Estonia Tightens Rules for Employers Hiring Foreign Workers, Effective 2026

Estonia will implement new regulations starting January 1, 2026, that tighten the requirements for employers looking to hire foreign nationals. The government’s decision aims to ensure that only stable and legitimate businesses are allowed to recruit workers from abroad, particularly in light of Estonia's growing labour market needs.

Foreign Hiring Restricted to Established Businesses

Under the new law, companies applying for a temporary residence permit for foreign employees must prove they have been operating continuously for at least six months in Estonia or another Schengen country. This requirement does not apply to employers using short-term employment registration, offering a degree of flexibility for seasonal or temporary roles.

Additionally, temporary work agencies—businesses that provide foreign labour to other companies—must now demonstrate six months of prior activity in Estonia or a Schengen state before they can begin hiring international workers.

Key Reform Replaces Salary Guarantee With Activity Requirement

Previously, work agencies were obligated to guarantee one month’s salary for each foreign worker they placed. That rule is being phased out and replaced with the new six-month operational requirement. While this change may ease financial pressure on agencies, critics warn it could reduce wage protections for foreign employees.

To increase oversight, employers will now need to be officially registered with Estonian authorities before employing any foreign workers—regardless of whether the employment is under a temporary residence permit or short-term registration.

Foreign Workers Still in Demand Despite Tighter Rules

Despite the added restrictions, Estonia remains open to hiring foreign talent. Labour shortages continue to affect essential sectors such as healthcare, IT, and logistics.

Estonia’s Prime Minister Kristen Michal recently responded to critics of the immigration reform, noting:

“Certainly, EKRE and its transfers in parliament are afraid that seven million people will come to Estonia, but I urge the public to discuss the needs of the economy.”

PM Michal pointed to the findings of the national OSKA report, which highlights Estonia’s urgent need for more workers due to demographic changes and a shrinking native labour pool.

These reforms, though stricter, are seen as a step toward streamlining foreign labour recruitment while ensuring the rights and stability of both workers and employers.