Estonian politician warns investments are shifting to Latvia and other neighbors
Parempoolsed politician Andrus Kaarelson criticizes Estonia's government for failing to attract foreign investment, saying support programs sit unused because investors simply aren't applying. He notes Latvia and other neighbors are pulling in billions while Estonia falls behind.
Estonian Reform Party politician Andrus Kaarelson argues in a published opinion piece that the country has failed to build an attractive environment for foreign investors, blaming both local municipal resistance to major projects and unstable tax policy.
He writes that it has become nearly impossible to carry out large energy or industrial projects in Estonia without years of disputes with municipalities or even court battles, citing the failed attempt to build a large poultry farm in Väimela as an example.
Support scheme goes undistributed
Kaarelson notes that the government was recently forced to lower thresholds for a support scheme offering up to €20 million to major investors. Previously aimed at companies investing at least €100 million, the threshold has now been cut to €70 million, to €20 million for defense industry projects, and to €30 million for priority technologies including food production and renewable energy. The reason: roughly €40 million available this year under the old conditions could not be distributed because too few applicants came forward.
Neighbors attracting billions
The article notes that Germany's Rheinmetall alone is investing about half a billion euros in Lithuania, Finland is building data centers worth billions, and Poland is constructing a nuclear power plant. Latvia received slightly more than €1 billion in foreign investment in 2025, while Estonia's figure was nearly half that, ranging between €500 million and €800 million depending on the source.
Kaarelson also points to several Estonian entrepreneurs who have made their largest recent investments in Latvia, including Frankenburg's stake in the Ādaži rocket factory and Fibenol's decision to invest €700 million in a Latvian biorefinery. Skeleton Technologies likewise chose Finland, Germany and Poland over Estonia for new production facilities.
While Estonia still holds more total foreign investment than Latvia and Lithuania, the author warns the gap is closing fast and urges the government to cut bureaucracy and stop repeated tax increases.
