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Estonia has become an increasingly important destination for Ukrainian defence industry companies looking for opportunities to expand their operations and engage in international cooperation. Thanks to its digital infrastructure, e-Residency programme, and flexible regulatory environment, Estonia offers strong support for both entrepreneurship and national security. However, challenges remain in financing and export-related procedures, as discussed during the joint panel hosted by RASK Attorneys-at-Law and e-Residency within the framework of Estonian Defence Week 2025.

“Just as in boxing, a smaller fighter must know their advantages and fight differently –with skill, endurance, and patience, while capitalising on the opponent’s weaknesses. Historically, the same has been achieved through innovative technologies,” noted Artur Sanglepp, Attorney-at-Law at RASK, who recently visited Ukraine and met with local defence-technology entrepreneurs.

According to Sanglepp, Ukrainian entrepreneurs have expressed a strong interest in establishing subsidiaries or holding companies in Estonia. The country has already taken steps to support this: as of January 2025, Ukrainian founders are no longer restricted from holding a majority stake in companies engaged in the production of weapons or ammunition. Estonia has also liberalised its regulatory framework for the manufacture of drones with military applications, thereby encouraging the establishment of defence-related companies in the country.

Estonia’s e-Residency programme allows Ukrainian entrepreneurs to operate businesses in Estonia without being physically present – a significant advantage in the current security context. “E-Residency provides an opportunity to securely and remotely access Estonia’s world-class digital infrastructure. It enables the use of Estonian e-services for business purposes, including the possibility to apply for export licences for strategic goods,” explained Liina Vahtras, head of e-Residency.

To date, Estonia has over 130,000 e-residents from 185 countries, a substantial portion of whom are engaged in entrepreneurial activity.

During the panel discussion at the Estonian Defence Week 2025, RASK Attorneys-at-Law Timo Kullerkupp and Artur Sanglepp, together with e-Residency head Liina Vahtras, emphasised that fostering defence-industry companies also strengthens Estonia’s security. The discussion highlighted the state’s role in developing the sector. One key initiative is Accelerate Estonia — an experimental framework led by the Ministry of Economic Affairs and Communications, designed to enable companies to test new solutions outside standard licensing procedures.
The readiness of the Estonian Defence Forces to cooperate with entrepreneurs developing innovative solutions is also positive.

Although the regulatory environment is favorable, defense industry companies face practical challenges. “From a business perspective, access to banking services remains critical at both the EU and Estonian levels. In Estonia, two banks have shown interest in the sector, while others remain cautious,” noted Timo Kullerkupp, Partner at RASK.

He further stressed that even agile defence-industry companies must maintain a sound governance, compliance, and trust framework. A flexible yet well-considered corporate structure and an ownership base with relevant sector expertise are essential for attracting investors and ensuring successful operations.

The panel discussion “Launch and Protect: Building a Defence Technology Company in Estonia” took place as part of the Estonian Defence Week 2025 programme.