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Company registration in Estonia
If you’re looking to venture into a European country and leverage its strategic placement, start a company in Estonia is a perfect choice for many business owners.
Known for its entrepreneurial prowess, many of the world’s renowned start-ups have emerged from this small northern European country. You can set up a lucrative Estonian company with the help of CompyCo’s experts and enjoy the various benefits this sparsely populated country has to offer.
Estonia is at the forefront of cyber security, cryptocurrency businesses, digital capability, and global business services, made possible by its innovative digital infrastructure and minimal bureaucratic structures. Known for the ease of doing business and its expertise in foreign activity, Estonia is a unique and lucrative market for international investors to tap into.
Conveniently located within reach of Russia, Scandinavia, and Central Europe, Estonia’s competitive economy supports many successful start-ups and multinational companies with its information technology advancements.
Digitization is the way forward for Estonia, with its unique approach to citizen medical records that are digitalized using blockchain and opens an entire market for innovation in preventive medicine and cryptocurrency trading.
Forms Of Companies In Estonia
- OÜ “osaühing”—private limited liability company
- AS “aktsiaselts”—public limited company
- Branch “esindaja”—large company branch
- Representative Office “filiaal”—office of representation in Estonia
- Free Zone LLC “vabatsooni firma” —Free Zone limited liability company
What is the difference between OÜ and AS companies in Estonia?
In Estonia, the two most common types of companies are private and public limited companies. The main differences between the two are explained below.
An Estonian private limited company itself, and not the shareholder, is liable for the fulfilment of the company’s obligations with the entirety of its assets. The share value must be at least 2,500 EUR. Unlike the AS company, where both types of boards must be established, the OÜ should have a management board and may have a supervisory board. It must have at lest one Board member and one shareholder. In case there is no Estonian Board member, the contact person must be appointed. Also, registered office address in Estonia is mandatory.
The public limited company must also have share capital of at least 2,500 EUR like their private limited company counterparts. This amount needs to be deposited in your company’s registered business bank account supervised by the Estonia Register for Securities in the process of company registration in Estonia. Every public limited company is obliged to have a management and supervisory board of at least one member. However, the members of the supervisory board can’t simultaneously be members of the management board.
Fundamentals Of Limited Liability Companies
Corporate Tax in Estonia | VAT in Estonia |
|---|---|
20% | 20% |
Fundamentals of limited liability companies in the Estonia
| Limited liability company | OÜ private limited company |
| Minimum Share capital | min 2500 EUR |
| Registered office required | Yes |
| Physical office required | No |
| Min. number of Shareholders | 1 |
| Min. number of Directors | 1 |
| Local Director required | No |
| Other requirements | if you are a non-Estonian, your company is required to appoint a local contact person |
| Bank signatory must travel | In most cases no |
| Timescale for company formation | 3 days |
| Timescale for bank account opening | 7 days |
| Timescale for obtaining VAT number | 7 days |
Statutory audit requirements for companies registration in Estonia | No |
| Shelf companies available | No |
How can I set up my company in Estonia?
Establishing a business in Estonia is straightforward, no matter where you are located. With CompyCo, you’ll receive expert guidance and coordination to set up your company remotely, ensuring a smooth process from start to finish.
Estonia’s e-residency program, introduced in 2014, allows non-Estonians to enter the market as electronic entities. This innovative system simplifies expansion for international entrepreneurs, making it possible to establish a business in just a few steps.
Steps for Company Registration in Estonia
Digital ID & Legal Address – Apply for your e-residency digital ID and acquire a legal address in Estonia. If all board members are non-residents, CompyCo will coordinate with our local Estonian contact person to ensure compliance.
State Fee & Company Registration – Pay the state fee of EUR 190 and register your legal e-company through the Estonian Business Register.
Bank Account Setup – Open a business account, which does not necessarily need to be in Estonia. We can coordinate with local or EU/UK online banks to find the best fit for your business.
Beyond the practical benefits, e-residency also provides access to Estonia’s networking opportunities and business support, helping you launch and grow your company efficiently. With CompyCo coordinating each step, you can focus on your business while our network of local experts handles the logistics.
More about Company registration in Estonia
Estonia’s e-residency option allows you access their vast digital infrastructure and helps you gain the same business rights as the country’s citizens.
To obtain your e-residency card, you will need to submit electronically:
- a copy of your passport
- updated CV
- a photo document that must be done online.
Once thats done, you can apply online for your e-residency card. You will have to choose a pick up location, where you must come in person to take a fingerprint.
You will be notified by emial when your Estonian e-residency has been done (3 weeks to 2 months – depended on pick-up location you choose and then you can plan your visit there.
Company registration in Estonia will be much quicker and cheaper if you obtain the e-residency.
CompyCo can coordinate the process for establishing your Estonian e-residency and setting up your company in Estonia within days, enabling you to commence location-independent business operations. Estonia’s ease of doing business, low administrative costs, and simple taxation make it a highly attractive business environment.
The cost of company registration in Estonia varies depending on the type of company and the specific requirements of your business.
Through our strong network of local banking, administration, and HR professionals, CompyCo coordinates the necessary steps for licensing, employment, and documentation. This ensures your company is established efficiently and in full compliance with local regulations, allowing you to focus on growing your business.
Bank Account Opening
For a country that prides itself on an advanced digital society, Estonia’s banking services are efficient and exceptional. With a range of international and local banks, we can connect you with a financial institution that’ll cater to your business’s needs and activities.
Registering your business as a foreign investor in the country requires the opening of a bank account, whether you opt for an online alternative or an otherwise. To gain approval for your bank account, some of the required documents for company registration in Estonia are:
- Proof of office address
- Proof of your ties to the country. This could include your e-residency ID or an article of incorporation.
- Proof of identity. You may provide a copy of your passport, driver’s license, or identity card.
For more information about opening a bank account, head over here.
Accounting & Taxation for Company Registration In Estonia
The accounting and taxation related requirements to bear in mind are:
- In Estonia, the rate for corporate income tax on reinvested and retained profits is 0%. What does this mean? It means that all companies established and registered in Estonia are subject to no corporate income tax.
- There is, however, an exception to the no-tax rule. Profits that are distributed by the company formation in Estonia are liable to a 20% income tax. In certain cases, this may be lowered to as little as 14%. Distributed profits are gifts and donations, expenses unrelated to business, or profits distributed during the tax period.
- Financial statements, including a profit and loss account, an annex, and a balance sheet must be submitted to the Estonian company register every year.
- The standard VAT (käibemaks) rate in Estonia is 20%, but it can be 15% or 0% based on the type of product or service the taxpayer offers. Estonian companies are issued VAT numbers with the format of the country code ES followed by a 9-digit number, which ends with a letter.
How can you employ staff in Estonia?
Affordable business infrastructure, competitive markets, and Estonia’s advanced digital ecosystem make it an attractive option for business expansion. This advantage extends not only to operations but also to the talent you hire.
CompyCo coordinates the onboarding and retention of top employees for your company registration in Estonia, giving you access to a highly educated and skilled workforce. We oversee the full employment process, ensuring worker eligibility, compliance with local labor laws, and the preparation of contracts and employee agreements.
If your foreign company only needs to employ a person remotely in Estonia, we can coordinate the setup of your non-resident company as an employer, avoiding local company registration. Our goal is to help you save costs while ensuring efficient, value-adding solutions.
Have questions? Explore our HR services page to learn more about how we coordinate international HR support.
Check out company registration process, requirements and fees in Sweden, Finalnd, Norway, The Netherlands and Poland.