How Estonia is Becoming a Prominent Place for Expats and Business Owners Through Innovation

Jacquelyn Vadnais
Last Edited Feb 28, 2023

There are many countries in Eastern Europe that are often neglected by prospective investors and expats. One country that is a great example of this is Estonia. The reason that Estonia has mass appeal is that it has sophisticated innovation combined with a very low cost of living for expats. This culminated with the high quality of life that expats can live there makes for a very alluring destination that is not as discovered as of yet. When contemplating where to settle as an expat or start a global business, consider the following discussion about why Estonia may be the hidden gem that you are looking for: 

Living In Estonia As A Foreigner: Pros And Cons

You will be astounded by Estonia as a foreigner. This beautiful country tucked delicately away is a powerhouse when it comes to natural landscapes and competitive innovation.

Estonia, with all of its advantages and disadvantages, could be your next paradise home.

Living In Estonia Pros

1. The Education System And Quality Are Outstanding

Educating your kids in Estonia is one of the smartest decisions you can ever make. In 2021, Estonia bagged the top spot in the OECD leaderboards in primary education, specifically in reading, and bagged second place for science and third for mathematics.

Expats with children can be confident in the quality of education and the school system, as Estonia is one of the best countries in the world in terms of education. The unique learning system continues until university, with Tartu University being among the 500 top global universities in the world.

2. Estonia Offers Its Residents Free Public Transportation

Once you become a resident of Tallinn, you can start processing your personalized smart card, which you can use on public transportation. All the modes of public transport in Estonia—the buses, trams, and trains—are very efficient and inexpensive. They are comfortable and equipped with charging points and free Wi-Fi hotspots.

3. It Is An Environmentally Friendly Nation

Even if you are not an eco-warrior, you can’t help but be influenced by how conscious and environmentally friendly the Estonians are. They grow up aware of the importance of taking care of their environment, and you’ll be impressed by how seriously everyone takes recycling here.

The government offers cashback to support these green initiatives, like bringing empty bottles and cans to the “taaraautomaat”. You will receive a cashback voucher that you can use the next time you do your grocery shopping.

Estonia also has the cleanest air worldwide, so if you want a healthier environment for your family, this alone is a good deal.

Living In Estonia: Cons

1. It Is Freezing During The Winter

Experiencing your first winter in Estonia will help you decide if you can endure countless more, or if the biting cold is not for you.

In winter, temperatures in Estonia can drop to -4 °F (-20 °C), and because the country is located in the north, shorter and darker days are common.

On the bright side, you can try plenty of activities like skiing and sledding during these months.

2. There’s A Visible Gap Between Estonia’s Rich And Poor

Based on data from the OECD, there is a clear divide between the rich and poor in Estonia. The income of the top 20% of the population is six times that of the bottom 20%. Almost 18,000 people live in poverty

Only 40 people are identified as super rich in Estonia, and the owner of TransferWise, Kristo Käärmann, is one of Estonia’s wealthiest with a net worth of 258 million euros.

3. Learning Estonian Is Difficult

Learning any language is difficult, but Estonian is a different story. You can always get by in Estonia speaking English, but if you want to stay longer or even start a business there, it would be in your best interest to learn the language.

Be prepared for a nerve-wracking learning experience because, for one, the Foreign Service Institute has ranked Estonian as the 5th hardest language to learn, especially for English speakers. Imagine a language with 14 noun cases and 25 diphthongs. Good luck!

Cost Of Living In Estonia

The cost of living in Estonia is reasonable.

Some essential commodities are cheaper in Estonia—for example, rental costs are relatively low in this Baltic city, up to 62% cheaper than in the US. But as with most European countries, other day-to-day necessities, like baby clothes, cars, and specific groceries, are more expensive in Estonia.

Your monthly expenses vary significantly based on your lifestyle, but overall, most primary needs are more affordable in Estonia. Rent depends on the location and size, but in the capital, Tallinn, a one-bedroom apartment is around €480 ($513.48), and an apartment farther from the city costs around €360 ($385.11).

With a decent lifestyle and occasional treats, you can expect to spend an average of €1200 ($1283.70) monthly.

Best Places To Live In Estonia

1. Tallinn

Tallinn is a viable option for expats to stay because it is the capital city, where high tourism is anticipated, and because multinational corporations frequently settle here.

Opportunities abound, especially for foreigners fluent in languages other than English, Estonian, and Russian. They can easily find employment in the industries of customer service, engineering, and tech media, to name a few.

Tallinn is Estonia’s commercial and cultural hub, and despite the medieval old towns, it also has high-rise business buildings for Estonia’s highly digitized system.

2. Parnu

Parnu is a luxurious tourist destination for beach-loving expats. It has several beaches and parks that give off that relaxed and natural vibe, making it a favorite among tourists as well.

As a result, it has transitioned from being a 19th-century space into one thriving with world-class amenities like cocktail bars and spas. But don’t worry, you can still experience the mud bath houses that Parnu is famous for during your visit because they are still widely available in the city.

Compared to the capital, foreigners would have fewer employment opportunities here, but the tourism industry is thriving, and there’s always that demand for English speakers. The cost of living in Parnu is also relatively lower thanks to its laidback lifestyle.

3. Tartu

Tartu, with its energetic atmosphere both during the day and at night, is another top-rated place to live in Estonia. Since Estonia’s oldest university is located in this city, it is where the majority of students reside.

The energy of the youth, young expats, and digital nomads flocking into the country brings this ancient city back to life.

If you want to experience a laidback lifestyle, settle in Tartu. It has plenty of cafés and recreational areas that are huge bonuses for remote workers. Additionally, since research is at the heart of Estonia’s economy, foreigners can find lucrative job opportunities in the fields of technology, science, and education.

Estonia, The Digital Society

Estonia was the first country to introduce and use digital identity cards, allowing all residents to authenticate online quickly. The card also has tie-ups with companies like ISPs and public transportation and can be used as proof of residence and a health insurance card.

Estonia is a forerunner in using technology for the benefit and convenience of its citizens.

Why Is Estonia A Digital Country?

Estonia has earned a reputation as an advanced nation where almost all transactions are done online—voting, submission of tax returns, and even closing contracts. This is, in part, owing to an IC card system that the country has adopted, a mandatory ID for all of its residents.

Every corner of the country boasts technology and a glimpse of what’s to come from the future, like delivery robots, electric scooters, and even reliable 4G connections in the forests.

Starting A Business In Estonia As A Foreigner

For starters, yes, a foreigner can start a business in Estonia. This is made possible by the nation’s initiative to use its E-Residency program to draw technical profiles and digital startups.

This makes it possible for digital entrepreneurs to create their startups without actually having to reside in Estonia. Once you have your E-Residency ID card, you can establish your business in Estonia.

Starting A Business In Estonia: It’s Easy

Although you can still create and build your own business with this government-issued ID, securing your E-Residency is more complicated and will take longer.

E-Resident ID holders can establish their Estonian company in as little as a day, as the process is straightforward, hassle-free, and one that you can do online.

How To Open A Business In Estonia?

Here is the most straightforward approach to opening your business in Estonia:

1. Secure Your E-Residency ID

Apply online, pay the state fee of €100-120 ($106.97-128.37), and select the pickup location for your ID.

2. Choose Your Service Provider

You need to choose an Estonian contact representative from the e-Residency Marketplace. The average monthly cost is €30-150 ($32.09-160.46), including bookkeeping and other services.

3. Register Your Company

Register your company structure online at the e-Business Registry, and pay the company registration fee of €265 ($283.48).

4. Find A Business Banking Partner

Find a fintech business partner at the e-Residency Marketplace to ensure that all your banking needs are taken care of.

5. Be An Active Business Partner In The Estonian Community

Grow your network and be active in the e-Residency community.


As an expat, business owner, or simply someone who wants a cleaner and more relaxed environment, you might want to consider Estonia. If you are a digital junkie who loves everything about technology and how it can contribute positively to society, Estonia is where you should be!


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