Expansion to Estonia: A Complete Guide

If you are considering expanding your business internationally, Estonia could be a great destination for you. This small Northern European country offers a business-friendly environment, a highly educated workforce, and a strategic location between East and West. In this guide, we will walk you through the different options you have to establish your presence in Estonia, including Global PEO services, incorporating a company, and recruitment.

Why You Need to Be Interested in Expanding into Estonia

Estonia has a lot to offer to businesses looking to expand globally. Some of the key benefits of doing business in Estonia include:

  • Business-friendly environment: Estonia has a simple and transparent tax system, a digital infrastructure that makes it easy to do business online, and a government that is committed to supporting entrepreneurship.
  • Strategic location: Estonia is strategically located between Europe and Asia, making it an ideal hub for businesses that want to reach customers in both regions.
  • Highly educated workforce: Estonia has a highly educated and skilled workforce, with a strong focus on STEM education. The country also has a high proficiency in English, which makes it easy to communicate with international partners and clients.
  • Low labor costs: Compared to other European countries, labor costs in Estonia are relatively low, which makes it an attractive destination for companies that want to keep their expenses under control.

What Is Better for You, Global PEO Services or Incorporating Your Company?

When it comes to establishing your presence in Estonia, you have two main options: using Global PEO services or incorporating a company. Each option has its pros and cons, and the right choice for you will depend on your specific needs and goals.

Global PEO services allow you to hire employees in Estonia without having to set up a legal entity in the country. This can be a great option if you want to test the market or if you have a short-term project that requires local expertise. With Global PEO services, the PEO (Professional Employer Organization) will act as the legal employer of your Estonian employees, taking care of all the administrative tasks related to payroll, taxes, and benefits.

On the other hand, incorporating a company in Estonia will give you more control and flexibility over your operations in the country. By setting up a legal entity, you will be able to own assets, sign contracts, and take advantage of the local tax incentives. However, incorporating a company requires more time, money, and resources than using Global PEO services, and it also comes with more legal and regulatory responsibilities.

Global PEO in Estonia: What You Need to Know Before Expanding by This Way

If you decide to use Global PEO services to expand to Estonia, there are a few things you should know before getting started:

  • Choose a reputable Global PEO provider: Make sure you work with a reputable and experienced Global PEO provider that understands the local labor laws and regulations in Estonia.
  • Understand the costs: Global PEO services come with a cost, which typically includes a setup fee and a monthly fee per employee. Make sure you understand the costs upfront and factor them into your budget.
  • Know the limitations: Global PEO services come with some limitations, such as restrictions on the type of employment contracts you can offer and the benefits you can provide to your employees. Make sure you understand these limitations before committing to Global PEO services.

The Process of Global PEO Step by Step

If you decide to use Global PEO services to expand to Estonia, here is an overview of the process:

  1. Choose a reputable Global PEO provider that offers services in Estonia.
  2. Agree on the scope of services and the fees with the provider.
  3. Identify the employees you want to hire in Estonia and provide their details to the provider.
  4. The provider will sign an employment contract with your employees on your behalf and become their legal employer.
  5. The provider will take care of all the administrative tasks related to payroll, taxes, and benefits.
  6. You will supervise and manage your employees’ work, but the provider will be responsible for compliance with the local labor laws and regulations.
  7. You will receive one invoice from the provider that includes all the costs related to your employees in Estonia.


Expanding your business to Estonia can be a smart move if you are looking for a business-friendly environment, a strategic location, and a highly skilled workforce. Whether you decide to use Global PEO services, incorporate a company, or recruit employees locally, make sure you do your research, understand the costs and benefits of each option, and comply with the local laws and regulations. With the right approach, Estonia can be a great destination for your business expansion.

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