Hiring employees for your Estonian company can be straightforward, involving just the signing of a contract and registration with the tax office. However, if you seek talent from outside the EU, the process might require additional steps.

Work Permits in Estonia

The Estonian Police and Border Guard Board is the authority responsible for issuing work permits for employees from third countries. Their website provides detailed information on the requirements for both employers and employees.

Types of Work Permits
There are two primary types of work permits in Estonia:

Short-term Work Without Residence Permit: This permit is suitable for employment lasting no longer than 365 working days within a 455-day period. It is typically used for specific, short-term projects.

Residence Permit for Working: Any employment arrangement extending beyond one year requires this permit.

It is crucial to note that working is not permitted until the necessary registrations or permits have been granted. Employers can agree that the employee will start working remotely from their home country and relocate to Estonia once the paperwork is complete. Remote work for an Estonian company does not require any permits.

After necessary paperwork is in order, the next step is to sign the employment contract and register the employment with the tax office.

Employment Contract and Registration
Once all necessary paperwork is in order, the next steps involve signing the employment contract and registering the employment with the tax office.

Legal Requirements for Employment Contracts
Employment relations in Estonia are strongly regulated by legislation, with the employee considered the weaker party. Therefore, employment contracts must comply with legal conditions and be signed in written form, typically digitally. Mandatory terms in all contracts include:

1. Employee’s name, personal identification code, and place of residence; employer’s name, registry code, and address
2. Date of entry into the contract and commencement of work
3. Description of duties
4. Job title
5. Wages, taxes, and payments
6. Training entitlement and other agreed benefits
7. Working time
8. Workplace
9. Duration of annual holiday and reference to other compensated holidays
10. Reference to the form reproducible in writing, the obligation to give reasons, and notice periods for contract cancellation
11. Reference to employer-established work organisation rules
12. Reference to a collective agreement if applicable
13. Procedure for performing and compensating overtime work
14. Duration of the probationary period

Termination of Employment

While you aim to maintain a satisfied workforce, there might be instances where employment needs to be terminated. There are three legal grounds for termination, each with its own terms and conditions regulated by law:

Mutual Agreement: Both parties agree to terminate the employment.
Termination by the Employee: The employee decides to leave the job.
Termination by the Employer: The employer decides to end the employment.
When employment ends, it is necessary to notify the tax office and, if the employee is from a third country, the Police and Border Guard Board.

Need Assistance?
1Office can provide advice on employment in Estonia and offer services related to employment taxes and registration. For further assistance, please contact estonia@1office.co.