Interested to register a company in Estonia?
Main characteristics for registration in Estonia
Best choice for:ICO
Time to complete the registration3 days
Company Registration in Estonia
Estonia is a small country located in Baltic Sea Region. With its favourable economic environment, stable government, liberal economic rules and ease of company formation, it already attracted numerous international companies. The Estonian Government highly welcomes foreign capital and especially businesses in high-technology and innovative sectors.
Estonia is the first country that offers e-Residency, which is a government-issued digital ID available to anyone in the world.
This article gives you an overview on how to set up a company in Estonia and key points on how your business can benefit from it.
Tips: You should definitely consider an opportunity for your business to be operated in one of the free trade zones in Estonia: at the ports of Muuga; Paldiski and Sillamäe in the northern coast of Estonia as well as in Valga in the south-east Estonia. Please contact us to get more details.
What types of legal entities is it possible to incorporate in Estonia?
Foreign companies and citizens may register the company in Estonia in the following types:
- Private Liability Company (OÜ): has a share capital divided into private limited company shares and shareholders are not personally liable for company obligations. The minimum share capital is EUR 2,500. This type of legal entity also allows expedited procedure for formation of the company. In particular, the applicant must present all necessary documents to the Commercial Register electronically and authenticate the documents with digital signature.
- Public Liability Company (AS): along with OÜ this is the most commonly used type of legal entity in Estonia. Such companies are liable for its obligations by their assets. The minimum share capital is EUR 25,000.
- Partnerships: there are two types of partnerships: general partnership (TÜ) and limited partnership (UÜ). General partnership consists of two or more partners who are solely liable for obligations of the legal entity with all their assets. On the contrary, in the limited partnership only one partner has full liability (general partner) and at least one of the persons (limited partner) is liable for the obligations of the limited partnership to the extent of the limited partner’s contribution.
- Commercial Association: this is the legal entity formed by its members through joint economic activity.
- Sole proprietorship
- Branch: a subsidiary of foreign company with no requirement as to the authorized capital. The branch may have one or more directors, provided that at least one director is the resident of EU member state or Switzerland.
Company registration documents to be submitted depend on the type of legal entity you choose from.
How to register a company name in Estonia?
There is no requirement to register a company name in Estonia before submitting documents for registration. In general, company names in Estonia should be unique. It is not allowed to use names that are offensive or contain any registered European or Estonian trademark. The company name cannot be misleading to the scope of company activity, legal form or be unethical.
It means that though you do not need to reserve a company name, you still need to check whether any similar company name exists in Estonia. Besides, it is necessary to check registered trademarks to avoid any risks related to trademark infringement. At this point, it is advisable to choose several names and conduct an advanced search.
The company name must be indicated in the Articles of Association or other document to be submitted to the Commercial Register. The name must be in Estonian and can have an English equivalent. All changes to the company name should be registered in the Registrar of Companies.
How long does it take to register a company in Estonia?
The procedure for registering a company in Cyprus is rather quick and it may take from a few days up to a couple of weeks.
Tips: as it was earlier mentioned, Estonia is the first country to offer e-Residence. The e-Residency allows to start a company online from anywhere in the worlds. The e-Resident may access business banking and online payment service providers. It also allows to easily declare taxes online. The
E-Resident does not need to go to Estonia to manage the business, as it is permitted to operate the company online from anywhere in the world. Please contact us to learn more details and potential opportunities.
What are company incorporation documents in Estonia?
For the company incorporation in Estonia, the following documents are required:
Signed Nominee (Trust) agreement
Meeting or call is held with UBO -> completed UBO identification form
If UBO from country with agreement with EST: certification by public notary
If UBO from other country: certification by public notary + apostille
If you use the services of Ecompany.Ltd, then we take all paperwork on ourselves and submit the documents to the Estonian companies’ registrar. We will notify you on the official decision within 2 days.
What is Registrar of Companies Estonia?
The Registrar of Companies in Estonia is responsible for company formation and management of registration of company details during its existence. Through the Registrar of Companies, it is possible to obtain the following information about each company:
- company name
- company registration number
- date of incorporation
- legal type of company
- main business activities
- legal address
- company contact details
- information about director, including full name, ID, date of birth and appointment date
- authorized capital
- information about shareholders, including full name, number of shares
- company status (e.g. registered, or in liquidation)
It is required to apply for a change of any of the above details to the Registrar of companies.
You can use our website to check companies registered in Estonia and its details.
What are the requirements for company names in Estonia?
Estonian legislation does not provide any obligation to get any prior approval for the company name. The company name must be indicated in the Articles of Association or other document to be submitted to the Commercial Register. The name must be in Estonian and can have an English equivalent. The company name cannot be misleading to the scope of company activity, legal form or be unethical.
Is there a residence requirement for directors and shareholders in Estonian companies?
Estonian legislation does not set any limits on the residence of shareholders and directors (except for residency requirement in branch).
Is it required to have a company secretary in Estonia?
No company secretary is required in an Estonian company.
What are the accounting requirements for an Estonian company?
Estonian companies are required to prepare a financial statement on an annual basis according to the standards of IFRS as adopted by the European Union. Annual reports are submitted in an electronic form through Commercial Register online portal.
Company director(s) are responsible for maintaining of accurate books and records. All transactions shall be documented and documents thereof preserved for seven years as of the end of the financial year during which the source document was recorded.
Tips: the content and volume of the annual report depends on the size of the company. As an instance, small-sized entity submits long or abridged balance sheet, and income statement; specified information in limited amount of notes and management report. Medium-sized entity prepares full financial statements in accordance with Estonian GAAP or IFRS as endorsed by the EU and management report.
What is the company registration fee in Estonia?
Estonia is one of the most attractive jurisdictions which has an ideal combination of minimal costs for registration and hassle-free incorporation. Both local and foreign entities can incorporate an Estonian company by themselves.
In the meantime, you should have a local legal address in order to set up a company. For this purpose, you can hire an agent that will provide you with a legal address. For example, Ecompany Ltd. provides full registration services in Estonia, prepares and submits necessary documents, pays state fee. We provide legal support with opening a bank account for your company. We act on your behalf and assist you with any matters you may have in connection with incorporating a company in Estonia.
The minimum paid share capital is €2,500.
Additionally, you may become Estonian e-resident which gives you an opportunity to become a digital resident of Estonia and hold a digital ID. You can start your business in the EU and enter the EU market with it.
The fee for the company registration in Estonia is €950.
What is the company registration process in Estonia?
The company registration process in Estonia is quick and simple.
Once all documents are ready and submitted, it takes 2 days to complete the registration process.
- checking the proposed company name;
- obtaining a legal address in Estonia;
- defining categories of business activities;
- preparing all set of documents for submitting to the Registrar;
- submitting documents to the Registrar;
- receiving digital registration confirmation;
- opening a bank account.
The whole process of company registration can be done online. Or alternatively, you can use the services of Ecompany.Ltd if you need our support for company formation. You do not need to visit Estonia for this purpose.
How to get a company incorporation certificate in Estonia?
Estonia provides modern digital solutions for company formation. All registration process is paperless. As a result, you can register and manage your Estonian company online. All further formalities can be done through the use of your digital signature.
In certain cases, you may need to have company incorporation certificate in Estonia in order to make sure your company really exists, or you may need it for your business partners or governmental authorities.
It is possible to access public records of companies in the Registrar of Companies to check the latest information of each Estonian company. The Registrar does not send any paper certificates, but you can order an extract for the Registrar and receive a tax residency certificate with signature and stamp of the Estonian Tax and Customs authority.
How long does it take to register a company in Estonia?
The procedure for registering a company in Cyprus is rather quick and it may take from a few days up to a couple of weeks. Once all documents are submitted to the Registrar, the process takes 2 days.
When is it obligatory to audit an Estonian company?
Public limited companies are subject to audit. In addition, audit or review is mandatory if an entity exceeds certain quantitative thresholds (consolidating entities apply the thresholds to the consolidated numbers).
What is the cost of company formation in Estonia?
The cost of company incorporation in Estonia is Euro.
Taxes in Estonia
Estonia is considered to have one of the simplest tax regimes in the world. In Estonia taxes are imposed on a state and local levels. State taxes include income tax, social tax, land tax, gambling tax, value-added tax, customs duty, excise duties and heavy goods vehicle tax. On the state level taxes are collected by the Tax and Customs Board.
What companies are qualified as tax residents in Estonia?
A legal entity is a tax resident in Estonia, if it is incorporated in Estonia. However, it is necessary to take into account whether a legal entity is also a tax resident of another country. In this case, the tax residency is defined based on a relevant tax treaty.
What is a taxable period in Estonia?
Period of taxation for legal entities and non-residents with permanent establishments in Estonia is one calendar month.
What is corporation tax rate in Estonia?
Corporate income tax rate in Estonia is 20% of the gross amount. The income tax shall be returned and paid on a monthly basis. Tax returns in Estonia can be submitted electronically.
How are dividends taxed in Estonia?
Corporate income tax in Estonia is levied on a company’s distributed dividends at the rate of 20%. The profit is not subject to corporate income tax until profit distributions are made. For example, distribution of dividends and profit distribution via reduction of share capital are taxable with corporate income tax.
Withholding tax in Estonia on interest does not apply to non-residents. Royalties (including payments for the use of industrial, commercial, or scientific equipment) paid to non-residents are generally subject to 10% withholding tax under Estonia law, but reduced rates or exemptions may apply under double tax treaties.
What is interest tax rate in Estonia?
As a general rule, interest paid to non-residents is not subject to withholding tax in Estonia. An exception applies to the portion of interest that significantly exceeds the market interest rate. In this case, 20% rate is paid to the amount exceeding fair market interest.
What is royalties tax rate in Estonia?
Royalty paid to non-residents is subject to 10% tax at source. No tax in Estonia applies if royalty is paid to a related party in another EU member state or Switzerland.
What is capital gains tax rate in Estonia?
Capital gains paid upon distribution is at the rate of 20%.
What is VAT rate in Estonia?
The main indirect tax in Estonia is a value-added tax (VAT) set at a standard rate of 20%. Reduced rates of 0% and 9% apply to some goods and services, including a 0% rate on exported goods and a specific list of exported services.
As in other jurisdictions, a liquidation of a company in Estonia can be done voluntary or involuntary.
What are the grounds for involuntary liquidation in Estonia?
A company in Estonia can be terminated by the court decision in case a company fails to comply with legal requirements.
What is the procedure of involuntary liquidation in Estonia?
A court appoints a liquidator responsible for all formal actions. A notification of company’s liquidation is published in the Official Gazette. Along with it, the liquidator prepares balance sheet and distributes remaining assets within 6 months after the notification in the Gazette. Once all debts are settled, the company is formally liquidated.
What are the grounds for voluntary liquidation in Estonia?
In most cases, a company in Estonia is liquidated on a voluntary basis by the decision of shareholders.
What is the procedure of voluntary liquidation in Estonia?
Following the decision, the management board submits a request to the Commercial Register which can be done online through company registration profile. The shareholder’s resolution shall contain provisions on appointment of liquidators and entry their names into the Commercial Register. A final balance sheet and asset distribution plan is also submitted to the Commercial Register. Once all the debts have been paid to creditors and all the tax liability has been satisfied, the company is dissolved and cancelled in the Register of Companies.
Note: it should be noted that at least on liquidator of an Estonian company must be a resident of Estonia.
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