The Foreign Investors’ Council in Estonia (FICE) recently convened for its 2024 conference, addressing a pivotal question: Do foreign companies want to stay in Estonia? The discussion illuminated a number of business challenges foreign investors face in the country. These included rising operational costs, regulatory unpredictability, and insufficient public-private dialogue. Yet, despite these hurdles, many foreign investors remain committed to Estonia, motivated by reasons that transcend pure financial returns.
Key Findings: Balancing Business Challenges and Personal Commitment
The insights shared by FICE demonstrate that foreign investors, particularly its ten major members who account for nearly 80% of foreign direct investments in Estonia, face significant challenges, including:
• Rising business costs due to inflation, high energy prices, and economic inequality in regional areas. • Labour shortages, particularly in sectors requiring specialised skills, compounded by restrictive visa regulations. • Regulatory unpredictability, which hampers long-term planning and competitiveness.
However, despite these challenges, foreign investors are still choosing to remain and even deepen their commitments to Estonia. Why? The reasons extend beyond return on investment (ROI) and tap into deeper, more personal motivators.
Beyond ROI: Investing in a Vision of the Future
Investors spoke about their satisfaction with the quality of life Estonia offers. It is not merely about economic opportunity, but about investing in a future that resonates with their personal values. High standards of living, safety, access to nature, and the country’s affordability in many areas all contribute to a sense of belonging that keeps foreign investors engaged. Moreover, many investors have forged family ties within Estonia, reinforcing their emotional and social connections to the country.
This insight reveals a critical lesson for digital investment platforms and financial products: Investors are more likely to stay when they are invested in a broader vision that aligns with their personal aspirations, beyond financial metrics.
Applying FICE Insights to Digital Platforms and Products
For digital investment platforms, such as peer-to-peer lending or fintech-driven products, understanding and leveraging these insights can be transformative. Platforms should aim to attract and retain investors not only by offering strong returns but also by creating a compelling narrative that ties investments to a broader purpose.
How can this be achieved?
1. Citizenship by Investment: Investors are increasingly drawn to opportunities that offer tangible, long-term benefits. In this sense, citizenship or residency opportunities linked to sustained investment can be a powerful retention tool. Estonia’s renowned e-Residency programme is an excellent example of this concept in action. It provides foreign investors with a digital identity and access to EU business opportunities, making Estonia not just an investment destination, but a gateway to Europe.
2. Commitment to Sustainability and Innovation: Investors are more likely to stay with a platform or product when they believe they are contributing to something that will outlast their monetary gains. Emphasising the role that investments play in supporting green initiatives, technological innovation, or regional development can make an investor feel that their money is making a difference. This aligns with FICE’s suggestions to the Estonian government, such as increasing spending on research and development and upskilling towards higher value-added sectors.
3. Enhanced Engagement and Dialogue: One of the criticisms raised by FICE was the insufficient dialogue between the public and private sectors in Estonia. For digital platforms, fostering stronger, more personalised communication channels with investors can greatly enhance retention. Offering investors regular, insightful updates on the impact of their investments—whether they’re contributing to local economic growth, job creation, or technological advancements—keeps them engaged and committed.
4. Community and Belonging: Just as foreign investors have built family ties and community connections in Estonia, digital platforms can benefit from fostering a sense of community among their investor base. Engaging investors through events, forums, or even physical meet-ups can build emotional loyalty, ensuring that investors feel like they are part of something bigger than just a financial product.
The Importance of Vision in Retaining Investors
FICE’s findings highlight that foreign investors remain committed to Estonia not simply for the monetary benefits, but for a shared vision of the future. Similarly, digital investment platforms must go beyond offering high returns to build meaningful, lasting relationships with their investors. By creating a compelling narrative that aligns with personal values, fostering community, and offering long-term benefits like residency or citizenship, digital platforms can significantly increase investor retention and attract long-term investment.
Conclusion
Are you looking to extend the lifespan of your investors on your digital platform or product? Let us help you create a compelling narrative and value proposition that goes beyond ROI. Book a free consultation with Ecolibero to discover how we can assist you in retaining investors for the long term, ensuring their commitment to your vision, platform, and purpose.
Together, let’s build a future where investments are not just about financial returns, but about creating lasting impact and shared growth.