Scaling tech team in Estonia: what you need to know

Estonia is a market that we have been working with for about 8 years now.

Whether you already tried to hire in Estonia or only considering it, this information will help you to make the right decision regarding hiring here.

Population

Estonia is quite a small country: its population is 1,3 mln people. As a result, networking is fairly easy: everyone knows everyone, and if not literally then at least through a couple of handshakes. Getting references about employees is easy too, as well as the company's publicity. On the flip side, one has to be mindful: everyone will find out about your successes, but also about your failures.

To expand the search, companies often relocate people from other countries to Estonia. Tech companies with over 100 people often have up to 20 different nationalities. In the past, Ukraine, Belarus and russia were the most popular areas to relocate from. Currently it’s South America, Africa and India.

Getting residency in Estonia with the most passports is usually not a very difficult process: all the details can be found on the official website.

It’s worth mentioning that the government has launched a famous e-residency programme that allows people from all over the world to register and manage a business in Estonia entirely online. 

Language

Most Estonians speak English fluently, and some of them (especially the older generation who was schooled during soviet times) also russian. Less, yet some people speak Finnish due to the geographical proximity.

English is a default communication and documentation language in most tech companies due to the fact that most of them become international very quickly.

Taxes

A flat rate of 20% income tax makes it easier to calculate and forecast the income.

The easiest way to understand taxes is to use this online calculator.

• Employer tax: 33,8%

• Employee tax: 20% income tax + 3,6% social security

Market for tech

Estonia is often called a land of unicorns, and it absolutely deserves this name. Regardless of its small population, as of today, 10 unicorn companies originated in Estonia: Skype, Playtech, Wise, Bolt, Pipedrive, Zego, ID.me, Gelato, Veriff and Glia. This makes it the number one “unicorns per capita” country in the world.

And besides, there are multiple products on their way to become unicorns. There’s a notion of a startup “mafia”: former employees of the unicorns turn into founders, investors, or C-level managers in other startups. Thus they initiate a new generation of tech companies that can also become unicorns.

All of this shows that the country has a very good entrepreneurial and investment climate, with the help of organizations like Garage48, LIFT99 and others.

More numbers and facts

• Probation period: 4 months

• Notice period: 1 month

• Vacation: 28 days

• Sick leave: starts on the 4th day of illness and covers 70% of the salary

As we can see, it’s possible to build successful global companies in a small country. Estonia offers highly qualified talent with previous experience working in startups and excellent English, which makes it one of the most attractive countries to build products.

Don’t hesitate to get in touch with Bee’s Knees if you have questions or need help with building a team in Estonia or elsewhere in Europe - we are ready to take on new projects!