Company Formation in Estonia

The process for starting a company in Estonia includes various actions such as the drafting of the articles of association, as well as the drafting of other documents that include specimen signatures, passport copies and special forms provided by the company registration office. Our team of local incorporation experts can assist you through all these steps so that you can start your business in this country as fast as possible.

 

It is important to keep in mind that the process of company formation in Estonia requires that the procedures must be performed through a public notary. Setting up a company in Estonia requires also opening a bank account, hiring a local accountant and finding a registered office in Estonia.
 

 

CompanyIncorporationEstonia.com is partner of BridgeWest and a proud member of several well-known web portals, such as the web portal Lowtax.net.

 

 

Osaühing (OÜ - private limited company). At least one member is necessary in order to start the Private Limited Company in Estonia and a minimum share capital of 40.000 EEK divided into shares (with a minimum value of 155 EUR per share). The shares of this type of business established in Estonia cannot be freely traded to the public unlike the shares of the public limited liability companies. The contribution of each shareholder is deciding the liability of each member.

 

A Public limited liability company in Estonia (Aktsiaselts-AS) is the most popular form for medium and large sized companies who can provide a minimum share capital of at least 40.000 EEK. The shares of such a company can be freely traded to the public by registering it at the Stock Market. 

 

At least two individuals or corporate bodies can be united under the same economic purposes after they sign an agreement. This form of Estonian business is called General Partnership. For this business, no minimum capital is necessary and all the partners have full liability and can equally take all the management decisions. The profits are shared between the partners.
 

In an Estonian Limited Liability Partnership, the liability can be limited (in case of a silent partner) or can be unlimited (in case of a general partner). Just like in the case of the general partnership, there is no requirement for a minimum capital. Only the general partner can be a manager of this type of entity.

In Estonia is also possible to open a business where the owner doesn’t need to deliver a minimum share capital and whose liability is unlimited on the company’s debts and profits. This is the Sole Proprietorship. Our incorporation agents can help you open a company in Estonia, no matter if you choose to register an LLC or a sole trader.

 

The Private Limited Liability Company is the most chosen form of a company by which investors prefer to operate in Estonia and the incorporation procedure for this type of company is not difficult, due to an online platform established by the Estonian state.

 

An investor may also choose to buy a Shelf Company in Estonia, as the business is already registered and, by a power of attorney, the new owner can immediately begin operation.

If you intend to open a company in Estonia or you have already opened one, you might find useful our tax calculator, a tool which shows you the amounts you have to pay as corporate tax, dividend tax and VAT in Estonia. 

Also, if you are interested in setting up a company in another European country, for example in Ireland, our partner law firm can provide you with assistance. 

Company formation requirements in Estonia

• -          choose an appropriate business name, which must be unique, and reserve it with the Trade Register;
• -          provide the passport and other personal information to the Companies Registrar;
• -          have the company’s Articles of Association drafted and notarized before filing them for registration;
• -          obtain a legal address for the company (virtual office services can be offered on request);
• -          open the company bank account for the share capital to be deposited.

 

Steps for company registration in Estonia

1. choose a business form which suits with the needs of the investor (most of the times, the limited liability company is selected);
2. the company's statutory documents must be drafted and notarized by a public notary, if any documents need to be translated, these should also be notarized;
3. the documents are then filed with the Companies Register in Estonia electronically, in person or by proxy, in accordance with the client's request;
4. registering with the Estonian tax authorities, which will issue the tax identification number, the VAT number and will approve the registration for social security purposes;
5. applying for the licenses, permits or approvals, as required by the authorities in the field the company will operate in.

 

If you are interested in starting a business in Estonia, our specialists can help you.

 

Once the type of structure has been selected, the first procedure to complete is to reserve a business name. The selected name must comply with the provisions of the Company Law and must be unique. In order to ensure a successful trading name reservation, the future business owner is advised to submit at least 3 names for approvals, among which there should also be the desired one.

 

The trading name reservation procedure is the simplest and takes no more than a few hours to be completed and the trading name reservation certificate to be released. The business owner is also required to provide an e-mail address upon the reservation of a trading name in Estonia.
 

One of the main requirements for setting up a business in Estonia is to have a legal address here. This will determine the residency of the business in terms of operations, but also taxation. Th legal address can consist in a rental contract for a traditional office space or a virtual office that can be used in order to complete the incorporation procedure faster.

 

Our company registration specialists in Estonia can provide virtual office services at very advantageous conditions in large cities in the country.
 

Based on the type of company to register, there are various documents that must be submitted for approval and verification with the Estonian Trade Register. Among these, the shareholders must provide their personal information if they are natural persons. In the case of foreign companies setting up branches or subsidiaries in Estonia, these are required to file extracts from the registrars in their home country alongside other information. Considering most structures are required to have a management board made of directors, their personal information must also be provided.

 

The information mentioned above must be provided no matter the business form selected. Then, in the case of setting up a sole trader or partnership, a simple registration form must be completed and filed with the Companies Registrar in the case of the sole proprietorship, while in the case of a partnership the legal agreement which provides for its creation must also be submitted.

 

In the case of complex structures such as limited liability companies, the Articles of Association must be drafted and notarized by a public notary in Estonia. These must contain specific information about the shareholders, the directors, the capital of the company and the distribution of shares among the stockholders.

 

Our local advisors can help with the preparation and filing of the necessary documents for starting a company in Estonia.

It is a mandatory requirement for a resident company to have a bank account with an Estonian bank. The account will first be used to deposit the share capital and after the company is incorporated it will be used for completing the financial operations of the business.

 

If you want to create a company in Estonia, for example if you plan on establishing an e-commerce company in this country, we can assist with the opening of corporate and merchant bank accounts. 
 

One of the main steps of starting a business in Estonia is tax registration. This process is usually completed right after the company is registered with the Trade Register. It must also register for social contributions as an employer.

 

Then, the company can register for VAT voluntarily. It is important to note that when the goods and services supplied exceed 16,000 euros, VAT registration becomes mandatory in Estonia. This applies to both natural persons and companies making supplies of VAT-taxable goods and services.

The last step before commencing the activities under a business incorporated in Estonia is to apply for the licenses required to completing one or more undertakings. Estonian companies must apply for such permits with the governmental agencies, ministries or other authorities in charge with regulating the industries these companies will operate in.

 

In the case of trading companies, both VAT and EORI numbers are required in order to complete import-export activities in the European Union.

 

If you intend to create a company in Estonia and you need information or have any questions about the business permits and licenses required to start a company in Estonia, our representatives can offer the necessary information.

 

Investors who intend to launch businesses in Estonia in the cryptocurrency industry should be aware that they will be subject to the rules that the National Bank impose. You can enquire about the rules enforced when establishing a crypto business from our company formation consultants. It's important to note that certain companies must now register and obtain a crypto license in Estonia from the National Bank.

The first actions an entrepreneur must take when starting a business in Estonia is checking the uniqueness of the proposed company name(done online) and deposit the initial capital in a bank account. Due to these actions, the applicant will receive a certificate of name reservation and one certificate of deposit.

 

After that, the applicant must submit online the registration application to the Estonian Commercial Register. In order to do that, the representatives must deliver an application no later than one year from drafting the Memorandum of Association. If the answer is positive, the registrar will issue a certificate of registration necessary in order to register at the National Tax Board for VAT application.

 

The last step is registering an Estonian company with the Central Sick Fund of Estonia for health insurance. All the new employees must be registered within one week of their employment.
 

How long does it take to register a company in Estonia?

• -          the name reservation takes less than one day and can be completed online;
• -          filing the company’s incorporation documents will take one day, but can also be completed online;
• -          tax and VAT registration is completed online and can take about 3 days;
• -          registering as an employer with the Employer Registry takes a few hours.

 

Costs for registering a business in Estonia

1. the business registration fee imposed by the Trade Register's offices in Estonia is set at around 145 EUR for the regular registration and 190 EUR for a quick registration;
2. the virtual office cost is established at approximately 99 EUR per month - the virtual office represents a great advantage for those seeking to register companies remotely;
3. the minimum share capital which needs to be considered for registering a limited liability company in Estonia is 2,500 EUR;
4. our company formation fee for a new company is of around 850 EUR, and our local agents can explain what this cost is comprised of;
5. the accounting costs start at approximately 100 EUR per month as a basic fee, and we invite you to contact us if you need additional services.

Foreign investors find Estonia quite attractive as far as company formation in Estonia is concerned. Moreover, the Estonian government encourages foreign investors to come and open a company in Estonia through incentives and a friendly business environment. In addition to that, it offers a liberal trade, a balanced budget and favorable legislation for starting a company in Estonia.
 

The Estonian economy brought Estonia on the 25th place as far as the ease of starting a business by The World Bank Group is regarded. Foreign investors play an important role in the economy of Estonia, especially through investments in fields like telecommunications and banking. Also, due to its location, Estonia developed important relationships with countries like Finland and Russia in terms of international trading.
 

Each entrepreneur developing a business in Estonia must conduct a proper company management, which is an important practice for ensuring that the company complies with all existing laws, regulations and business practices.

 

FAQ on opening a company in Estonia

Estonia as a business destination

What to consider when starting a business in Estonia
 

• - researching the market and the industry, or sector the business will operate in Estonia;
• - choosing the appropriate business form the investor will use to offer his/her services;
• - deciding on whether the company will be managed from or outside Estonia (e-residency is available here);
• - researching the licensing requirements in accordance with the Estonian industry to operate in;
• - considering the minimum amount of money to start the operations, as well as the legal requirements in this sense;
• - registering the company with the Estonian Trade Register and tax authorities in the country.

 

Starting an Estonian business through e-residency

Steps for registering a company in Estonia
 

• - choose and reserve a company name;
• - choose the business activity of the company from the Estonian Classification of Economic Activities;
• - obtain a legal address for the company (virtual office services are available);
• - file the incorporation documents with the Trade Register;
• - register with the tax authorities.
   

Why start a business in Estonia?
 

• - 98% of the companies registered here have been incorporated online;
• - 99% of the banking transactions completed here are online;
• - 95% of the annual tax documents are filed online;
• - you can register a company online in 3 hours;
• - in 2018, Estonia occupied the 1st position in the EU Digital Economy and Society Index;
• - in 2018, Estonia had the largest number of startups in the European Union.
   

 

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