Guide to Establishing a Company in Estonia

Estonia has positioned itself as one of the most attractive destinations for entrepreneurs and international businesses, thanks to its digitized and efficient system. From its innovative e-Residency program to its low corporate taxes, this Baltic country offers multiple advantages for those looking to establish a business.

In this comprehensive guide, we will explore the different options and paths available to establish a company in Estonia, from choosing the type of company to the necessary steps for formalization.

Before diving into the details of company formation, it is important to understand why Estonia has become an ideal destination for entrepreneurs:

• E-Residency Program: Allows non-Estonian citizens to access digital services and manage companies remotely.
• Attractive taxation: 0% corporate tax on undistributed profits.
• Full digitalization: Most procedures can be done online without physical presence.
• Access to the European market: Companies registered in Estonia can operate throughout the EU.

There are various business structures in Estonia, but the most common for entrepreneurs and international businesses are:

a) Osaühing (OÜ) – Private Limited Company

The most popular option for startups and entrepreneurs.

• Minimum capital: 2500 EUR (can be deferred).
• Limited liability: Shareholders are not personally liable.
• Ideal for: Freelancers, startups, and online businesses.

b) Aktsiaselts (AS) – Public Limited Company

Suitable for larger companies or those intending to be publicly traded.

• Minimum capital: 25,000 EUR.
• Board of directors required.
• Ideal for: Companies with multiple shareholders and investors.

c) Branch of a Foreign Company

If you already have a company in another country, you can open a branch in Estonia.

• No minimum capital required.
• The parent company is responsible for the branch.
• Ideal for: Businesses wanting to operate in Estonia without creating a separate entity.

Depending on your situation, there are different paths to register your company:

Option 1: Through E-Residency (Fully Remote)

1. Apply for e-Residency on the official website.
2. Collect the card at an embassy or consulate.
3. Register the company online via the Estonian Business Register.
4. Open a digital bank account or use fintech providers.
5. Manage the company with digital tools.

Option 2: In-Person in Estonia

1. Travel to Estonia and visit a notary to register the company.
2. Submit the required documents.
3. Open a local bank account.
4. Complete tax registration with the authorities.

Option 3: Through a Service Provider

If you prefer to avoid bureaucracy, you can hire a specialized company to handle all the procedures for you.

• Advantage: Saves time and reduces errors.
• Ideal for: People without experience in Estonia or those without time to manage the process.

To register a company in Estonia, you will need:

• Company name (unique and available in the register).
• Information about shareholders and directors.
• Legal address in Estonia (can be a virtual service).
• Initial capital (depending on company type).
• Company articles of association.
• Registration with the Estonian Tax and Customs Board.

• Corporate tax: 0% on undistributed profits; 20% on distributed dividends.
• VAT: If annual revenue exceeds 40,000 EUR, registration is mandatory.
• Accounting: Bookkeeping is required, and annual reports must be submitted.
• Payroll and Social Security: If you have employees, you must comply with labor and social security regulations.

To operate your company, you need a bank account. You have two options:

• Traditional bank in Estonia: May require an in-person visit.
• Neobanks and fintechs: Such as Wise, Paysera, or Revolut, which allow remote opening.

Once your company is established, it is important to comply with:

• Tax and accounting filings.
• Submission of annual reports.
• Renewal of e-Residency (if applicable).
• Payment of taxes on distributed dividends.

Establishing a company in Estonia is a fast and accessible process thanks to its digital approach. With options like e-Residency and attractive taxation, it has become a preferred destination for global entrepreneurs.

If you are interested in opening your company in Estonia and need assistance, our team of experts can guide you through every step of the process.