A liaison office in Estonia is a legal and economic entity performing intermediary functions between the main company and its external partners.
As in other European countries, a liaison office is not a distinct legal entity, does not have legal personality and it is economic dependent on the company from which it has been set up.
In this sense, a liaison office in Estonia is a type of structure which is not independent from the parent-company and its status provides several limitations which can be seen in the fact that it cannot produce goods or provide services. In most cases, an investor chooses to set up a liaison office in Estonia for the purpose of to create a business connection (intermediate) between the parent-company and its Estonian clients. As a liaison office have few economic features, this type of structure is mainly used for marketing services.
A liaison office in Estonia must not be understood as a subsidiary or branch, as these structures have separate features and economic status. For example, a subsidiary in Estonia has its own legal personality, is created under the status of a limited liability company and it is also a company in which another company (parent company) has a partner or shareholder agreement, with or without a dominant influence. A subsidiary is common used type of structure in Estonia as it is easier to conduct businesses through this legal entity.
An Estonian branch is also a type of structure independent from the liaison office. A branch is not a legal entity. The parent-company is responsible for the obligations arising from the activities of the branch and the procedure of registering a branch is more complex, requires more time and it can be considered expensive.
In order to set up a liaison office in Estonia, there are several documents required by the state authorities, but the procedure is not complicated. To open the liaison office there must be obtained a license and the structure must be registered as a tax payer. In this sense, the following documents are needed: the standard application available at the registration office or online, legalized copies of the articles of incorporation, a legalized copy of the incorporation certificate, the chief of the liaison office must provide a legalized letter, the memorandum of association in which are included the reasons for opening a representative office must also be attached to the registration file. The procedure also provides that the applicant must specify the office's structure and the means by which it can be dissolved. Moreover, the proof that the registration fee was paid is also necessary.
In order to set up a liaison office in Estonia, no minimum share capital is required, but the registration fees must be paid and these costs are similar to the expenses involved in any company formation in Estonia.