Tallinn is the capital city of Estonia and also the country’s largest city. As the most important financial and business centre in Estonia, Tallinn has a foreign friendly economy and certain business sectors, like information technology, tourism and logistics are highly developed.
Foreign investors that want to open a company in Estonia have another reason to choose Tallinn: its geographical position. Tallinn is close to two important cities in the Scandinavian Peninsula: Helsinki and Stockholm and is also close to Saint Petersburg.
Foreign entrepreneurs may decide to open new companies in Estonia or establish a branch.
When choosing between the available types of companies in Estonia, investors should consider aspects such as the minimum initial capital, and different provisions regarding the shares of the company.
Private limited liability companies cannot sell their shares to the public and can be set up with a minimum amount of 2,500 EUR. Public limited liability companies are the most popular types of business structures in Estonia and are usually the choice for entrepreneurs that want to open small or medium sized businesses.
In Estonia, the standard VAT rate is 20%. However, certain exceptions apply to books, newspapers, medicine and accommodation: they have a 9% rate. There is no dividend tax in Estonia and there are no taxes levied on undistributed corporate profits. However, investors are subject to other taxes in Estonia, like real estate and land taxes or local taxes. Even if there are no special tax benefits for foreign investors in Estonia, the tax system is attractive for any kinds of investments.
A very important step when opening an Estonian company is company management: making sure that the new business complies with all the applicable laws and regulations. Regardless of its size, any company must have an executive board and the board members must act in the best interest of the company, at the same time ensuring that the company observes the current legislation.
Our company formation consultants in Estonia can provide assistance for specific accounting or management activities, and they will work closely with you to make sure that your company benefits from the best possible business advice and guidance.
Contact us for more personalised information and advice regarding company formation in Estonia.