As of 03 April 2020

State resources are directed to supporting companies through the KredEx Foundation and the Estonian Rural Development Foundation. The package also includes labour market support from the Estonian Unemployment Insurance Fund, sickness benefits and tax incentives. The package allows for temporary suspension of second pillar pension scheme payments, as well as partial compensation for direct costs of cancelled events.

For the latest information available, the following measures have been taken or agreed:


The Tax and Customs Board has suspended calculation of interest on tax debts from 1 March 2020 until 1 May 2020. The Government supported a proposal to suspend tax interest calculation for two months and to allow tax debts to be rescheduled at lower interest rates than are currently in force. After the end of the state of emergency, tax debt interest will be cut in half.

KredEx Foundation measures

1) Emergency loan guarantee for issuing new loans

  • Up to 90% of guaranteed loan or lease, 60% in the construction sector and retail or wholesale trade enterprises
  • The interest rate on guaranteed liability cannot be higher than 8% a year
  • Guarantee is valid for up to 72 months
  • Guarantee fee 1% of the outstanding guarantee balance per annum, 2% per annum for guarantees longer than 36 months for large entrepreneurs

2) Emergency loan guarantee to relax repayment schedules of existing bank loans

  • The bank relaxes the repayment schedule for an existing bank loan not backed by KredEx (at least 6 months payment leave or extension)
  • The interest rate on guaranteed liability cannot be higher than 8% a year
  • Guarantee is valid for up to 72 months
  • Guarantee fee 1% of the outstanding guarantee balance per annum, 2% per annum for guarantees longer than 36 months for large entrepreneurs

3) Emergency loan

  • The company has received a negative response or decision from the bank or lessor on unreasonable terms to the loan application
  • The loan is aimed at overcoming temporary difficulties caused by COVID-19
  • Up to EUR 5 million
  • Loan period 6 to 72 months
  • Interest rate starting from 4% per annum on at least 50% collateralized loans

Pre-conditions applicable to all applicants for KredEx measures:

  • The sum of the outstanding KredEx guarantee amounts and outstanding principal amounts of loans granted by KredEx to one entrepreneur and related entrepreneurs cannot exceed EUR 5 million
  • The company is entered on the Estonian commercial register and all necessary reports have been filed there
  • According to financial projections presented, the entrepreneur is sustainable and solvent in the long term
  • The company was not in difficulty as of 31.12.2019
  • The company has no overdue debts (excl. deferred debts) incurred before 01.01.2020 to the Tax and Customs Board or credit institutions
  • No bankruptcy or liquidation proceedings have been initiated
  • All measures are applied to overcome temporary difficulties caused by COVID-19
  • All measures available until 31.12.2020

Wage reduction

The labour market service of the Estonian Unemployment Insurance Fund aims to cover for wage reduction – amounting to EUR 250 million ‒ under the following conditions:

  • Benefit available to a compliant employer to cover two months from March to May 2020
  • Benefit of 70% gross of the employee’s average salary is paid, but not more than EUR 1000 monthly per employee in need of support;
  • Benefit is calculated based on the gross wages of the employee over the previous 12 months plus remuneration payable by the employer being no less than EUR 150 gross. The average wage or salary for a calendar day is calculated as follows: the sum of payments made during the nine months preceding the last three months is divided by 270. If an employee has been paid for a shorter period than 12 months, then the calculation is based on actual payments made, divided by the number of months worked multiplied by 30. The Unemployment Insurance Fund and the employer will pay all labour taxes on wages and benefits

To be eligible for benefit, a company must meet at least two of the three following criteria:

  • Turnover (or, in the absence of turnover, income in a calendar month) must have fallen by at least 30% compared to the same period last year
  • It is not possible to provide work for at least 30% of the workforce and the employer applies § 35 or § 37 of the Employment Contracts Act (the employer pays average wages or reduces wages upon failure to provide work)
  • The employer has reduced salaries for at least 30% of the workforce by at least 30% or up to the minimum wage established by the Government and has applied § 37 of the Employment Contracts Act

Compensation is paid directly to the employee. A group will also be considered to be an employer. The Unemployment Insurance Fund pays labour taxes on the compensation it provides. Payments should start in April.

Sick leave

From March to May, the state will compensate the first three days of sick leave for all incapacity leave applications. The government is additionally considering changing the Estonian Health Insurance Act to ensure that people who may be affected by an infectious disease (persons without symptoms but who are required to stay at home) could receive sickness benefit payment as well (from the first day until the day of recovery of working capacity), but there is no clarity on this proposition yet.

Rural companies

Rural companies can apply to the Rural Development Foundation for guarantees (up to EUR 50 million), business loans (up to EUR 100 million) or land capital financing (up to EUR 50 million).

Self-employed workers

Self-employed workers qualify for an advance social tax support measure.

II pillar

Payments into the II pillar of the pension fund are temporarily suspended.


The state compensates the direct costs of cultural and sporting events cancelled due to the coronavirus in March-April, up to EUR 3 million.

Supplementary Budget

The supplementary budget introduced on April 2nd includes funding economic measures already approved by the Government (see above) as well as some additional measures, which should help both businesses and consumers: deferral of tax arrears, temporary suspension of the government contribution to the second pillar of the pension fund, reductions of excise duties, as well as partial compensation for direct costs of cancelled events and lost income. The supplementary budget also supports local municipalities, the construction sector, IT development, education and research, and other emergency measures and exceptional costs.

One plan is to reduce electricity, gas and diesel excise duties to the 2017 level in order to keep the expenses of consumers and businesses to a minimum. Once economic growth passes the 2 percent level again, excise duties will slowly start to climb again.

The Government also intends to support investment by local municipalities, renovation of countryside apartment buildings as well as providing faster internet to rural areas. The VAT rate for digital subscriptions to journal publications is planned to be reduced to the same level as the VAT rate for books.

Benefits provided to entrepreneurs by the City of Tallinn

All the City’s tenants, including catering, retail, service, sports, hobby, art and cultural establishments as well as outdoor media companies are fully exempt from payment of rent. Tenants using the City’s real estate as office premises will get a 20% reduction on rent payments. The   benefit will not extend to utility payments (electricity, water, heating, etc.).