Opportunities to use foreign labor in Estonia

The media depicts a constant shortage of labor in many sectors. One way to alleviate labor shortages is to involve foreign labor and this can be done in several different ways.

Teleworking on the basis of a services contract

In the case of work that does not require a person’s physical presence in the usual place of work, and the time of the work is not important, one solution is to order services and work on the basis of a services contract.

There are no geographical restrictions when concluding a services contract, nor do you have to worry about an Estonian visa or residence permit. It must be taken into account that the service provider is independent in its activities, i.e. the contracting authority’s control over the service provider is limited.

It is therefore particularly important to agree on the deadlines and results that need to be achieved. If it proves necessary for the service provider to reside in Estonia, it may be necessary for the person to apply for a visa, depending on his or her citizenship.

Recruitment within the European Union

If the permanent and long-term presence of team members in Estonia is necessary, but there is no desire to deal with bureaucracy, it is possible to recruit citizens of the European Union. One of the fundamental freedoms of the European Union is the free movement of people, and therefore, there is little difference from the legal point of view in recruiting an EU citizen compared to the recruitment of an Estonian citizen.

To obtain the right of residence, a citizen of the European Union must register a place of residence in the Population Register and apply for an Estonian personal identification code. Depending on the nature of the work organization, an employment contract or a service contract may be concluded with a citizen of the European Union.

Start-up visa

If it is a start-up company, a start-up visa is an additional option for attracting foreign labor. The right of residence and employment granted on the basis of a start-up visa is not included in the immigration quota provided for in the Aliens Act.

To use a start-up visa, the employer must be a start-up company – this is assessed by a panel of experts. Recruiting foreign labor to Estonia for a start-up entrepreneur has been significantly simplified for five years. In order to obtain a start-up visa, the prospective foreign worker must indicate in his / her visa application that it is a start-up visa.

Short-term employment

If the physical presence of the team members in Estonia is necessary, but the work project is short-term, it is possible to recruit foreign workers in a simplified manner by registering with the Police and Border Guard Board. In this case, the employee must have a legal basis to stay in Estonia (e.g. a short-term or long-term visa) and the period of employment may not exceed 365 days in 455 consecutive days. In addition, salary criteria must be taken into account, which varies according to the employee’s position and qualifications.

Visa for living and working in Estonia

If none of the above solutions are suitable, the employee may apply for a visa to live and work in Estonia. This option may prove to be the most difficult and time-consuming, as the quota under the Aliens Act, which fills up very quickly, also applies. In 2019, more applications had already been submitted by 3 January than the limit set for 2019.

In summary, Estonian entrepreneurs have several opportunities to involve foreign labor, but in order to find a suitable solution, the needs and opportunities of the employer as well as the employee must be taken into account.

In addition, when considering different options, employers also need to consider the tax aspects, which are not covered in this post.

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