Planned Large Investment Support Sets Too High Investment Requirement
The Ministry of Economic Affairs and Communications recently published a draft regulation for large investment support, which would allow an Estonian company to apply for up to 20 million euros in support for an investment of at least 100 million euros. According to the Estonian Chamber of Commerce and Industry (ECCI), the minimum investment threshold should be reduced from 100 million euros to 30 million euros.
30 Million Euros Instead of 100 Million Euros
There have been very few investments in Estonia exceeding 100 million euros. Considering the current geopolitical situation and the European economic environment, it is unrealistic to expect a significant number of such large-scale investments in Estonia in the coming years. Even if business projects of this magnitude are currently known, recent practice has shown that many of these investments do not ultimately materialize in Estonia for various reasons.
To ensure that the support measure achieves its goal more effectively—contributing to export capacity and added value growth—ECCI has proposed lowering the investment requirement from 100 million euros to 30 million euros. Other conditions of the planned support would remain unchanged.
The Requirement to Create 30 New Jobs Should Be Reviewed
According to the draft regulation, recipients of the large investment support must create at least 30 new jobs as a result of receiving the support, with the average salary for each new position being at least equal to the national average salary.
Since such investments may involve a high degree of automation and digitalization, the requirement to create this many new jobs may not be appropriate. ECCI believes that a lower job creation requirement would still fulfill the purpose of the support.
Additionally, ECCI has requested that the ministry clarify whether the required average salary for new jobs should be at least equal to the industry’s average salary or Estonia’s national average salary. The chamber has also proposed specifying in the draft regulation that the salary criterion should be met based on the average salary of 30 jobs in the same sector, rather than each job being assessed individually.
It is currently unclear whether the ministry will consider ECCI's proposals and when the regulation will come into force.