required. However,
this authority may be consulted by the local government before granting or refusing the building
permit. In practice, the local government may ask the applicant to personally communicate with
these authorities. There is no time limits for such communication. Further, the Health Care
Department has the right to perform state supervision over compliance with occupational health
requirements when the warehouse is put into use.
Page 12Doing Business 2020 Estonia
4 Obtain project clearance from Labor Inspections Department 27 days no charge
Agency : Labor Inspections Department
A clearance for the building project from the Labor Inspections Department is not required by law
in the stage prior to approval of the building permit. However, this authority may be consulted by
the local government before granting or refusing the building permit. In practice, the local
government may ask the applicant to personally communicate with these authorities. The Labor
Inspectorate has the right to perform state supervision over compliance with occupational safety
requirements during construction and when the warehouse is put into use. According to
Occupational Health and Safety Act, Paragraph 13, the employer is obliged to notify the local
department of the Labor Inspectorate in writing or in a format which can be reproduced in writing
before commencing activities. The notification can also be made also via the Customer Portal of
the Labor Inspectorate (https://eti.ti.ee/login/index?redir=true).
Paragraph 26 provides that after receiving the notification, an inspector has the obligation to carry
out an inspection. The employee of the Labor Inspectorate must set up the time of inspection with
the owner of the building, but in extraordinary situations, the inspector has the right to commence
supervision without informing the employer in advance.
5 Obtain building permit 25 days EUR 585
Agency : Municipality
To obtain a building permit from the Municipality, BuildCo must submit an application for a
construction permit and construction design documentation. According to the Building Act, the
local government must approve or refuse the issuance of a building permit within 20 days from the
date on which the application for the building permit and the building design documentation are
submitted. The Municipality conducts internal consultations with various departments and
agencies. However in practice, BuildCo is likely to follow up with these authorities.
Since June 2009, an energy certificate for the new building must be included in the application.
The energy audit is assumed to be conducted by the engineers of the newly built warehouse.
Prior to construction, BuildCo must notify the Municipality that construction will begin.
6 Receive on-site inspection by Municipality 1 day no charge
Agency : Municipality
During construction, the Municipality may monitor the work to verify compliance with the
requirements. If the construction does not comply with the applicable rules and regulations, the
construction will be stopped.
7 Receive on-site inspection by Estonian Technical Surveillance Authority 1 day no charge
Agency : Technical Surveillance Authority
According to the amendment of Building Act from January 1, 2008 Estonian Technical Surveillance
Authority may carry out state surveillance on construction sites, in addition to the surveillance
exercised by the Municipality. Before the building is being used or in case of an emergency in a
building that is already in use, the Estonian Technical Surveillance Authority does not have to
inform the owner about the inspection beforehand. In other situations, the owner must be notified
at least 24 hours in advance.
The number of inspections is not limited by law -- it is up to the discretion of the Technical
Surveillance Authority. However it should comply with the principles of good administration
practices. The costs of the evaluation services, of the expert assessment of building design
documentation and of the evaluation of construction works ordered to verify conformity to the
requirements are borne by the Technical Surveillance Authority. If it is established that the
construction works or building design documentation do not conform to the established
requirements, the owner of the construction works has to compensate the Technical Surveillance
Authority for the costs of the evaluation services ordered to verify conformity to the requirements,
including the costs of expert assessment or evaluation.
8 Apply for permit of use and request final inspection from Municipality 1 day EUR 64
Agency : Municipality
The local municipality has discretion as to which agencies can be engaged in the inspection
before the permit to use the building is issued. According to the law, the local municipality must
issue a permit to use the building (or issue a refusal to not use the building) within 30 days from
the date on which the last document necessary for the issue of the permit is submitted. BuildCo
would have the right to file an action to the administrative court in case the 30-day limit is not
respected. In practice though few companies file lawsuits against the authorities.
9 Receive final inspection from Municipality and obtain permit of use 25 days no charge
Agency : Municipality
The date and the time of the final inspection is agreed between the builder and the municipal
authority. The permit for use is not issued before the final inspection is carried out.
10 Obtain water and sewerage connection 20 days EUR 1,131
Agency : AS Tallina Vesi
Takes place simultaneously with previous procedure.
Page 13Doing Business 2020 Estonia
Details – Dealing with Construction Permits in Estonia – Measure of Quality
Answer Score
Building quality control index (0-15) 11.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0
of charge.
Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0
accessible website, brochure or pamphlet? (0-1) documents; Fees to
be paid; Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed engineer. 1.0
building regulations? (0-1)
Quality control during construction index (0-3) 3.0
What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in- 2.0
house engineer;
Unscheduled
inspections; Risk-
based inspections.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0
plans and regulations? (0-2) is done by
government agency.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 1.0
Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Architect or engineer; 1.0
(Latent Defect Liability or Decennial Liability)? (0-1) Professional in
charge of the
supervision;
Construction
company.
Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0
problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain
insurance .
Professional certifications index (0-4) 1.0
What are the qualification requirements for the professional responsible for verifying that the architectural plans University degree in 0.0
or drawings are in compliance with existing building regulations? (0-2) architecture or
engineering.
What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 1.0
2) years of experience;
University degree in
engineering,
construction or
construction
management.
Page 14Doing Business 2020 Estonia
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally,
the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data
collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the
electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining all necessary
clearances and permits
The warehouse:
• Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods.
inspections
- Is located in the economy’s largest business city. For 11 economies the data are also collected for
• Obtaining external installation works and possibly purchasing the second largest business city.
material for these works - Is located in an area where similar warehouses are typically located and is in an area with no
physical constraints. For example, the property is not near a railway.
• Concluding any necessary supply contract and obtaining final
supply - Is a new construction and is being connected to electricity for the first time.
- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square
Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet).
• Is at least 1 calendar day The electricity connection:
• Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-
• Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
- Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution
• Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the
prior contact with officials
warehouse is located and requires works that involve the crossing of a 10-meter road (such as by
excavation or overhead lines) but are all carried out on public land. There is no crossing of other
Cost required to complete each procedure (% of income per
owners’ private property because the warehouse has access to a road.
capita)
- Does not require work to install the internal wiring of the warehouse. This has already been
• Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base.
• Value added tax excluded The monthly consumption:
The reliability of supply and transparency of tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours
• Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts
(assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours
• Tools to monitor power outages (0–1)
(kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
• Regulatory monitoring of utilities’ performance (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for
the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.
• Financial deterrents limiting outages (0–1)
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial warehouse in case
study
*Note: Doing Business measures the price of electricity, but it is
not included in the ease of doing business score nor in the ranking
on the ease of getting electricity.
Page 15Doing Business 2020 Estonia
Getting Electricity - Estonia
Standardized Connection
Name of utility Elektrilevi OÜ
Price of electricity (US cents per kWh) 10.3
City Covered Tallinn
Indicator Estonia OECD high income Best Regulatory Performance
Procedures (number) 5 4.4 3 (28 Economies)
Time (days) 91 74.8 18 (3 Economies)
Cost (% of income per capita) 138.7 61.0 0.0 (3 Economies)
Reliability of supply and transparency of tariff index (0-8) 8 7.4 8 (26 Economies)
Figure – Getting Electricity in Estonia – Score
66.7 68.3 98.3 100.0
Reliability of supply and transparency of
Procedures Time Cost
tariff index
Figure – Getting Electricity in Estonia and comparator economies – Ranking and Score
DB 2020 Getting Electricity Score
0 100
92.9: Lithuania (Rank: 15)
90.2: Denmark (Rank: 21)
89.0: Finland (Rank: 24)
85.9: Regional Average (OECD high income)
83.3: Estonia (Rank: 53)
82.3: Latvia (Rank: 61)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the
scores for all the component indicators except the price of electricity.
Figure – Getting Electricity in Estonia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
90 120
80
Cost (% of income per capita)
100
70
60 80
Time (days)
50
60
40
30 40
20
20
10
0 0
1 2 *3 4 5
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
Page 16Doing Business 2020 Estonia
reflected here, see the summary below.
Figure – Getting Electricity in Estonia and comparator economies – Measure of Quality
8.2
8 8 8
8
7.8
Index score
7.6
7.4
7.4
7.2
7 7
7
6.8
6.6
6.4
Estonia Denmark Finland Latvia Lithuania OECD
high
income
Page 17Doing Business 2020 Estonia
Details – Getting Electricity in Estonia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to Elektrilevi OÜ and await estimate and technical conditions 12 calendar days EUR 0
Agency : Elektrilevi OÜ
After determining the fuse size and the location of the subscription shield the customer submits an
application for a connection.
The application can be submitted in person, by e-mail and through e-services on the utility's
website. After submitting the application, a technical solution based on the data in the application
and a contract offer are presented to the customer by Elektrilevi OÜ. . There is an external
inspection during this time period by Elektrilevi OÜ but no one from the applicant’s party is
required to be present during the inspection.
2 Pay estimate and await completion of external works by Elektrilevi OÜ 75 calendar days EUR 20,848
Agency : Elektrilevi OÜ
Once the estimate is received the connection agreement together with the supply contract can be
concluded at the customer service centre. After the conclusion of the contract, an invoice for
making the first installment payment is sent.
Once the fee is received, the necessary works for the connection are carried out by Elektrilevi OÜ.
The customer is notified of the completion of the external works and is presented with the second
installment for the connection fees which must be paid within 14 days.
3 Receive internal wiring inspection by independent inspector 3 calendar days EUR 350
Agency : Internal wiring inspector
According to the Electrical Safety Act, an independent electrical inspector with a special permit for
internal wiring inspections, must conduct an inspection of the internal wiring to check for
compliance with the law. If the internal wiring is in compliance and conforms to the requirements,
the independent electrical inspection issues a notice on the conformity, whichis submitted to the
customer service centre or sent by post to Elektrilevi OÜ
4 Sign supply contract with electricity retailer 2 calendar days EUR 0
Agency : Electricity retailer
When the connection fee is paid, the customer can conclude a network and electricity supply
contract. Supply contract can be concluded with any supplier of electricity operating in Estonia's
competitive market.
5 Await final connection from Elektrilevi OÜ 2 calendar days EUR 5,212
Agency : Elektrilevi OÜ
Once the supply and the connection contracts are signed and the internal wiring tests are
completed, the building will be connected to the power supply network.
Takes place simultaneously with previous procedure.
Page 18Doing Business 2020 Estonia
Details – Getting Electricity in Estonia – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 8
Total duration and frequency of outages per customer a year (0-3) 3
System average interruption duration index (SAIDI) 0.3
System average interruption frequency index (SAIFI) 0.2
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes
Financial deterrents aimed at limiting outages (0-1) 1
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online https://www.elektrilevi.ee/
en/abi/hinnakirjad-
tingimused-vormid-
aruanded
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 19Doing Business 2020 Estonia
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a
building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality
of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access
to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the
(number) transaction, the property and the procedures are used.
• Preregistration procedures (for example, checking for liens, The parties (buyer and seller):
notarizing sales agreement, paying property transfer taxes)
- Are limited liability companies (or the legal equivalent).
• Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits)
• Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the
municipality) second largest business city.
- Are 100% domestically and privately owned.
Time required to complete each procedure (calendar days) - Perform general commercial activities.
• Does not include time spent gathering information
The property (fully owned by the seller):
• Each procedure starts on a separate day - though procedures
- Has a value of 50 times income per capita, which equals the sale price.
that can be fully completed online are an exception to this rule
- Is fully owned by the seller.
• Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years.
received - Is registered in the land registry or cadastre, or both, and is free of title disputes.
• No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its
official limits), and no rezoning is required.
Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two-
value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse
is 10 years old, is in good condition, has no heating system and complies with all safety standards,
• Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be
taxes).
transferred in its entirety.
• Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase.
excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind.
- Will not be used for special purposes, and no special permits, such as for residential use,
Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required.
• Reliability of infrastructure index (0-8) - Has no occupants, and no other party holds a legal interest in it.
• Transparency of information index (0–6)
• Geographic coverage index (0–8)
• Land dispute resolution index (0–8)
• Equal access to property rights index (-2–0)
Page 20Doing Business 2020 Estonia
Registering Property - Estonia
Indicator Estonia OECD high income Best Regulatory Performance
Procedures (number) 3 4.7 1 (5 Economies)
Time (days) 17.5 23.6 1 (2 Economies)
Cost (% of property value) 0.5 4.2 0.0 (Saudi Arabia)
Quality of the land administration index (0-30) 27.5 23.2 None in 2018/19
Figure – Registering Property in Estonia – Score
83.3 92.1 97.0 91.7
Procedures Time Cost
Quality of the land administration index
Figure – Registering Property in Estonia and comparator economies – Ranking and Score
DB 2020 Registering Property Score
0 100
93.0: Lithuania (Rank: 4)
91.0: Estonia (Rank: 6)
89.9: Denmark (Rank: 11)
82.3: Latvia (Rank: 25)
79.0: Finland (Rank: 34)
77.0: Regional Average (OECD high income)
Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of
the scores for each of the component indicators.
Page 21Doing Business 2020 Estonia
Figure – Registering Property in Estonia – Procedure, Time and Cost
Time (days) Cost (% of property value)
0.35
16
0.3
Cost (% of property value)
14
0.25
12
Time (days)
10 0.2
8
0.15
6
0.1
4
0.05
2
0 0
1 2 3
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 22Doing Business 2020 Estonia
Figure – Registering Property in Estonia and comparator economies – Measure of Quality
35
30 27.5 28.5
26.5
24.5 23.2
Index score
25 22.5
20
15
10
5
0
Estonia Denmark Finland Latvia Lithuania OECD
high
income
Details – Registering Property in Estonia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 A notary prepares the Sale-purchase Agreement & the Agreement on Transfer of the 9 days EUR 2,793.97; (Notary fee
Ownership of the Real Estate, and the parties sign it at the notary’s office according to the Notary
Agency : Notary Fees Act (Part 3 Article 22)
It is mandatory that a notary public notarizes all transactions related to the transfer of real estate. is EUR 958.65 + 0.14% of
The parties may prepare the sale and purchase agreement following the laws. However, the
the amount of the
notary will review it, and if the agreement is not in accordance with the law, the notary will amend
transaction value
the agreement or ask the parties to modify the agreement, since the notary is financially liable for
exceeding EUR 639,120.
any potential mistakes or law violations.
As this is a case of a
Firstly, parties need to make an appointment with a notary and provide the notary relevant bilateral transaction the
information. Notaries prepare the contract agreement. The notaries use the E-Notary program to notary fee for certifying the
obtain contract templates and necessary data about the parties and the object of a transaction transaction is double the
from different registers. By entering a personal identification code or the name of a person in the full fee)
E-Notary program, the program finds information on respective individuals. Upon the entry of the
registered immovable number, the E-Notary program also finds data related to the registered
properties. Once the contract is signed at the meeting, the notary makes a digital copy of the
contract, and the contract is forwarded electronically to the Land Register.
2 Payment of the state fee (stamp duty) at a commercial bank Less than one day, EUR 1,523.54; (If the
Agency : Commercial Bank online transaction value is more
The state fee for making the changes in the Land Register must be paid prior to applying for than EUR 639,120, the full
registration. state fee rate of 0.16% of
the transaction value will
apply but not more than
EUR 2,560). (Appendix 2,
State Fees Act of
01.01.2015))
3 A notarized application is filed to the Land Register and corresponding entries are made to 8 days Already paid in Procedure
the Land Register 2
Agency : Land Register
The notarized application to the Land Register is filed to transfer the ownership of the real estate
to the buyer in the Land Register Book. As of June 1, 2007, this application can be filed online
through the "e-notary" system which allows the notary to submit the application electronically
without using any paper application. Computerization of property records at the Land Registry
have been ongoing for a few years has finally been completed at the end of 2008. Land Register
shall publish a register notice regarding a Real Estate, which has not yet been entered in the Land
Register only before opening a register part for an immovable in the register. The notice is
published in the official publication Ametlikud Teadaanded and, if necessary, in any other manner
available to the persons concerned. In case the Real Estate is already registered in the Land
Register (as in this case), no publication is necessary. The documentation shall include: (i)
Notarized Sale Purchase Agreement and Agreement of the Transfer of the Ownership of Real
Estate (obtained in Procedure 1). (ii) Receipt of payment of state fee (obtained in Procedure 2)
Takes place simultaneously with previous procedure.
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