The Ministry of Economic Affairs and Communications contracted us to analyse Estonia’s administrative procedures and make proposals to streamline the relevant processes. The analysis, titled “Streamlining Investment Procedures (for New Businesses and Establishments)”, examines the possibilities of creating a “green corridor” to encourage high value-added investment by cutting red tape and shortening the time required for project approvals.

Large investments are moving away from Estonia

The analysis shows that Estonia’s administrative procedures are unreasonably time-consuming, causing investments that are vital for Estonia to be delayed or skipped altogether and made in other countries. The experience of other countries shows that Estonia could considerably expedite administrative procedures, but this requires, above all, a significant change in administrative practices and the removal of certain regulatory obstacles.

Estonian administrative procedures at least four years longer than in Finland and Sweden

Sorainen’s real estate and construction law experts interviewed Estonian and Finnish officials, developers and professionals and performed case studies in Estonia, Finland and, to a limited extent, Sweden. According to the findings, major investments in both Finland and Sweden have been implemented with administrative procedures taking less than a year. Meanwhile, Finland is still not satisfied with the pace of the process and will continue to improve efficiency. In Estonia, strategic environmental impact assessments for planning and environmental impact assessments for authorisations are known to take 2-3 years each and cannot be carried out simultaneously.

The main problem is the overall length of the procedures, not individual permit proceedings

To achieve favourable investment decisions, Estonia needs to ensure that administrative procedures are predictable and take place within a reasonable timeframe.

“From an investor’s vantage point, it is important to look at the different planning and permitting procedures as a whole. Comprehensive, unambiguous, predictable and swift procedures make engagement more meaningful and give the public greater confidence as well. Based on Finland’s experience, we believe that more effective cooperation between the authorities, developers and communities can do more to speed up the procedures than legislative change,” notes partner Paul Künnap, the head of Sorainen’s real estate and construction law team.

The analysis highlights the key objectives the state would need to achieve to attract investment:

  • Procedures should not take more than one year
  • The public should be better engaged
  • Environmental impacts should be appropriately considered
  • The state should improve its trustworthiness

Our services and client team

The analysis was prepared by partner Paul Künnap, the head of our real estate and construction law team, and senior associates Britta Retel and Kaspar Endrikson as well as associates Sandra Mikli, Anu Liinsoo and Andra Grünberg.