History of Estonian shipping

The importance of Estonian cargo fleet among the Baltic nations and also within the European and world context in the second half of the 1930s was impressive. Among the Baltic countries, Estonia ranked third, and seventh in the whole world in terms of the total tonnage of the merchant fleet per 1000 inhabitants. Around the Baltic Sea, only Denmark and Sweden outdid Estonia. (Teele Saar, Eesti Laevanduse Aastaraamat, 2016).

Estonian Maritime Shipping, established in 1940, was one of the major organisations dealing with maritime transport in Estonia during the second Soviet occupation, until its privatisation in 1997. After independence was regained in 1991, the government declared Estonian Maritime Shipping the property of the state, and it was decided to establish the state-owned public limited company RAS Eesti Merelaevandus, which managed to keep most of the fleet it had owned during the Soviet era. On 1 July 1993, the company owned 80 vessels, but soon the decision was taken to divide it into separate enterprises Tallinna Sadam (at that moment comprising only Vanasadam harbour), Muuga Sadam and Loksa Laevaremonditehas.

After privatisation of RAS Eesti Merelaevandus in 1997, the fleet continued to be reorganised and the number of vessels reduced. On the one hand, the older vessels were sold to be scrapped and on the other, the newer ships, built in the 1990s, abandoned the Estonian flag.

The solution was needed to increase the number of ships, because the size of the fleet under the Estonian flag directly affects various aspects:

• a larger number of ships under the Estonian flag helps maintain and develop the coastal sector of shipping and the availability of know-how;
• The Estonian state would receive more registration fees from ships flying the Estonian flag, which would increase the state's revenue base;
• the social tax paid by crew working on the ship is received by the Estonian state, which also increases the revenue base;
• Estonian seafarers will have a greater opportunity to work under the Estonian flag and receive a share of Estonian social insurance.

On July 1, 2020, the package of shipping laws entered into force, due to which ship operators have certain benefits that encourage bringing ships under the Estonian flag.

The purpose of the legal package was to encourage larger cargo and passenger ships engaged in international sea transport to fly the Estonian flag, i.e. to register the ships in the Estonian ship registers.

On the basis of the legal package, the process of registering ships in the registers of bareboat chartered ships without a crew was simplified and a special tax regime was established for ships that meet certain conditions (tonnage tax scheme) and labor taxes for crew members.

It is one part of a comprehensive package of measures, the aim of which is to attract more and more coastal sector companies to Estonia through the emerging reputation of the maritime country and the growth of maritime know-how and create new jobs with it. Measures aimed at the cargo and passenger fleet and the shore sector create a basis for the growth of the Estonian economy.