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Estonia's president says a lack of 'special conditions' for tech giants has allowed local start-ups to thrive

Estonia's president says a lack of 'special conditions' for tech giants

September 20, 2021: -Estonia’s tech companies have been able to thrive in the absence of large multinationals such as Facebook and Microsoft, the country’s president told CNBC.

Home to more than a million people, Estonian founders have produced several tech firms with multibillion-dollar valuations. Skype was sold to eBay, and then Microsoft became well-known. At the same time, others include the recently listed currency exchange app Wise and mobility app Bolt, which is backed by Silicon Valley VC heavyweight Sequoia.

President Kersti Kaljulaid said multinationals have set up their overseas headquarters in countries with generous tax systems, which adds that Estonia has never been a tax haven.

Facebook, Google, and Apple employ thousands of people at their European headquarters in Ireland, where corporation tax is 12.5%, and in Estonia, it’s 20%. The tech giants also employ thousands of staff across other European countries, which include the U.K. and Switzerland, but they don’t have a significant presence in Estonia.

“Estonia is a country that has not offered special deals or special treatment to any company,” Kaljulaid said in an exclusive interview in the previous week. “When I was advising the prime minister 20 years ago, everybody always came and asked what your special conditions are? We said none, and I think it has served us right.”

She added, “This probably, one of the reasons why Estonia has so many homebred start-ups from which you see unicorns coming out more often.”

Estonia has developed a reputation for holding one of the most technology-friendly countries globally, with the government moving many processes online well before other nations. For example, it has embraced online voting and digital IDs, and free wi-fi is widely found across the country.

Kaljulaid said the country’s leaders want to ensure Estonia’s legal space is safe but permissive for the recent technologies like the grocery delivery robots that have been built by Starship Technologies, which Skype co-founder Janus Friis set up.

Kaljulaid said the nation’s entrepreneurs and coders have been educating politicians on the technologies poised to change the world.

For example, Skype co-founder Jaan Tallinn is teaching her and others all about artificial intelligence.

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