On May 16 in 2024, the Estonian Investment Agency – also known by its stage name of Invest in Estonia –  celebrates its 30th anniversary. Here’s a look at the history and goals of foreign direct investments in Estonia, through the eyes of past and present leaders and longtime partners.

Founded in 1994, Invest in Estonia is a government agency dedicated to helping international companies find investment opportunities in Estonia. Today, world-class human capital, unique digital capabilities, and a competitive business environment make Estonia a smart, agile location for businesses with global ambitions. But what was the picture like three decades ago – and what does the future hold?

Diving into the history…

1994 was an action-packed year: Estonia made its debut in the Eurovision Song Contest, andJeff Bezos founded Amazon. Perhaps most importantly, the Estonian government established the Estonian Foreign Investment Agency. The Estonian kroon (1 EUR = 15,6466 EEK) was the currency at the time, Lennart Meri led as the President of Estonia, and Mart Laar was the Prime minister.

On May 16, 1994, the Estonian Foreign Investment Agency is established to provide a “single door” approach to attracting foreign direct investment (FDI) into the country. Jüri Sakkeus becomes the agency’s first director. In 1995, the agency gives out the first Invest in Estonia awards to recognise companies based on foreign capital for contributing to the Estonian economy. The first overall winner is Eesti Telefon, the country’s biggest telco. By 1996, companies from roughly 100 countries have invested in Estonia. Demonstrating the Estonian drive to adopt the newest technologies as early as possible, the agency also gains access to these crazy new things called “email” and a “website” around 1996. 

In 2000, the Estonian Foreign Investment Agency moves under the Enterprise Estonia umbrella. By the end of 2000, a total of 90,6 billion kroons of foreign investment has been made into Estonia (106% of the GDP). By 2008, Estonia has become one of the most successful countries in Europe and the world in terms of foreign investments, with the share of foreign investments in the country’s GDP as high as 71 percent. In 2011, Estonia adopts the euro. Local papers report a noticeable jump in foreign investments. Business services, electronics, ICT, machine industry, and logistics have become the focus areas.

In 2017, Work in Estonia, a program conducted by the Estonian Investment Agency, receives the IAC Award for the world’s best employment online campaign. Today, Work in Estonia has grown into a separate organisation under Enterprise Estonia. In 2020, Invest Estonia receives the United Nations Investment Promotion Award for Excellence in the Response to COVID-19 crisis. In 2022, Invest Estonia brings in €351M in direct foreign investments, an all-time high for the agency. In 2023, Invest Estonia secures €336M worth of foreign investment, creating more than 1,000 high-paying jobs. 

The earliEST adopters

Jüri Sakkeus, the founder and first director of the Estonian Foreign Investment Agency, as it was originally named in 1994, recalls the early days with fondness. “The environment was so supportive at that time,” he says of the founding days. “I remember going to a government session to present what this new agency was about. Prime minister Mart Laar was there, with a sparkle in his eye, saying he’d been waiting for an agency like this for a long time.”

The excitement and drive were tangible in the young republic. Known today for its agility and quick reactions to changing environments and demands, Estonia has been this way all along. “During a business seminar in Japan, a Japanese contact drew attention to the poor condition of the toilets at Tallinn Airport,” Sakkeus recalls one of his early overseas trips with the agency. Taking this to heart, President Lennart Meri promised the Japanese that he would hold his first press conference in the airport toilet upon his return to Estonia to draw attention to this glaring blemish on the country’s reputation. He did, and the rest is history – the toilets were renovated almost immediately, and Tallinn Airport has been consistently winning awards for its cosiness ever since.

Finding opportunities to elevate Estonia’s reputation on the global stage was the driving force behind the agency. Agu Remmelg, who was also with the agency from the very beginning and led it from 1998-2000, echoes the sentiment. “There was very much a sense of mission,” he recalls. “And always a feeling of being terribly proud to speak at conferences, introducing Estonia and the opportunities it had to offer.”

Over three decades, the work has paid off in spades, and Estonia has gone from the new kid on the block to a certified trailblazer. “When we started, we tried talking about Estonia in South Korea or Hong Kong. It was almost impossible,” Remmelg says. “No one had heard about us. Today, you can easily talk to the US technology sector or investors about Estonia’s competence and track record.”

One of the most famous examples of the agency’s knack for making international friends for Estonia is Singaporean entrepreneur Sonny Aswani. Aswani has been passionate about Estonia ever since his earliest contact with the Estonian Foreign Investment Agency in 1994. The friendship was initially facilitated by a move as seemingly simple as the agency’s agility and help with securing Estonian visas at unprecedented speeds – in the days of the fax machine. “It was the little things that made the big difference,” Aswani says. “Since then, we have invested no less than 250 million euros in this country.”

The smartEST investments powered by the bEST people (with AI securing the rear)

Over the past three decades, Invest in Estonia has played its part in helping Estonia evolve into a smart, agile investment hub that consistently ranks as a world leader in smart human capital, digital capability, and ease of doing business. 

“We don’t take this success for granted,” says Joonas Vänto, the agency’s current director. “With the landscape as competitive as it is, it’s crucial to keep innovating and blazing a trail. The Estonian Government prioritises flexible and need-based legislation to facilitate entrepreneurship, resulting in a transparent and nimble business environment, keeping Estonia among Central and Eastern Europe’s top investment destinations. Meanwhile, the Estonian Investment Agency continues to offer a high level of expertise combined with advanced digital tools and AI to make the process of investing here as smooth as possible.”

“Advanced digital tools” is not an overstatement – Invest Estonia has twice been included in IRCAI’s (The International Research Centre in Artificial Intelligence under the auspices of UNESCO) list of 100 most promising AI-related solutions for the benefit of humanity.

On the other side of Invest Estonia’s high-powered AI/human expertise combo, the aforementioned level of competence is personified in Riina Leminsky, Head of Global Network and Director of Business Development in the DACH region, who has been with the organisation for nearly twenty years.

“Foreign representatives have a crucial role as Estonian economic ambassadors, trusted confidants, and investment facilitators,” she says. “Our role is to act as a reliable and trustworthy partner, especially for foreign companies. We also help Estonian companies to find an investor or strategic partner for their growth. We are the first point of contact for foreign companies that already have or need to develop a business interest in Estonia that is sustainable and beneficial to Estonia’s economic development. We deliver confidence in our country and find opportunities for cooperation, whether economic or otherwise.”

The brightEST future: what’s next for Invest in Estonia

Anyone who has been following Estonia’s evolution at any point in the last three decades knows that being small has never stopped this country from thinking big. The Estonian Investment Agency carries the same principle, always aiming to punch above its weight and stay ambitious.

With resting on laurels out of the question, the objectives are clear:

• 2.8 billion euros: Between 2023 and 2030, Estonia aims for 2.8 billion euros of foreign investments.
• 8000 jobs: Foreign investors predict that at least 1000 new high-added-value jobs will be created yearly.
• 50%: By 2030, at least 50% of projects will be created with companies operating in the smart economy – R&D and/or innovation companies. The 2021 level was 18%.
• 40%: By 2030, at least 40% of investment projects will come to areas outside of Tallinn and Tartu. The 2021 level was 24%.
• 100%: By 2030, 100% of proactively secured foreign investment projects will be from the R&D,  innovation, and entrepreneurship focus areas, based on the large growth potential in those sectors. (In 2021, the level was 66%).