Estonia woos S’pore businesses with offers of speedy set-up and fast pathway to EU

TALLINN – It is a Thursday night, but customers in a psychedelic blue-lit room off a cobblestone street in Estonia’s capital city Tallinn are belting out songs by modern boy band Backstreet Boys.

They are in House 10, the country’s first karaoke spot to offer private rooms over open bars, and the first to serve up Singapore sambal popcorn – ordered through QR code.

Singaporean Venus Lim opened the well-rated hang-out spot in Tallinn after working and living there for five years.

She was drawn to the country’s e-Residency scheme, which allows foreigners to remotely establish business in Estonia to access the 450 million population market in the 27-state European Union, of which Estonia is a member.

More than 122,000 applicants from over 170 countries have since used the programme to register 33,800 Estonian companies, according to Estonia’s official figures.

Ms Lim said: “You can incorporate a company in a matter of minutes, and then you can get a company bank account within the same, or next, week.”

She is among the Singaporeans who spoke to The Straits Times in Tallinn, on the back of a series of bilateral exchanges that included visits from then Estonian Prime Minister Kaja Kallas to Singapore in 2023, and

President Tharman Shanmugaratnam to Estonia in 2024

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Mr Priit Turk, the country’s ambassador to Singapore and Asean, said Estonia wants to showcase itself as a launchpad for global expansion, especially in deep tech, cyber security and artificial intelligence (AI).

“Ultimately, we aim to spark interest among Singaporean companies in leveraging Estonia’s strengths as a gateway to Europe and beyond,” he said.

Since breaking away from the Soviet Union in 1991, the Nordic-Baltic nation has gone on to produce global unicorns such as Bolt in ride-hailing, Wise in fintech, and Veriff in AI-powered identity verification.

Mr Turk said Estonia is collaborating with Singapore in the maritime field, such as port security, digital shipping operations, cyber resilience, as well as green and surveillance technologies.

Cyber-security services are one of the country’s fast-growing sectors, in part due to what happened in 2007, when hackers crippled Estonia’s government portals, news outlets, internet service providers, major banks and small businesses in two coordinated cyber attacks that lasted for weeks. 

Mr Turk said: “After facing the world’s first large-scale cyber attack, we transformed into a global leader in cyber security and digital resilience.”

The incident led to the setting up of the Nato Cooperative Cyber Defence Centre of Excellence and a flourishing of cyber-security start-ups in the country.

In 2024, the Singapore Deep-Tech Alliance signalled support for Estonian deep-tech start-ups to penetrate South-east Asia’s market of 670 million people, and help Estonia reach its goal of having 500 deep-tech start-ups by 2030.

It also announced intentions to work with the deep-tech sector in Estonia to grow global enterprises together.  

Ms Clara Chen, a co-founder of Singapore Deep-Tech Alliance, points to the Republic’s cleantech firm Aprisium, which has set up its European hub in Estonia.

“The business environments in Estonia and Singapore are more similar than we think, which makes it an easy entry point to the European markets for Singapore start-ups,” she said.

Mr Luuk Eliens, another co-founder of the alliance, recommends Estonia for its tax system, competitive talent costs and digital governance and technology.

“It taxes corporate profits only when they are distributed, such as dividends,” he said. “Start-ups typically need to reinvest a significant portion of their earnings in R&D (research and development), scaling team and marketing. It is advantageous that there is zero corporate tax on retained profits.”

Singaporean Tan Ding Kang, who is doing his undergraduate studies in Estonia, refers to the country’s label as the Silicon Valley of Europe. Education up to the tertiary level is free for citizens, and 100 per cent of government service – even divorce filing – is digitalised.

The country’s 1.3 million-strong population is about a quarter of Singapore’s, but many citizens are well educated and entrepreneurial, said Mr Tan.

For Singaporeans who are keen to take the plunge, House 10’s Ms Lim advises speaking to peers who already operate in Estonia, and to look up the revenue filings of companies in their industry.

She said: “One thing that’s great about Estonia is that they have this public business register where you can see all the business filings of every single company.”

However, for a country where days could be 20 hours long in summer and temperatures plunge to minus 23 deg C in winter, surprises do happen, as Ms Lim found out.

She said: “In the winter, we were breaking records four or five months straight in a row. But none of the money really felt like it went into our pockets, because it went into paying for the quieter months in the summer.”

Now that the business has entered its second year, she is focused on making it profitable. Hotel chains in Europe have come knocking, so she is looking at taking the brand global.

But Estonia will always figure in any plans by the business.

Ms Lim said: “House 10 was always going to be a brand that has its headquarters in Estonia. It really took care of me; the country, the people I met at the company.

“Estonia is very sentimental to me.”