EU will up Estonia's foreign labor force

TALLINN - The drift of foreign workers from Europe into Estonia has been steady since the restoration of independence. And when Estonia's time comes to at last join EU, their numbers are expected to grow even more, predicted Marju Rein, director of Tallinn's employment department.

The National Labor Market Department has approved 700 foreign work permit applications in 1999, and about 280 from January to June this year, Rein said.

Most of the applications came from the citizens of Finland, Sweden, United States and Russia. The rest were from other European countries, India and China. About 75 percent of foreign employees work in Tallinn, said Rein.

A brief overview of foreigners in the labor market of Estonia presented by the Tallinn employment department shows that Estonia welcomes top specialists of different fields. Banking, IT, finance and high technology professionals, language teachers and chefs of national cuisine are represented in Tallinn.

"International companies often have a representative here in Estonia," added Rein.

To work in Estonia, a foreigner needs a residence permit and an employment permit. According to the Estonian law on aliens, an employment permit may be issued on the application of a specific employer for a period of up to five years. The alien must have a lawful means of support.

For those who have a permanent residence permit, the employment permit is not required.

Mati Karu from the Tallinn employment department said the basics of the employment policy of Estonia are taken from the experience of Finland, Sweden and Germany. However, Karu, who studied in Sweden, noticed that situation in Estonia is unique because of a large Russian national minority and related problems.

The procedure of getting residence and employment permits can become easier, if a foreigner who wishes to live and work in Estonia is a major specialist or a strategic investor.

"Of course, it was easier to get the permits for (multimillionaire real estate entrepreneur) Ernesto Preatoni than for some cook from a restaurant. But anyway, employees and businessmen from abroad are good for Estonia, as they bring new ideas and investments to our economy," said Karu.

Koit Luus, tax department spokesman, said taxation of foreign employees depends on the person's country of residence, and what the tax rates are in the native country.

"For example, if a citizen and resident of Sweden has worked here in Estonia, income tax should be paid to the Estonian Tax Department. But the taxes in Sweden are higher, and that person has to pay the excess in Sweden," said Luus.

To prevent double taxation, agreements have been made with 19 countries, including Finland, Sweden and the United States.