Helping the minister: what is a startup?

A startup (iduettevõte in Estonian) has been defined by the Estonian legislator in § 624 (2) of the Alien Act, which states that a start-up is a business entity belonging to a starting Estonian company, the purpose of which is to develop and launch an innovative and replicable business model with high global growth potential, that shall significantly contribute to the development of the Estonian business environment.

The definition of a start-up is designed to regulate the start-up visa program. The start-up visa program is a more flexible regulation for foreigners working in start-ups in Estonia to attract the talents necessary for Estonia’s development.

A start-up visa can be short-term (up to three months) or long-term (up to 12 months), which can be extended by 183 days. After that, it is possible to apply for a temporary residence permit for business for up to five years.

How to become a start-up founder?

Anyone can be a start-up founder. However, in order to obtain a visa to engage in a start-up business, an application must be submitted on the Startup Estonia website.

The application must describe in detail the company, business model, and team. Questions about the market, funding, and strategy also need to be answered. To qualify, a company must have either a minimal viable product or a prototype. Applications from companies in the idea phase will not be considered.

The application should also be accompanied by information about the website, the pitch deck, and the applicant’s CV or a link to their Linkedin profile.

Whether a company qualifies as a start-up company is assessed by an expert committee of specialists working in the field, who make a decision within ten working days. Start-ups participating in trusted accelerators such as Buildit Accelerator 2 and Startup Wise Guys can apply for a visa without the opinion of the expert committee.

After the approval of the expert committee, the start-up company can apply for a visa from the Estonian Police and Border Guard Board on more favorable terms.

There are no regulations regarding start-ups in other Estonian laws.

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Hedman

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