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After centuries of Swedish and Russian rule, Estonia attained independence in 1918. Forcibly incorporated into the USSR in 1940, it regained its freedom in 1991 with the collapse of the Soviet Union. Since the last Russian troops left in 1994, Estonia has been free to promote economic and political ties with Western Europe.
Update No: 266 - (27/02/03)
Cautious about the EU
The Estonian republic is to enter the EU in about eighteen months' time when things are going to change not all for the better and especially for the foreign investor. Estonia is far more liberal and free of red tape than the highly regulated economies of the EU. It has been fighting a rearguard action to avoid adopting all sorts of restrictions on trade and compliance with rules of the Common Agricultural Policy that are not necessarily as suitable for farmers in the Northern Baltic as for those in Southern Spain and Greece.
Paradise for foreign investors now
Estonia is a businessman's paradise - there is simply no corporation tax at all. Those developing a business or investing for the first time can simply reinvest, reinvest and reinvest again. Instead of paying 40% on profits in the UK and more in other EU countries nearby to Estonia, there you pay precisely - nothing.
Other attractions for foreigners are that everything is incredibly cheap still, although rapidly rising in price, and that few outside Scandinavia and Germany, those traditionally interested, realise what a superb place it is to operate - cheap wages and inputs of every sort, very low prices for office space or, indeed, property of any sort compared with neighbouring Finland, while having services of high standard, familiarity with English and a strong Protestant work ethic and public spirit. The mystery is why it is not better known outside the traditional investment community.
It is of course small, remote and cold for much of the year. But it has lovely medieval architecture and a long tradition of mercantile excellence. It has much in common with its attractive Scandinavian neighbours, to whose citizens it is a popular weekend destination, and whose corporations have become embedded in the economy.
In the eleven and a half years since independence Estonia has moved incredibly quickly to adapt itself to the demands of transparency in property laws. All real estate is registered so that there is no risk of "buying" some property which then turns out to belong to someone else. More than 1,200 manor houses dot the countryside. They were mostly built by Baltic German gentry in what was then part of Tsarist Russia, ranging from cool Palladian to neo-classical to mock-Gothic, but nearly all going for less than £60,000, less than many a cottage in remoter parts of England.
The Estonians at present set no limits on foreign buyers. But after it joins the EU in June 2004 Tallinn has indicated its intention to impose a moratorium lasting several years on foreign nationals purchasing land. Now is, therefore, the best time to invest in Estonian property.
Sales to West help boost Norma net profit by 9%
Estonian auto parts maker, Norma, posted a nine per cent rise in 2002 net profit to €12.4m due to a sales surge to the West, but analysts said 2003 could be bumpy due to a slump in Russia, New Europe reports.
Norma, who supplies safety belts and other car components, said in an unaudited results statement that sales to Western customers surged 69% last year, while sales to its main market Russia dropped sharply toward the end of 2002. Norma saw net sales rise 24% to €64.8m in 2002 for a pre-tax profit of €12.6m, up 1.1m from 2001. Norma is 51% owned by Swedish-American auto safety components producer,
Estonia selling 3 UMTS licences
For 4.5m Euro each, Estonia is selling three UMTS licences to three existing telecoms operators, Telecom.paper has reported.
A bill concerning this transaction has been approved by Estonia's parliament. The three operators involved are Eesti Telekom, an affiliate of TeliaSonera, Tele2 and Elisa's Radiolinja.
A fourth licence will be sold in a second round to the highest bidder. If one of the operators does not accept the price in the first round this licence will also be sold in the second round.
The licences are sold subject to the condition that the network covers 30 per cent of the population.
EU to help divert oil and coal transport from centre of Estonian capital
Tallinn will ban the rail transport of oil products and coal, constituting a danger to the environment as they pass through the city centre, in no more than four years, forcing the companies operating in Kopli and Paljassaare peninsulas to look for new ports.
Tallinn's deputy mayor, Toivo Ninnas, said that the city would tie the transport ban to the construction of a new 22-km railway section, which would run on the far side of Lake Ulemiste in Harjumaa District, 'Postimes' has reported.
The deputy mayor said that the port of Paldiski was also being extended and the construction of a new bypass would make it possible to take dangerous cargo coming from the eastern direction without going through the city centre.
Three companies transport oil products and coal through the city centre at present, of which Eurodek, transporting oil products to the Russian-Baltic port on Kopli peninsula, has the largest volume of transport. In addition, Scantrans transports oil products to the port of Hundipea at the head of Paljassaare peninsula and Petromax transports coal to the port of Paljassaare. Ninnas said that the city government would decide shortly whether to ban the transport of oil products and coal through the city centre in 2006 or 2007.
Jaan Uus, technology director of Scantrans, a company transporting about 800,000 tonnes of oil products a year, told Postimees that the company hoped that the city government would not introduce a complete ban on the transport of oil products in the city centre. "We would then have to close down and people would lose their jobs. We would not reroute our barrels," he added. Uus noted that Scantrans had invested nearly 100m kroons [US$7m] in the port and the company had 60 employees.
According to deputy mayor Ninnas, Eurodek, for example, was already making preparations to transfer its oil-product activity to the port of Muuga...
Ninnas said that the construction of the new railway section would be managed by the Railway Department. The state would fund a quarter of the amount and the EU's ISPA [Instrument for Structural Policies for Pre-Accession] would provide three-quarters of the funding.
Ninnas said that this year, a survey to make preparations for the construction of the bypass would be launched. He added that the survey would cost nearly 10m kroons [US$0.7m]. A quarter of the amount will be provided by the state and the rest by the international ISPA
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