A shelf company is a company established by a service provider with the purpose to resell it immediately after creation. For many investors buyig a shelf company in Estonia is a convenient choice, as the business is alreadyregistered and, by a power of attorney, the new owner can immediately begin operations.
Ready-made companies or shelf companies in Estonia are already recorded and are available for immediate purchase. This type of companies have not made any transactions, there are no contractual relations or obligations and maybe the most important aspect of a shelf company is that it has not appointed the directors or shareholders.
If you are interested in buying a ready-made company in Estonia, our consultants can help you throughout the entire procedure.
| Quick Facts | |
|---|---|
| Legal entities available for shelf company | The private and public limited liability companies can be used to acquire shelf companies in Estonia |
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Time required for purchasing the company |
The procedure can be completed in several days, depending on the availability of the desired structure
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Types of features it includes (corporate bank account, VAT number, etc) |
An Estonian trading company must have: – a trading name, – a bank account, statutory documents, – company director, – and a tax identification number |
| The advantages of a shelf company |
– Easy and quick purchase process, – bank account number, – possibility to be used for various activities |
| Appointing new directors (yes/no) |
YES, it is recommended for the company director to be replaced |
| Capital increase allowed (yes/no) |
YES, amendments are recommended to be made after buying a shelf company in Estonia
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| Certificate of no commercial activities (yes/no) |
NO, there is no need to obtain a certificate of no commercial activities |
| Modify the objects of activity (yes/no) |
Depending on the activity to complete, special licenses may be required |
| Participants in the purchase procedure |
The buyer or appointed representative through a power of attorney can represent the investor in the relation with the seller |
| The cost of buying a shelf company |
The cost depends on several factors: – the age of the company, – legal form, the share capital, – whether the company has a VAT number |
| Documents necessary for the purchase |
The sale-purchase agreement or share transfer deed is required to acquire a shelf company |
| Taxes applied to a shelf company |
Corporate tax of 20% which can be diminished to 14% if profits are distributed regularly and 0% if they are invested |
| Changing the registered address (yes/no) |
YES, the address of the company can be altered |
| Aged shelf company available (yes/no) |
YES, aged companies are available for sale in Estonia |
| The institution where corporate changes are registered | The Companies Register is the authority in charge with business amendments |
Characteristics of a shelf company in Estonia
Investors willing to open a shelf company in Estonia must know that this type of company does not have an opened bank account and a company seal /stamp, which proves that the company has not been used in the past and there are no activities in the past or debts. Our Estonian company formation representatives can provide more details on this matter.
For opening a shelf company in Estonia, the new owner only needs to provide an ID and can immediately begin to use the shelf company, without any worry about hidden risks. The Estonian shelf company can be opened and ready to function in just one day, as this type of company has a dormant state, waiting for new owners, who are always the first owners.
The new owner will need a power of attorney for the official representation before competent authorities, such as bank institutions, Tax and Customs Administration and in order to register for economic activities. The power of attorney is needed until the new board is recorded and the company is entered in the Commercial Register, procedure which usually takes up to five working days.
What to expect when acquiring a ready-made company in Estonia
The main advantage of choosing a shelf company over a new one is skipping the incorporation procedure. However, it is noticeable that in Estonia, the company formation procedure can be completed online within a few steps. Moreover, Estonia is the first country in the world to have an e-residency program that enables foreigners to open companies remotely.
By comparison, entrepreneurs looking to purchase an Estonian ready-made company must know that they will receive:
- – the Memorandum and Articles of Association;
- – the certificate of incorporation;
- – the tax registration number (in some cases, it can even have a VAT number).
Even with these administrative aspects taken care of, the buyer still needs to go through several procedures before being able to use the company.
If you are interested in buying such an entity, our Estonian company formation officers are at your service. We can also help you create a fintech company. Virtual currency service providers will be regarded as financial institutions in Estonia as of March 2020. In Estonia, cryptocurrency businesses must adhere to the same reporting guidelines as all other financial institutions. In Estonia, the exchange of one cryptocurrency for another is permitted thanks to a uniform license. The business may offer bitcoin and fiat exchange services alongside market giants thanks to its Estonian crypto license.
Making changes to an Estonian shelf company
The changes that need to be made to a ready-made company in Estonia depend on the type of entity purchased and its features.
There are several alterations that can be made to a turnkey company. If the entrepreneur prefers to buy an existing company rather than forming a new one, here are the main changes he/she must do:
- the shareholder’s name must be replaced when taking possession of the company;
- change the company’s trading name, which is quite simple to complete;
- replace the current director by appointing a new one;
- change the company’s legal address (the virtual office can be used for having a registered address as soon as possible);
- the constitutional documents of the ready-made company in Estonia must also be amended.
Furthermore, all changes must be reported to the Estonian Companies Register.
It is also common for the new owner to alter the share capital of the shelf company. This change is usually made to be able to complete specific activities. In this case, applying for special business licenses or permits may also be needed.
If you need advice on whether buying a shelf company or registering a new entity suits you best, our company registration consultants in Estonia can guide you.
How to choose a ready-made company for purchase
Compared to other countries, there are various service providers you can buy ready-made companies in Estonia. This is why, the choice can be more difficult. However, here are a few tips on what to look for before the acquisition:
- – the legal structure of the entity one is about to buy (the private limited liability company is usually preferred and easiest to find);
- – the share capital of the entity (companies with higher share capital are usually more expensive);
- – the age of the company is one of the most important aspects to consider;
- – the use of the entity also matters when buying a ready-made company in Estonia.
One of the main advantages of acquiring a shelf company is that its price can start from less than 1,000 euros. However, the cost can also exceed 4,000 euros in some cases. Still, compared to incorporating a new structure, the price remains rather high.
Advantages of opening a shelf company in Estonia
Most investors usually ask whether opening a shelf company in Estonia is a risky option. Well, when it can be proven that the company hasn’t undertaken any activity in the past and you are the first owner, you don’t need to worry about. As a matter of fact, opening a shelf company is a common action in most countries. But it is very important to check, before opening a shelf company in Estonia, that the company doesn’t have nominated directors and shareholders.
In this case, there is no possibility that the company has been involved in any activity, and therefore there is no potential risk. Also, the company can’t have hidden debts or commercial disputes as long as it has never appointed a director and a shareholder. Therefore, the company has never started its activity, there are no stamp and no bank accounts, there were no purchases of any active or passive, no debt and any contracts or unfulfilled promises.
It is strongly recommended to buy a shelf company from a reliable source and most companies that sell shelf companies in Estonia usually provide a wide range of extra services. For example, drawing up the foundation documents and articles of association, company registration, consultancy for opening a bank account, notary fees and stamp duties and others.
Start doing business in Estonia asap
A shelf company in Estonia enables foreign entrepreneurs to start doing business in this country asap. The legal entity of a ready-made company is the private limited company, which has previously been registered with the Commercial Register in Estonia. However, such a company has not registered any activities, therefore it has no liabilities to third parties.
The shelf company is usually registered as a private limited company in Estonia.
Information needed to open a shelf company in Estonia
The data we need in order to assist you to acquire a shelf company in Estonia are as follows:
- • Full name;
- • Place of residence;
- • Passport copy and personal code and/or the owner’s birth date;
- • Information regarding the board members;
- • If the board members are not EU citizens, a contact person who is an Estonian national needs to be appointed;
- • The company name;
- • The business address of the Estonian company;
- • Email of the company;
- • The company phone number;
- • If the owner is a legal entity, there are additional information we will need. Our Estonian company formation advisors can provide further details on what this information consist of.
It is also possible for you to acquire a shelf company in Estonia without physically being present in the country. If that is the case, our company formation professionals in Estonia will need to be authorized by you through a certified notary. We can provide you with a sample of the authorization letter, if you wish to do so.
Tax considerations for Estonian shelf companies
A ready-made company in Estonia will be taxed the same way as any other business. This means that after registration with the Estonian Tax Agency, it will:
- – be subject to the 20% corporate tax rate;
- – benefit from a 14% rate if profits are regularly distributed;
- – be subject to a 0% tax if it reinvests its profits;
- – pay the VAT at a standard rate of 20%, provided it makes taxable supply of goods and services.
Our company formation experts in Estonia can provide you customized information and guidance if you are interested in opening a shelf company in Estonia; please contact us.
If you are interested in buying a ready-made company in Estonia, our consultants can help you throughout the entire procedure.