Kai Realo, head of garbage disposal and recycling firm Ragn-Sells, this is the first positive move from the government aimed at businesses in a long time.

Ragn-Sells is developing an oil shale ash recycling plant in Narva, for instance, which could benefit from such support, Realo said.

"This at least encourages certain businesses to consider making significant investments, particularly those focused on production and exports," Realo told "Aktuaalne kaamera."

As it is presented the new measure seems as much or more aimed at attracting foreign investment, however.

At the same time, while the state is supporting businesses with €40 million annually over four years, ie. €160 million in total, it plans to collect an additional €200 million annually from companies via new taxes, pointed out Ain Hanschmidt, head of holding company Infortar.

"f the state is running a budget deficit, then the government budget needs a thorough review to cut unnecessary and strange expenses," Hanschmidt said.

Infortar's subsidiaries include natural gas market leader Eesti Gaas.

 Marti Hääl, CEO of Alexela, a fuel company, said that in his opinion, for foreign investors the positive effect of investment support is far outweighed by the negative impact of tax hikes in any case.

Hääl said: "A misguided step in corporate taxation could render this other measure meaningless because investments won't come here," adding that other countries such as Lithuania, which has a lower tax burden, will be more likely destinations for foreign investment.

"If, on the one hand, we're trying to attract capital to help the economy recover, and on the other, we're taxing that capital, it's clear to everyone that this approach won't work," Hääl added

Up to €15 million in support will be available to about ten companies via the €160 million fund.

Minister of Economic Affairs and Industry Erkki Keldo (Reform) expressly stated the measure is designed to attract foreign investments to Estonia, yet it is also aimed at fostering " smart economy" companies in Estonia, and in any case, the government won't be "hand picking" the recipients itself.

The main criteria are: Investment of €100 million or more; above-average wages for the sector in question; being export-oriented; and creating at least 30 direct jobs and 70 indirect jobs.

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