Yeah, it's probably a little unfair that countries like Estonia have an unwarranted reputation that makes it hard for them to attract FDI, even in fintech. .
I'm not sure about what unwarranted reputation of Estonia you're talking about. I only know one recent money laundering scandal in Estonia, but it was done through Scandinavian banks. But in general, Estonia is know as one of the most progressive countries in Europe. And with fear of Brexit, Estonia will be among first choices for FDI, fintech's and etc. I can even give one example, it's Revolut. Where did they got banking license few months ago? In Lithuania (not Estonia, but their neighbour country in Estern Europe). So, I'm not sure why you are saying that Estern Europe and Baltics is undesirable.
This is what I meant exactly by unwarranted so please understand what I'm saying.
Like it or not, they just don't have a desirable reputation in fintech or even finance. I have close friends in compliance (finance) who also can't explain it. They'd give a workshop in Western European conferences and in training workshops and tests, industry people repeatedly put low scores against these countries because in their minds, they're just no as "safe" reputation-wise, as Western Europe DESPITE how clean they are compared to WE.
Getting a licence from Estonia isn't the same thing as setting up shop in Estonia. Read
for example, about how UK fintechs are seeking to relocate to Western Europe because of Brexit. Estonia would welcome them with open arms but their clients simply wouldn't sit well.
In the article, Azimo talks about this unwarranted rep. Here's the quote:
Kent said he had to rule out Eastern European countries due to "a reputation" among international players for poor regulatory oversight deserved or not.
"I sat down just today with [a large high street bank] who told me they were doubtful about allowing fintechs from Eastern Europe on their platform," he said in the interview last week.