Whether you start an online business or your business exists for some time, you probably want to know what is […]Read more
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.
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.
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.
The procedure for registering a company in Estonia 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.
Registered address is an official address of an Estonian company used for registration purposes. The registered address is shown in the Commercial Register and is used for official correspondence. That is why, all Estonian companies are required to have a registered address in the country.
For the company incorporation in Estonia, the following documents are required:
- Certified copy of International Passport
- Certified copy of EU issued ID card
- Utility bill no older than 3 months
- Copy of official ID document showing address
- Bank account statement or bank reference letter showing address of UBO
- Signed Nominee (Trust) agreement
- Meeting or call is held with UBO -> completed UBO identification form
- Form completed by EST office
- Consent signed by UBO
- Certified POA signed by UBO
- 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.
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.
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.
Estonian legislation does not set any limits on the residence of shareholders and directors (except for residency requirement in branch).
No company secretary is required in 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.
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.
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.
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.
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.
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).
You can use our checklist for rapid company formation in Estonia which allows you to prepare all necessary documents and information as quickly as possible:
- check the proposed company name with trademark register to ensure your company name is unique;
- obtain a registered address in Estonia;
- define categories of business activities;
- prepare all set of documents for submitting to the Registrar in Estonia, including certified copy of passport of each shareholder, address confirmation document of each shareholder and then complete EST office form.
All incorporation procedures in Estonia takes 2 days. The total term of company formation in Estonia with opening a bank account is 2-3 weeks, provided that the bank does not request for additional documents as a part of an identity check. The process of opening a bank account starts after the company is incorporated.
A private liability company is the most commonly used type for company formation in Estonia. Company formation in the form of PLC (or OÜ in Estonian) allows the shareholders to avoid personal liability for company obligations as each shareholder is responsible within the limits of its share
It is not required to visit Estonia for company incorporation as all procedures are done online. The Estonian Commercial Registrar provides a digital friendly website which allows to register and manage the company remotely.
If you have any questions with company formation in Estonia, including with the preparation of necessary documents, feel free to contact us for further details.
Company formation in Estonia is a rapid and simple procedure, as all documents are submitted online through a convenient governmental portal. If you plan to incorporate a company by yourself, then it is advisable to follow the Commercial Registrar’s guidelines or read our articles about company formation in Estonia. Additionally, you may require additional services, such as the registered address of translation services which would simply the whole process. For rapid company formation in Estonia it is vital to have a registered address and appoint a director.
Please feel free to contact Ecompany.ltd for registration services and registered address in Estonia, including Tallinn.
Company formation in Estonia is available for residents and non-residents. The set of necessary documents to be submitted for registration is similar for any citizens or residents. However, non-residents are required to translate documents into English with a notary certification, if such documents are in a foreign language. Moreover, Estonia provides an e-residency program for foreign citizens which allows them to incorporate a company in Estonia and further open a bank account in an EU bank.
A shelf company in Estonia, also called a “blank company”, or “aged company”, is a company that is established as a ready-made company for clients wishing to buy a company that has business licenses, such as a virtual wallet license in Estonia.
Usually, it is much cheaper and faster to incorporate a new company, since online company formation enables to complete registration procedure within a couple of days. However, some customers wish to buy a ready-made company in Estonia that already has business licenses.
Buying a company with a business license in Estonia allows you to save up to 60 days in comparison to incorporation of a new company. In contrast to a company formation, if you buy a ready-made company for sale in Estonia with a license you can start your licensed business in a couple of days.
Please contact us for further details if you are interested in companies with business licenses in Estonia (e.g. virtual wallet license in Estonia).
In contrast to other jurisdictions, a company doing business outside of Estonia is not considered as an offshore company. So, it is not correct to refer to an offshore company formation services in Estonia. However, the low taxes in Estonia makes this country not less competitive as classical offshore jurisdictions.
Estonia has many tax and operational advantages that are not less competitive as classical offshore jurisdictions, such as:
- nominal services in Estonia
- lowest taxes in the EU, including 0% corporate tax
- e-residency in Estonia
- rapid company formation in Estonia within 2 days
Ecompany.ltd provides online company formation services in Estonia. Our flexible company incorporation services in Estonia include:
- Low registration fees
- Nominal services, including registered address in Estonia
- Accounting, tax and legal services
- Obtaining business licenses in Estonia
- Online company formation in Estonia
- Opening a bank account
To incorporate or purchase a company in Estonia or worldwide, please contact us for further details.
The cost of company incorporation in Estonia is Euro.
Online company formation on eCompany.ltd
- You can easily search whether your chosen company name is available for registration in Estonia. To check the name, please enter the company name in a search field under the top banner on this page and then click “find out”.
- If your chosen company name is available, you can start the process of company formation.
- At checkout, please fill in your personal information and account details for account registration on eCompany.ltd. You can add additional notes or information in your order.
- Complete your order with your preferred method of payment.
- Once your payment is processed, we will contact you about the necessary documents that we need to receive from you in order to prepare incorporation documents on your behalf.
- We will prepare the incorporation documents and submit them for company formation in Estonia.
- Once the company is incorporated in Estonia, we will send you a standard set of original corporate documents. Please make sure that you entered your correct mailing address.
Taxes in Estonia
Estonia is considered to have one of the simplest tax regimes in the world. In Estonia taxes are imposed on state and local levels. Company taxes in Estonia that are imposed at a state level include income tax, social tax, land tax, gambling tax, value-added tax, customs duty, excise duties and heavy goods vehicle tax. Corporation taxes in Estonia are one of the lowest in Europe. All business taxes are collected by the Tax and Customs Board and can be conveniently submitted online.
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.
Period of taxation for legal entities and non-residents with permanent establishments in Estonia is one calendar month.
The corporation tax deadline for filing and paying income tax is not later than the 10th day of the following month. Tax returns in Estonia can be submitted electronically.
Estonia does not imply corporate income tax on retained and reinvested profits.
Corporate income tax rate in Estonia is 20% of the gross amount tax with respect to all distributed profits. The business tax rate on distributed profits include such profits as gifts, donations, corporate profits, expenses not related to business and transfer of the assets of a PE to its head office or other companies.
The tax rate for companies operating in Estonia in the form of a limited company is 20% of the gross amount tax with respect to all distributed profits. There is no reduced tax rate for small businesses. However, if an Estonian company pays dividends on a regular basis, then the corporation tax rate is reduced to 14%.
The corporation tax rate for tax resident companies and PEs is 0% income tax on reinvested and retained profits. The corporation tax rate on distributed profits is 20%. Since the rates of corporate tax are reviewed annually, please contact eCompany.ltd to get updated information.
Similar to the corporation tax rate as given above, the limited company tax in Estonia is currently 0% on reinvested and retained profits and 20% on distributed profits.
The corporation tax is payable for each month.
Overseas companies are subject to Estonian corporation tax on income derived in or from Estonia. The corporation tax rate for tax resident companies and PE of overseas companies is 0% income tax on reinvested and retained profits. The corporation tax rate on distributed profits is 20%.
The rate of capital gains tax is 20% on profit earned as a result of a sale of shares in Estonia. It is not possible to avoid capital gains tax on shares, but it is allowed to delay taxation of investment income with an investment account.
Corporate income tax in Estonia is levied on a company’s distributed dividends. The current tax rate on Estonian dividends is 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.
Foreign dividends to an Estonian company are subject to corporate income tax in Estonia on the level of first appearance of profit. In this case the company dividend tax is 20%.
Dividends from an Estonian limited company to a foreign legal entity may be exempt from taxation in accordance with a double taxation treaty.
Withholding tax on dividends is not paid in Estonia. The 7% withholding tax on dividends is paid by resident companies if the dividend distribution was subject to a reduced corporate income tax by a paying company.
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.
Royalties to resident entities are taxed at the rate of 20% of withholding tax. 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. No tax in Estonia applies if royalty is paid to a related party in another EU member state or Switzerland.
Capital gains paid upon distribution are taxed at the rate of 20%.
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.
Small businesses may enjoy the reduced VAT rate of 9% if they sell books, newspapers, journals as well as e-books, recorded audiobooks, digitally posted educational materials, online journals and online newspapers.
The VAT registered threshold in Estonia is nil. It is mandatory for all Estonian companies to get VAT registration number once they start selling. For non-Estonian companies selling to Estonia, the VAT threshold is €35,000 per annum.
All investment income is subject to the Estonian taxation. Investment is regarded as dividends. The tax rate on dividends is 20% in Estonia.
The income derived from the sale and assets gained as a result of the sale are qualified as capital gains. The capital gains tax should be paid for income derived from the sale of shares at the rate of 20%.
As in other jurisdictions, a liquidation of a company in Estonia can be done voluntary or involuntary.
A company in Estonia can be terminated by the court decision in case a company fails to comply with legal requirements.
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.
In most cases, a company in Estonia is liquidated on a voluntary basis by the decision of shareholders.
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.
Contact Us & Get Professional Consultation!