Company Act in Estonia is mainly regulated by the Commercial Code in Estonia that dates from 1995. The law expresses the basic principles of Estonian entrepreneurship according to the best European traditions and standards and outlines the role of the Commercial Register.
Recent modifications have been made in order to keep the legislation updated. In 2004 Estonia became a member state of the EU and therefore the Company Act in Estonia must also adapt to the European directives. Even before Estonia had an agreement in terms of company legislation with the European Union.
Company act in Estonia regulates any type of company formation in Estonia. The latest changes facilitated the incorporation procedures and brought an important modification. Company registration in Estonia can be now performed electronically and it only takes a couple of hours. The information that was previously requested at the Commercial Register office can be submitted via internet. Company act in Estonia stipulates this modification.
According to the Commercial Code there are five forms of business entities, which are created by entry into the Commercial Register:
From all the company types listed above, Limited liability companies are however the most common structures in Estonia.
When deciding to establish a company in Estonia, entrepreneurs must follow the rules stated in the Estonian Company Act. Foreign investors are required to have a resident permit or a work permit in order to set up an Estonian company. The laws also require that they have both an activity license the registration with the Estonian Tax and Customs Board.
In regards to the name of the legal entity, this must be unique and it must be registered with the Commercial Register. It must also contain the form of the, in full or abbreviation. The name can be either in Estonian or in English, while the documents required for company registration should be translated into Estonian.