Learn how to make passive income online, by investing, through real estate and without spending money. Plus review other ways to grow your money.
How to make passive income
Bringing in passive income can help you achieve your financial goals without actively working. There are many ways you can earn passive income in Estonia, including online, through investing, or through real estate. You can even earn passive income with no money. Here are 24 ways to generate income whilst spending time with your family, travelling, or relaxing—all adapted for Estonian residents and the local market.
What is passive income?
Passive income is money you earn without actively working. There’s usually some initial setup required and there may be upfront costs, but once your passive income stream is up and running, you can keep income flowing in with minimal effort.
For instance, if you’re a graphic designer who sells premade designs online, you’re earning passive income every time someone purchases a design. If you’re a consultant, creating a course people can purchase rather than working with clients one-on-one is one path to passive income. Earnings from investments or renting out property are also considered passive income.
Important: Passive income may be taxable, depending on the source and how much you earn. To avoid overlooking any obligations or deductions, consider working with a tax expert when it’s time to file. Understanding your tax obligations is part of maintaining good financial health.
Understanding passive income taxation in Estonia
Before diving into passive income opportunities, Estonian residents must understand the tax implications. Estonia has unique taxation rules that affect how passive income is taxed.
Key Estonian tax considerations:
Dividend income: Companies pay 20% corporate income tax when distributing dividends. As an individual shareholder, you don’t pay additional income tax on dividends received from Estonian companies (the tax has already been paid at corporate level). However, dividends from foreign companies may be subject to different rules.
Rental income: Rental income is subject to income tax. You can choose between:
Standard taxation (rental income minus expenses, taxed at 20%)
Simplified taxation (rental income minus 20% standard deduction, taxed at 20%)
Capital gains: Profits from selling investments are generally taxed as regular income (20% for amounts up to €25,200 annually, 0% on amounts above that threshold under Estonia’s unique system where retained earnings aren’t taxed).
Interest income: Interest earned from savings accounts, bonds, and peer-to-peer lending is subject to income tax at 20%.
Business income: If your passive income activities constitute business activity, you may need to register as a sole proprietor (FIE) or establish a company, with corresponding tax obligations.
Always consult the Estonian Tax and Customs Board (Maksu- ja Tolliamet) or a tax advisor for your specific situation, as rules can be complex and change over time.
How to make passive income online
Making passive income online requires some initial work to create and market your online content, but once you’re up and running, you might not have to do much.
Set up an affiliate marketing business
If you have a social media presence, YouTube channel, or blog with lots of followers, affiliate marketing could be for you. You create an affiliate account with a brand and receive a customized link you can share wherever you like. Every time a viewer uses your link to purchase the product, you earn a commission.
Estonian bloggers and content creators can join international affiliate programmes (Amazon Associates, eBay Partner Network) or Estonian/Baltic-specific programmes. Remember that affiliate income is taxable and may require business registration if earnings are substantial.
Write a book
Whether it’s a memoir, fiction, or how-to book, you can publish your own e-books and make money from downloads. Subject matter experts can leverage their expertise to create high-value e-books that generate passive income.
Simply write a manuscript, design a cover, and choose a publishing platform such as Amazon’s Kindle Direct Publishing and Barnes & Noble Press. Estonian authors can also consider local platforms or publish in Estonian language for the domestic market, though the international English-language market offers larger potential audiences.
Develop an online course
If you have a special skill or area of expertise, you can create courses or seminars and sell those online through sites such as Udemy or Skillshare. After the initial work is done, you may reap sales long into the future.
Consider creating courses in Estonian for the local market or in English for international audiences. Topics particularly relevant in Estonia might include digital nomad skills, e-residency business setup, or Estonian language learning.
Sell photography online
Do you have photos that could be useful for websites, publications, or social media? Amateur photographers can make passive income by selling their photos online at sites like iStock, Adobe Stock, and Shutterstock.
Estonian nature, architecture (particularly Tallinn’s Old Town), and cultural subjects are in demand. Build a portfolio showcasing unique Baltic perspectives that stand out in international stock photo markets.
Sell graphic designs
You can sell your designs via a print-on-demand website like Zazzle, Society6, or RedBubble. Shoppers can buy your graphics printed on a variety of products, from T-shirts to mugs and home decor. The websites handle taking payments and fulfilling orders—all you have to do is upload your designs and collect your share of the profits.
Sell digital products
Have you created useful and appealing digital assets? Upload and sell templates for just about anything—from worksheets and planners to presentations and resumes—at sites like Etsy or Creative Market.
Consider creating Estonian-language templates or resources specifically designed for Estonian businesses, which face less competition than English-language products.
Warning: Watch out for passive income scams, such as pyramid schemes or courses that promise to teach you how to earn passive income but aren’t worth the money. If something sounds too good to be true, it probably is.
Estonian e-residency opportunities
Estonia’s e-residency programme offers unique opportunities for passive income generation. As an e-resident, you can establish and manage an EU-based company entirely online, opening doors to:
Providing digital services to international clients through your Estonian company
Dropshipping businesses with minimal ongoing involvement
Digital product sales through an EU-registered entity
Access to European payment processors and banking
Whilst not entirely passive (some administration is required), e-residency can facilitate business structures that generate income with minimal active involvement once established.
How to make passive income by investing
Investing can generate passive income over time if your investments increase in value. Just keep in mind that all investments involve risk, some more than others.
When considering investments for passive income, it’s important to include financial planning as part of your overall strategy. For guidance on managing investments during economic challenges, see our article on cost-of-living crisis investing.
Explore dividend investing
Some companies issue dividend payments to stockholders on a regular basis as a way of sharing profits. Dividends can provide an ongoing income stream without the need to sell the stock.
Estonian investment platforms:
Estonian residents can access dividend investing through:
LHV (Estonian bank with comprehensive investment platform)
SEB (offers investment accounts and portfolio management)
Swedbank (investment services for retail investors)
Interactive Brokers (popular for international diversification)
Lightyear (modern Estonian-founded investment app)
You can purchase individual dividend stocks traded on Nasdaq Tallinn (Estonian stock exchange), other European exchanges, or international markets. Consider investing in mutual funds or exchange-traded funds (ETFs) that purchase a variety of dividend stocks for easier diversification.
Baltic and Nordic dividend stocks:
Consider companies listed on Baltic and Nordic exchanges that many Estonian investors know:
Major Finnish companies (Nokia, Nordea)
Swedish blue chips (Volvo, Ericsson)
Baltic companies on Nasdaq Tallinn (Tallinna Sadam, Enefit Green)
Remember that dividends from Estonian companies have already been taxed at the corporate level (20%), whilst foreign dividends may face different tax treatment depending on tax treaties.
Invest in bonds
When you buy a bond, you’re loaning money to a company or government entity that promises to pay you back when the bond matures, typically in anywhere from one to 30 years. Most bonds offer a fixed interest rate, with recurring interest payments every six months based on the bond’s coupon rate.
Estonian investors can purchase:
Estonian government bonds (considered very safe, lower yields)
Other EU government bonds through Estonian brokers
Corporate bonds from Estonian and international companies
Bond ETFs and mutual funds
Interest income from bonds is taxable in Estonia at 20%. You can invest in bonds individually or through a bond mutual fund or ETF available through LHV, SEB, or Swedbank.
Peer-to-peer lending in Estonia
Peer-to-peer (P2P) lending connects individual lenders directly with borrowers through online platforms. This alternative to traditional bank loans has grown significantly in the Baltic region.
Estonian and Baltic P2P platforms:
Bondora (Estonian platform): Founded in 2009 and headquartered in Tallinn, Bondora is one of Europe’s oldest P2P lending platforms. Their “Go & Grow” product offers a simplified investment option with returns around 6.75% annually (rates vary). Bondora operates across several European countries, though loan origination focuses on Estonia, Finland, and Spain.
Mintos (Latvian platform, popular in Estonia): One of Europe’s largest P2P marketplaces, Mintos connects investors with loan originators across multiple countries. Estonian investors frequently use Mintos for diversified P2P exposure.
Important warning—Kuetzal collapse:
Estonian residents should remember the cautionary tale of Kuetzal, an Estonian P2P platform that collapsed in 2020, leaving investors with significant losses. This demonstrates that P2P lending carries substantial risks:
Platform risk (platform itself may fail)
Borrower default risk
Lack of deposit insurance protection
Potential total loss of invested capital
How P2P lending works:
You invest money through the platform, which facilitates loans to borrowers. As borrowers repay their loans (principal and interest), you receive returns. You can often start with as little as €10, spreading risk across multiple loans.
P2P platforms charge various fees (servicing fees, late payment fees, withdrawal fees). Review all applicable fees carefully, as they impact your overall returns. Interest income from P2P lending is taxable at 20% in Estonia.
Only invest money you can afford to lose completely. P2P lending should represent a small portion of a diversified investment portfolio.
Become a silent partner in a business
Do you know a friend, family member, or associate who’s starting or growing a promising business in Estonia? You can invest money as a silent (limited) partner and share in the profits without being actively involved in day-to-day operations.
Work with an Estonian attorney to create a partnership agreement (osanikukokkulepe) that details how you’ll be repaid, which may include equity in the business, profit sharing, or both. Although you risk losing your investment, you could see significant income if the business succeeds.
How to make passive income through property in Estonia
Real estate is a popular way to generate passive income, with various options depending on your financial resources. The Estonian property market offers opportunities particularly in Tallinn, Tartu, and other growing cities.
Buy a rental property
Purchasing a rental property in Tallinn, Tartu, or another Estonian city can provide steady income. The Estonian rental market has been strong, particularly in university cities and the capital.
Estonian rental market reality:
Tallinn:
One-bedroom apartment: €500-900 monthly rental income
Two-bedroom apartment: €700-1,200 monthly
Three-bedroom: €900-1,500+ monthly
Student areas and Old Town command premium rents
Tartu:
One-bedroom: €350-600 monthly
Two-bedroom: €500-800 monthly
Strong student rental market (University of Tartu)
Other cities (Pärnu, Narva, Viljandi):
Lower rental yields but also lower property prices
€300-500 monthly typical for standard apartments
Financial considerations:
Research the market thoroughly using Kv.ee (Estonia’s largest property portal) and City24.ee to check average rent on similar properties. You’ll need to charge enough to cover your mortgage payments, korteriühistu (apartment association) fees, maintenance, repairs, and other costs whilst generating profit.
Mortgages for investment properties typically require 15-30% down payment, with interest rates higher than owner-occupied properties. Consider who will maintain the property and address tenant needs, especially if you don’t live nearby.
Tax implications:
Rental income is taxable. You can deduct actual expenses (repairs, interest, insurance) or use a 20% standard deduction. Choose the method that minimizes your tax burden. Report all rental income to the Estonian Tax and Customs Board.
Rent out a room to travellers
If you have a spare room in your home, you can earn passive income by renting it out through short-term rental services such as Airbnb.
Tallinn regulations:
Be aware that Tallinn has implemented regulations on short-term rentals:
Limit of 90 days per year for entire apartment rentals in some residential buildings
Registration requirements with the City of Tallinn
Potential korteriühistu restrictions (your apartment association may prohibit short-term rentals)
Need for proper home insurance covering short-term guests
Insurance considerations:
Standard home insurance may not cover commercial short-term rental activity. Ensure your home insurance policy explicitly covers Airbnb-style hosting, or purchase additional coverage. Major Estonian insurers include If, Seesam, Gjensidige, and Compensa.
Tax obligations:
Income from short-term rentals is taxable. Register with the Tax Board and declare all rental income. If operating regularly, you may need to register as a sole proprietor (FIE).
You’ll have best success if you live in or near Tallinn’s Old Town or other tourist areas. Properties with private entrances and bathrooms command premium rates.
Get a roommate
For long-term passive income from a spare room, consider taking in a roommate. You’ll get ongoing financial help paying your rent or mortgage—and maybe make a new friend too.
List your room on:
Kv.ee (Estonia’s largest property portal, with roommate section)
Facebook groups (many Estonian city-specific housing groups)
City24.ee (another major Estonian property site)
International sites like Roomster (for international students/workers)
In Tallinn, a room in a shared apartment typically rents for €250-450 monthly, helping significantly with housing costs. In Tartu and other cities, expect €200-350 monthly.
Legal and tax considerations:
If you’re renting out a room in your primary residence, the income is still taxable, though some landlords don’t declare it (which is illegal and risky). Proper declaration protects you legally and ensures everything is above board.
Real estate investment trusts (REITs)
Real estate investment trusts offer a way to invest in real estate without the upfront expense or management hassles of being a landlord. REITs invest in commercial and residential real estate, receive rental income from tenants, and share the income with shareholders, typically as quarterly dividends.
Accessing REITs as an Estonian investor:
Estonian investors can access REITs through:
International REITs listed on major exchanges (US, UK, EU)
REIT-focused ETFs available through LHV, SEB, Swedbank, or Interactive Brokers
Nordic property companies with REIT-like structures
Because REITs can be risky and choosing them can be complex, consider working with a financial advisor. Dividend income from foreign REITs may face withholding taxes depending on tax treaties.
Real estate crowdfunding
Real estate crowdfunding platforms allow you to invest in property with smaller amounts of capital than traditional real estate investment requires.
Platforms accessible to Estonian investors:
EstateGuru (Estonian platform, focuses on Baltic and European property loans)
Reinvest24 (Estonian platform for fractional property investment)
Crowdestate (Estonian platform offering various real estate opportunities)
These Estonian-founded platforms allow you to invest from €50-100, spreading risk across multiple properties. Returns typically range from 8-12% annually, though this comes with risks including borrower default and platform risk.
Risks to consider:
Real estate crowdfunding is relatively new and largely unregulated. You could lose your entire investment if projects fail or platforms encounter problems. Only invest money you can afford to lose, and diversify across multiple projects and platforms.
How to make passive income with no money
Even if you don’t have money to invest, there are still ways to make passive income.
Use a rewards credit card
Use credit cards that offer rewards to earn money whilst you shop. Look for a card that offers rewards in categories you often use, such as groceries or restaurant meals.
Estonian credit card reality:
Estonian credit card rewards programmes are generally less generous than those in the UK or US, but some cards offer cashback or points. Banks like SEB, Swedbank, and LHV offer cards with varying reward structures.
Review our guide to the best credit cards in Estonia for current options, including:
Cashback percentages (typically 0.5-2%)
Points programmes that can be redeemed for goods or travel
Partner discounts and benefits
Just make sure you don’t overspend or buy things you normally wouldn’t purchase to earn rewards. Pay off your balance in full each month to avoid interest charges that would negate any rewards earned.
Rent out your car
Is your car gathering dust? It could be making you money instead. List your vehicle for rent on car-sharing platforms.
Estonian car-sharing options:
Bolt Drive (allows private car sharing in Estonia)
Check with platforms like Getaround for Estonian operations
Car-sharing platforms typically offer insurance coverage whilst your car is rented. However, check with your Estonian car insurance provider (If, Seesam, Gjensidige, Compensa) to ensure renting out your car won’t affect your coverage.
Realistic earnings:
In Tallinn, you might earn €30-70 per day when your car is rented, though it won’t be rented constantly. Factor in wear and tear, additional cleaning, and your own inconvenience when your car isn’t available.
Rent out your garage or parking space
If you have extra room in your garage or driveway, you can rent it out.
Estonian parking rental reality:
In Tallinn’s city centre, Old Town, or near major offices, parking spaces are valuable. You might earn:
City centre/Old Town: €80-150 per month
Residential areas near centre: €50-100 per month
Outside central Tallinn: €30-60 per month
Tartu and other cities: €25-50 per month
Use platforms like:
Kv.ee (has sections for parking rental)
City24.ee (also lists parking spaces)
Local Facebook groups for your neighbourhood
Other ways to make passive income
You can also generate passive income by saving money and earning interest on your savings.
Open a high-yield savings account
To earn more interest on your savings than a traditional savings account offers, consider opening a high-yield savings account.
Estonian high-yield savings options:
Estonian banks offer various savings products:
LHV Growth Account: Competitive interest rates for larger deposits
SEB savings accounts: Various term options with different rates
Swedbank deposit accounts: Fixed-term deposits with guaranteed returns
Luminor savings products: Compare rates regularly
Currently (rates fluctuate), you can find Estonian savings accounts offering 2-4% annual interest, depending on deposit amount and term. Your cash is liquid and readily accessible if you need it for emergencies.
Interest earned is subject to 20% income tax in Estonia, deducted automatically by banks.
Look for ways to save money
Whilst it’s not exactly income, finding ways to save money can bring in extra cash without much effort on your part.
Review your recent bank and credit card statements to tally up your spending and look for places you could cut back. For example, you could:
Cook at home more often and eat out less
Negotiate your utility, broadband, or mobile bills (call Elisa, Telia, Tele2)
Cancel streaming services or downgrade to cheaper plans
Use public transport more instead of driving (especially in Tallinn where public transport is free for residents)
Shopping around and comparing quotes for your home insurance or car insurance is another way to find potential savings. Estonian insurance markets are competitive, with providers like If, Seesam, Gjensidige, Compensa, and ERGO offering varying rates.
Growing your wealth
Growing your wealth is a long-term process that requires patience, discipline, and a well-thought-out investment strategy. One effective approach is to invest in dividend stocks, which pay dividends regularly and can appreciate in value over time, providing both an income stream and the potential for capital gains.
Real estate investment trusts (REITs) are another way to invest in real estate markets without the challenges of managing properties yourself, allowing you to earn a share of rental income and property appreciation.
Peer-to-peer lending is gaining popularity as a way to lend money directly to borrowers through Estonian and Baltic platforms like Bondora and Mintos, earning interest as they repay their loans. However, remember the Kuetzal collapse and only invest what you can afford to lose.
By diversifying your investments across different asset classes—such as dividend stocks, REITs, and peer lending—you can reduce risk and increase your chances of steady growth. The key to building wealth is to invest consistently, reinvest your earnings, and take a long-term view, allowing your money to compound and work for you over time.
For guidance on building investment portfolios during economic uncertainty, see our article on cost-of-living crisis investing.
Creating a passive income strategy
Developing a passive income strategy starts with identifying the right opportunities that align with your financial goals and risk tolerance. Popular passive income ideas for Estonian residents include investing in rental properties in Tallinn or Tartu, dividend funds through Estonian brokers, and peer-to-peer lending platforms like Bondora.
Rental properties can provide steady rental income, particularly in Estonia’s university cities. Dividend funds pay out regular dividends from a diversified pool of stocks. Peer lending allows you to earn interest by funding loans to borrowers, though with significant risks.
Creating your Estonian passive income strategy:
Assess your current financial situation: Use our finance health check to understand your starting point.
Understand Estonian tax implications: Consult the Estonian Tax and Customs Board or a tax advisor about how different passive income sources will be taxed.
Start with low-risk options: High-yield savings accounts through LHV, SEB, or Swedbank, or dividend ETFs offer lower risk for beginners.
Diversify gradually: Don’t put all funds into one passive income stream. Spread across property, investments, and online income.
Reinvest earnings: Compound your returns by reinvesting passive income back into wealth-building activities.
Consider property carefully: If buying rental property, understand Estonian property rights and how ownership structures work, particularly for married couples.
Manage debt wisely: If you have existing debts, consider our debt snowball strategy or debt avalanche method before investing heavily in passive income.
Monitor and adjust: Regularly review your passive income streams. What works well? What underperforms? Adjust your strategy accordingly.
Remember: while passive income can eventually provide financial freedom, it often requires an initial commitment of time and money to set up. With careful planning and ongoing management, your passive income strategy can become a reliable source of revenue for years to come.
The bottom line
Establishing passive income streams can help you achieve your long-term financial goals and become financially resilient in Estonia. You can use the added income to add to your retirement savings, pay down debts, or put toward a down payment on a house in Tallinn, Tartu, or elsewhere in Estonia.
Good financial habits like paying bills on time and minimizing credit utilization can help boost your credit score and expand your financial options. Before embarking on your passive income journey, ensure you have proper home insurance if pursuing property strategies, understand property rights in Estonia, and maintain good financial health overall.
Start with one or two passive income streams that match your resources and risk tolerance. As you gain experience and see returns, you can gradually expand your portfolio. The key is to start—even small passive income streams can grow significantly over time through reinvestment and compound growth.
Remember that whilst all passive income requires some effort to establish and maintain, the goal is to create revenue streams that work for you rather than you constantly working for money. With Estonia’s digital infrastructure, favourable business environment, and growing economy, Estonian residents have excellent opportunities to build meaningful passive income that supports long-term financial security.