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PESTEL ANALYSIS FOR ESTABLISHMENT AND OPERATIONS OF LYDIL IN

ESTONIA
Political
1. Estonia has remained for centuries under the rule of Danes, Germans,
Swedes, Poles, and Russians,
2. Under the rule of Communism, Estonian culture and other forms of
expression were repressed.
3. In the more than two decades since gaining independence, Estonias
political scene has been characterized by the creation and dissolution of
numerous parties and shifting alliances among them. Estonian
governments have lasted on average only slightly longer than a year each.
Nevertheless, due to a wide-ranging policy consensus, Estonia has
followed a remarkably consistent general course building a democracy,
a free-market economy, and integrating into NATO and the European
Union (EU).
4. Modern Estonia is a democratic republic with its capital and largest city as
Tallinn. Its population is 1.3 million and it is one of the least-populous
states of EU.
Economy
1. Estonia is considered a high-income economy by the World Bank.
2. The GDP (per person) of the country in 2015 was $28,781.
3. Estonia is the 4th freest economy of Europe and because of its rapid
growth; it is sometimes called Baltic Tiger.
4. Some of positive indicators of Estonia's market economy are free trade
regime, balanced budget, flat rate income tax and innovative e-services.
5. The average monthly gross salary in Estonia is 1105.
6. Estonia ranks number 16 in the World Rankings 2015, in ease of doing of
business.
7. Retailing business has experienced remarkable growth but gthere is also a
tough competition within the industry which helps giving benefits to the
consumers.

Social
1. Population of Estonia is 1.3 million with a large majority comprising of
Estonian citizens.
2. Of the 1.294.236 enumerated permanent residents in Estonia, 1.101.761
are Estonian citizens.
3. Estonia faces some ethnic strife but due to its geographical location and
affluent Russian minority, there are lots of potentials for growth.
4. Cities like Tallinn and Estonia in general have an atmosphere of trust,
business opportunities and are considered very suitable for business.
5. Estonian is the official language of Estonia, but the North and South have
different dialects.

6. Although the culture emphasizes self-sufficiency, this is no longer possible


as Estonia becomes integrated into the global economy. Local production,
including agriculture, is augmented by imports, primarily from the
European Union. Only 11 percent of the labor force is employed in
agriculture and forestry. While these residents may produce enough to be
self-sufficient, most citizens are urbanized and purchase food and other
necessities.
Environment
1. Natural wealth and resources are considered as national assets and every
citizen and resident is expected to abide by the Sustainable Development
Act which enact national strategies principles authorized on Rio de Janeiro
Conference (1992).
2. Laws related to environment are dynamic in Estonia. International
standards are being followed and in some cases international regulations
are replicated.. They are made part of Estonian legislation. Often the
environmental legislation is in a form of the government and minister
regulations.
3. Estonia has acceded with following conventions Arhus (1998), Espoo
(1991), Helsinki (1992), Kyoto protocol (1997), Geneva (1979), Vienna
(1985), Washington (1973), Rio de Janeiro (1992) etc.
4. National and local bodies like The Environmental Inspectorate, Land Board
and local government bodies exercise environmental supervision in
Estonia.
Legal
1. Taxation policy to a major extent is liberal. This has ensured the countrys
rapid development and economic success. Taxation policy has been
instrumental in promoting investment and attracting foreign capital.
2. Foreign investors when compared with local entrepreneurs have equal
rights and responsibilities and there are no special restrictions imposed.
3. Foreign investments are protected by internal law and international
agreements. Estonia has concluded treaties for the protection of
investments with several countries including U.S.; Germany; France;
Finland, Sweden; Norway; Switzerland. Also agreements on avoiding
double taxation are made with more than 30 countries including EU
countries.