Turnover of start-ups using the Startup Visa reaches EUR 1 billion
Estonian start-ups participating in the Startup Visa programme paid a total of nearly EUR 90 million in labour taxes last year, while their total turnover reached EUR 1 billion.
According to Annika Järs, Head of Startup Estonia’s Startup Visa programme and External Relations, all of Estonia’s largest start-ups use the Startup Visa today. 146 start-ups have applied for the start-up status to recruit external talent, and 124 Estonian start-ups have been enrolled in the programme since its inception. ‘The added value created by foreign investors and foreign talent working in Estonian start-ups is impressive for both the start-up sector and the Estonian state. Last year, 310 people worked in start-ups established with the help of the Startup Visa programme, a fifth more than in the year before. In addition, start-ups paid EUR 4.2 million in labour taxes to the State, and their total turnover was EUR 37.4 million,’ said Järs.
Estonian start-ups with the Startup Visa status employed 5,677 people last year, nearly 30% of them foreigners, and paid a total of EUR 89.9 million in labour taxes. Last year, Estonian start-ups hired 925 workers from abroad with the help of the Startup Visa programme. The countries with the highest numbers of workers coming to Estonia are Russia, India, Brazil, and Ukraine.
Järs stressed that with the help of the Startup Visa programme, start-ups bring in workers with specific skills that they could not find in Estonia. ‘As a rule, these are specialists in a narrow field, who also have a level of education above the average of the start-up sector. Foreigners contribute primarily to international business development, technology creation, as well as global sales and marketing of products and services created in Estonia,’ she added.
Last year, 765 start-ups applied for a Startup Visa, of which 16% were successful. ‘To benefit from the Visa, a company must obtain the approval of a start-up committee convened by the Ministry of the Interior. The percentage of successful applications has been decreasing in recent years, and this shows that interest has been growing and the number of applicants has increased, but by no means do all applicants meet the requirements and get the green light from the committee,’ Annika Järs explained.
Over the years, 932 positive decisions have been issued under the Startup Visa programme for the establishment of start-ups in Estonia. 250 of the start-ups in the Startup Database, or one in five Estonian start-ups, have been founded with the help of the programme. In 2021, 171 foreign founders were authorised to establish a start-up in Estonia, and 36 new start-ups were set up by them. Start-ups founded in Estonia by foreigners are mostly active in the field of business software and services, with a total of 52 start-ups operating in this field. This is followed by advertising and creative technologies with 31 start-ups, and by 29 start-ups in the area of products and services for final consumers.
This week, Estonia got another unicorn founded by a foreigner. Glia, which operates in Tartu and Tallinn, surpassed the USD 1 billion mark in the eyes of investors, and became Estonia’s tenth unicorn. Carlos Paniagua, co-founder of Glia, came to Estonia from Guatemala in 2010, when he started his Master’s degree studies at the University of Tartu. The start-up is one of many that have used the Startup Visa to hire talent from outside the European Union. ‘I am very grateful to Estonia for its hospitality and support for foreigners. I feel at home here, and Estonia’s local community, ecosystem and programmes like the Startup Visa create opportunities to establish new businesses here or help existing start-ups grow to success,’ said Carlos Paniagua, co-founder of Glia. Glia had a turnover of EUR 6.1 million last year.
Launched in January 2017, the Startup Visa Programme allows non-EU nationals to work for Estonian start-ups, relocate existing start-ups, or set up new ones in Estonia.
Startup Estonia connects and supports Estonian start-ups. Startup Estonia collects data in cooperation with start-ups and the published statistics are based on data from start-ups, the Estonian Tax and Customs Board, and Statistics Estonia. Startup Estonia is a national programme to develop Estonia’s start-up ecosystem, boosting the emergence of start-ups and international success stories. The programme of Startup Estonia is carried out by KredEx. Startup Estonia’s research accelerator activities are carried out by SmartCap.
The Startup Estonia programme (project number EU50651) is financed using funds from the European Regional Development Fund.