The Estonian Chamber of Commerce and Industry opposes three planned restrictions related to foreign labor

The Ministry of the Interior has drafted a bill to amend the Aliens Act, which on one hand reduces the administrative burden for both the foreigner and their employer, but on the other hand, introduces several new restrictions related to the employment of foreigners.

For short-term work in Estonia, a long-term visa will be required

Under the current law, all foreigners who are in Estonia temporarily on a visa or visa-free basis and whose short-term work in Estonia is registered with the Police and Border Guard Board can work in Estonia. However, according to the draft bill, in the future, a foreigner may only work in Estonia on the basis of a long-term, or D, visa.

The Chamber has suggested to the Ministry of the Interior to either exclude this change from the draft or to allow in the future that foreigners who are in Estonia on a D visa granted by another Schengen member state or on a visa-free basis can work in Estonia for a short period.

The Chamber is against the planned change because it extends the process of recruiting a foreigner by several weeks, as the foreigner must apply for a D visa from an Estonian foreign mission or locally in Estonia before starting work. Additionally, the change increases the costs for the foreigner or their employer, as the foreigner cannot start work immediately upon arrival in Estonia. Overall, this makes Estonia less attractive for foreign talent and increases the risk of illegal employment.

The employer must have prior economic activity to employ a foreigner

The Chamber is also critical of the proposed change requiring that an employer must have had actual economic activity in Estonia for at least six months prior to registering short-term employment, and at least 12 months for applying for a temporary residence permit for employment. For labor rental agents, prior economic activity must have been for at least 18 months. Currently, there is generally no requirement that an employer must have actual economic activity in Estonia before employing a foreigner.

According to the Chamber, this planned change reduces the attractiveness of Estonia's business environment, including its investment environment. For example, if a new company is established in Estonia with an investment of 100 million euros and 100 new jobs are created, of which 20 cannot be filled by local workers, then under the new rule, such a company would generally not be allowed to immediately hire foreigners due to the lack of previous economic activity in Estonia. The Chamber has proposed to the ministry to omit such a requirement from the law.

Only employers registered in the Estonian commercial register are allowed to employ foreigners

The Ministry of the Interior has also proposed changing the law so that in the future, only employers registered in the commercial register can employ foreigners. This means that branches not registered in the commercial register, as well as non-profits, foundations, and government and local government agencies, would not be able to employ foreigners. The Chamber believes this limitation is unreasonable and potentially violates the principle of equal treatment. Therefore, they have requested that this provision be omitted from the draft.

Reduction in the burden on the employer and the foreigner

Although there are some problematic provisions in the draft of the Aliens Act amendment, there are also several changes with positive effects. For example, the draft allows a foreigner and their inviter in Estonia to interact with Estonian authorities electronically through a single window principle and to transmit data and documents related to living and working in Estonia through the Police and Border Guard Board to the Tax and Customs Board, the Labour Inspectorate, and the Unemployment Insurance Fund. Additionally, various state agencies will have the right to exchange data about a foreigner's living, working, and studying in Estonia via the X-Road, which helps make the supervision of residence permits and visas misuse and illegal immigration more efficient.

Changes will come into effect no earlier than mid-2025

Most of the changes according to the draft will take effect on June 1, 2025. Changes requiring the development of databases will take effect on January 1, 2028, and January 1, 2029. 

Currently, it is not known to what extent the Ministry of the Interior will consider the Chamber's suggestions.