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Offset program for export opportunities

Last Updated (Friday, 20 January 2012 11:58) Written by Jürg Samel Friday, 06 February 2009 09:37

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Offset, industrial participation

When the Estonian armed forces make large purchases of defence material from foreign suppliers the offset deals are required. The focus is on the cooperation between the Estonian defence industry and foreign suppliers. Offset is contractual condition where the supplier must buy from the purchaser goods and services, make investments or offer marketing assistance.

The main objective of the offset program is  to contribute to the development of high value added and innovative industries in Estonia through the promotion of exports and investments.

There is a system of weights (multipliers) to determine which sector is most preferred. R&D and High-technology sectors are most preferable.

Offset forms and categories

Eligible categories are:

  1. Export of goods and services (goods and services should be targeted for foreign consumers, exported commodities shall be for consumption outside Estonia only.)
  2. Research and development cooperation (R&D) (research studies, experiments, certification, consulting and training services from an Estonian company. Acquiring technologies and knowledge, other R&D activities including ordering R&D services, assistance to product development and marketing to the Estonian company.)
  3. Investments (investments shall be made into equity of small and medium-size enterprises in Estonia for at least 5- year period. Investments are allowed in R&D, strategic goods and high-tech.)
  4. Technology transfer (foreign technology or knowledge must be transferred free of charge or as an investment from foreign companies to Estonian comapanies.)
  5. Marketing assistance (support of a foreign company to market Estonian goods and services or creation of a marketing channel free of charge to the Estonian company.)


List of priorities:

  • Research and  development (NACE72)
  • Strategic goods (military and dual-use goods)
  • High-tech  products (OECD classif)
  • Selected industries (NACE 19-31, 16.2.3)
  • All other qualifying industries (NACE 13-18)


Excluded categories

  • raw materials
  • agriculture, forestry, fishing (NACE 01, 02, 03)
  • mining (NACE 05-08)
  • manufacture of food products, beverages and tobacco products (NACE 11,12)
  • gas, electricity, steam and hot supply (NACE 19, 35, 36)
  • trade, hotels and restaurants (NACE 45-47, 55)
  • financial intermediation, insurance, real estate activities (NACE 64-66, 68)
  • public administration (NACE 84-88, 99)


Limitations

Investments, technology transfer and marketing assistance are only allowed in categories of R&D, high-tech and strategic goods.

The minimum Transaction value of each individual offset transaction must be 0,5 million Euros,with the exception of R&D with the minimum value of 0,2 million Euros.

More information:

Kristel Kõiv
Business Consultant
tel: 738 6021 (Tartus)
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