Tallinn Mayor to offer corporate hand-outs

  • 2009-07-23
  • By Ella Karapetyan
TALLINN - Tallinn mayor Edgar Savisaar wants to offer the unemployed the chance to run their own business, with all upfront costs paid for by the Estonian state. Savisaar declared that Estonia could offer its unemployed workforce the opportunity to set up a limited liability company of their own, but without taking on any monetary investment or risk, as was reported on internet portal dv.ee July, 21.
According to the mayor, it would be wiser to simplify the procedures of establishment of an enterprise, in order to help the unemployed become businessmen; of course, this would be with limited liability conditions, and without taking on any monetary or personal responsibility themselves.

Savisaar considers that it is necessary to create a form of business that wouldn't require the minimum share (fixed) capital investment, but something less.
He added that the main gap in the existing labor market that needs to be filled are people who are being trained and consulted but don't have enough courage to start up their own business.
"Certainly, the starting capital offered by the state at a rate of 70,000 kroons (  euros) will allow for the coverage of all expenses connected with the enterprise.

Our aim is to help at least half of the present 100,000 unemployed to start up their own businesses, and it would create about 50,000 new enterprises. If the state gives out the starting capital to all the unemployed, then the state would need to pay up to 3.5 billion kroons, a sum which the state hasn't got at the moment", explained Savisaar.
According to Savisaar, his suggestion for the unemployed to run their own business without any initial expenses, with limited liability, would be a good start. However, this could prove to be just a short term solution to the problem.

Anyway, this proposal is available only for those who are unemployed, and with the requirement that the unemployed produce a business plan, and so on.
Savisaar also mentioned that during the six month period after starting up the business the starting and share capital should be increased to 10,000 kroons, and the next six months the sum should be increased to 20,000 kroons. At this rate, in two years after starting up the business, the enterprise would completely meet all the requirements.

According to Eurostat, in May unemployment in Estonia had fallen to 15.6 percent, that is, 114,000 unemployed registered. Unemployment in the euro zone in May reached 9.5 percent, its highest indicator since May 1999. During the last year unemployment has increased the most in the three Baltic states.