See What Changes Are Coming Soon to the Aliens Act
On March 26, the Riigikogu adopted amendments to the Aliens Act. These include changes that reduce the administrative burden for the foreigner and their employer, as well as changes that impose new requirements for employing foreigners. Below is an overview of the most important changes for businesses.
Employer Must Have Prior Economic Activity for at Least Six Months
Starting January 1, 2026, the employer for whom a temporary residence permit is being applied must have had actual economic activity in Estonia for at least six consecutive months immediately before submitting the application.
Employers can prove actual economic activity with any evidence, including their own explanations and documents such as contracts, annual reports, certificates issued by competent authorities, and tax declarations.
The initial draft stated the employer had to have at least 12 months of prior economic activity, but at the suggestion of the chamber, the Riigikogu shortened this to six months. Also, at the chamber’s suggestion, the requirement for six months of prior economic activity was not included for registering short-term employment.
Collateral Requirement for Temporary Work Agencies Removed
A positive change for temporary work agencies is that, from January 1, 2026, the requirement to provide a financial guarantee equivalent to at least one month’s salary of the foreign worker is removed.
Instead, temporary work agencies must show actual economic activity in Estonia or another EEA member state for at least six consecutive months before employing a foreigner.
Initially, the draft required 18 months of prior economic activity, but the chamber proposed reducing it to six months.
Only Employers Registered in the Estonian Commercial Register May Employ Foreigners
From January 1, 2026, to register short-term employment in Estonia or obtain a temporary residence permit for employment, the employer must be registered in the Estonian Commercial Register. This means foreigners can no longer be hired by branches not registered in the Commercial Register.
This requirement does not apply if the foreigner’s employer is a public legal entity. In the future, a foreign employer can invite foreigners to work in Estonia only if it qualifies as free movement of services or posting from another member state.
New Exception: No Unemployment Insurance Fund Permit Required in Certain Cases
Soon, it will not be necessary to obtain a permit from the Unemployment Insurance Fund if a foreigner applies for a temporary residence permit for short-term work in Estonia under § 176² of the Aliens Act.
Under this section, a temporary residence permit may be granted for up to two years if the foreigner was registered for short-term employment in Estonia for at least nine months immediately before applying, and employment continues with the same employer who registered them.
Since the work continues under the same conditions and employer, there is no need to burden the Unemployment Insurance Fund or to submit a permit request within a short period.
Single Channel for Communication with the State
The amendments passed by the Riigikogu will allow, in a few years, foreigners and their employers to communicate with the state electronically through a single channel. This means that in the future, data and documents related to living and working in Estonia can be submitted to various state agencies via the Police and Border Guard Board’s electronic channel.
Currently, employers must submit data to multiple agencies: register short-term employment and apply for residence permits with the Police and Border Guard Board, record employment in the employment register, notify the Labor Inspectorate in case of posted workers, and request a permit from the Unemployment Insurance Fund for employment-based residence permits.
For example, currently, an employer must fill out a permit request in Word, digitally sign it, and email it to the Unemployment Insurance Fund. If the permit is granted, the employer must send it to the Police and Border Guard Board. In the future, the permit request will be sent via the Police and Border Guard Board's electronic channel, and employers won’t need to send it separately—required data will be retrieved directly from the Unemployment Insurance Fund.
Additionally, the amendments allow for the implementation of a self-service environment for submitting residence permit and right of residence applications, making the process simpler and paper-free.
These changes will take effect in stages between 2026 and 2029.
Increased Responsibility for Board Members
Soon, a provision in the Penal Code will be amended so that enabling employment for a foreigner staying in Estonia without legal basis may result in penalties not only for the employer but also for a member of the management board or another representative, if the obligation had been delegated to them.
If you have any questions about the changes to the Aliens Act, you can contact the chamber’s lawyers at juristid@koda.ee.