The provision of services is regulated by several legal acts, in particular, the European Union Services Directive Implementation Act occupies an important position here.
Rights of persons using services
The provision of services in Estonia is overseen by the Consumer Protection Board, which also protects the interests of consumers.
Provision of cross-border services
There are 5 possibilities for cross-border provision of service:
- The service provider establishes a new business in the consumer’s country of destination;
- The service provider temporarily goes to the consumer’s country of destination;
- The service user temporarily goes to the service provider’s country of location;
- The service provider and the service user are both in their own country and the service is provided via means of communication;
- Both the service provider and the service user go to a third country.
Temporary provision of services
The European Union Services Directive Implementation Act, enforced unambiguously in Estonia, specifies that a service provider of a Member State of the European Union has the right to provide temporary service in Estonia without establishing a company or a branch here. The temporary provision of service means that the service provider does not participate in the economy of another country on a stable and consistent basis. In Estonia, temporary service cannot be provided in an area related to the handling of explosives and weapons.
Permanent provision of cross-border services
In the provision of cross-border service, it must be taken into account that upon going to another country to provide a service, the general requirements related to the provision of services in that country must be considered, such as consumer protection, environmental protection, labour law, and the circumstances resulting from the specifics of the service itself.
The free movement of services does not cover transport services and financial services as well as non-economic services of general interest (for example, services related to state defence and internal security).
In Estonia, for the cross-border provision of services in the following regulated professional fields, there is a prior notification obligation.
- Electricity works;
- Pressure equipment works;
- Lifting equipment works;
- Works performed by machinery;
- Gas works.
Working in Estonia
Residents of the European Union do not have to register short-term employment. An EU citizen has the right to work in Estonia for three months, starting from entry into the country and also when he/she has been given the right of residence (no need for a work permit).
Points of single contact
The necessary notifications, applications and other documents for the provision of service can be submitted via the point of single contact by service providers from Estonia or another EU Member State. Documents and applications are submitted via the point of single contact electronically, but the right remains to submit the necessary documents on paper directly to the competent authority without using the point of single contact.
All complaints related to consumer protection shall be filed with the Consumer Complaint Committee.
Value added tax liability
If a foreign person dealing with business, who has no permanent place of business in Estonia, creates taxable supply in Estonia and such taxable supply is not taxed upon the acquisition of goods or receipt of service by an Estonian taxpayer, the registration obligation will arise as of the date of generation of taxable supply.
Foreign persons dealing with business who have no permanent place of business in Estonia are not obliged to register as taxpayers in case of the application of reverse charge. Reverse charge is applied if taxpayers or limited taxpayers registered in Estonia are sold goods or rendered services for which value added tax is payable in Estonia.
If an employee works on the territory of two or more Member States and lives in a country other than Estonia, he/she is socially insured in his/her country of residence and he/she is not entitled to Estonian health insurance. The location of the employer is irrelevant. Issued by the country of residence, a given person must have the required E101 certificate. The E101 certificate certifies that during work in Estonia, the social security legal acts of the country of residence are applicable to the employee.
If an employee works on the territory of two or more Member States and lives in Estonia, he/she is socially insured also in his/her country of residence, i.e., in Estonia and in this case his/her employer has to claim for him/her the required E101 certificate from the Social Insurance Board, which certifies that during work in another Member State the social security legal acts of Estonia are applicable to the employee.
Recognition of professional qualifications
Anyone coming to Estonia to work in a regulated vocational field must turn to the competent authority recognising the vocational activity of that field. The task of the competent authority is to compare the applicant’s professional qualification with the professional qualification required for working in the regulated position in Estonia and to decide whether the applicant is entitled to work in this position in Estonia.
Application for rights of residence
The temporary right of residence is obtained by a citizen of the European Union upon the registration of a place of residence in the Estonian population register. Temporary right of residence is obtained for up to 5 years. A citizen of the European Union does not have to apply for a work permit.
A citizen of the European Union can register the permanent right of residence, when he/she has lived in Estonia on the basis of the temporary right of residence permanently for 5 consecutive years. Permanent residence in Estonia is considered to be at least 183 days per year.
Further information can be obtained from the Consumer Protection Board. The section aimed at business owners contains suggestions and regulations developed by the Consumer Protection Board in order to ensure better consumer service in different areas.
The KredEx Credit Insurance offers loans and export guarantees, production guarantees, and investment guarantees to business owners.