Estonia

• 15/10/2020
• Jurisdictions

Estonia does not have a formal FDI screening mechanism in place but has developed open FDI regimes, that score low on the foreign investment restrictiveness index of the OECD. Even so, the Estonian Act on Restrictions on Acquisition of Immovables (the EARAI) restricts FDI in specific sectors and applies to the acquisition of land used as profit-yielding in the public interest and the acquisition of land for national security reasons. The Ministry of Rural Affairs is the competent authority.

Scope

The EARAI provides for restrictions on the acquisition of land used as profit-yielding land in the public interest. It also provides for restrictions on the acquisition of land for national security reasons. The restrictions apply when: the investor is a not a citizen of a country which is a member of the EU, the EEA or the OECD (Member Country), or (ii) the investor is a legal entity who is not incorporated in a Member Country.

Screening Procedure

Estonian law does not provide for a notification obligation. Estonian law does not specify any rules on filing fees or confidentiality.

Sanctions

Sanctions include the correction of the land register entry and nullity of the transaction.

Legislative developments

In April 2020, the Estonian Minister of Rural Affairs started exploring opportunities for directing sales transactions of agricultural and forest land to local business owners, asking various institutions and organisations for their views on how to change the current rules. However, there are no specific plans to reform the legal framework.

 

The above information is a summary that does not constitute legal advice. For exhaustive information, advice, and assistance please get in touch with our lawyers.