Company registration in Estonia
The European market is very attractive for many businesses. To access local clients, it is convenient to have a legal entity with an EU registration. Therefore, many entrepreneurs consider Estonia a possible location for the signup of a firm. The state is well known for its ease of doing business, transparent legislation, favorable taxation regime, and loyalty toward foreign investors. Furthermore, belonging to the European Union guarantees a positive reputation for the corporation in the international arena and opens up access to many global markets.
There is straightforward reporting and a clear algorithm for providing documentation. Opening a firm in Estonia makes it possible for a non-resident to obtain the status of a European Union taxpayer and issue VAT and EORI numbers. Also, the country has an agreement on the avoidance of double taxation with almost all governments of the globe.
Moreover, Estonia offers opportunities for businesses in the cryptocurrency industry. With an Estonia crypto license, companies can engage in crypto-related activities, such as cryptocurrency exchange or wallet services, in compliance with the country’s regulations. This adds to the advantages of company formation in Estonia, providing entrepreneurs with a favorable environment to operate and expand their cryptocurrency businesses.
Start your business and open a company in Estonia
To start a legal business, you need to list a new company in the Estonian company register. This is the state registry of legal entities and private entrepreneurs, which contains all the information about the subjects of commercial activity.
The government went to meet new entrepreneurs and simplified procedures and requirements as much as possible. All papers might be scanned and submitted online. The process itself takes a couple of hours. For those who are fluent in Estonian, English, or Russian, it will not be problematic to understand the website of the state registrar and fill out the application forms. A new legal entity can be established either by a citizen of the country or by any person residing in any place in the world. But this will require an electronic resident card.
Benefits of company formation in Estonia
This European country is notable for its ease of business, a wide range of jurisdictions, and relatively inexpensive company formation procedure for foreign residents. Estonian company formation also has the following advantages:
- Convenient tax system. Founders do not have to pay corporate income tax when it is not distributed among shareholders.
- The possibility of remote registration. By obtaining an E-residency card, it is possible to register a company without visiting the country.
- There is no need to officially appoint a director and pay them a salary. This requirement is not specified in the legislation of the republic.
- Availability of double taxation treaty. Estonia has a signed agreement with many EU and other countries around the world.
- Prestige. The Republic is not positioned as an “offshore zone,” so more companies registered here are perceived more positively among major investors.
- Wide opportunities for opening an account. Company registration in Estonia provides obtaining a corporate account both in traditional reliable European banks and in electronic payment systems.
In addition, the founder of an enterprise in the territory of the republic can easily obtain a VAT number. They also do not have to pay the share capital immediately, which facilitates the start-up of the newly established company.
Why register a company in Estonia?
Having a company abroad is an opportunity to cover new markets, start cooperation with foreign partners and increase the attractiveness of one’s own business to investors. Company formation in Estonia also has additional advantages:
- The democratic government ensures conducting business in the legal space of the European Union.
- Estonian companies can open Stripe, Paysera, and Decta payment accounts.
- Availability of online banking and IBAN bank accounts, e.g., Wise and Payoneer.
- Ability to do business in the EU and cooperate with European companies.
- Accession to the Single European Payment Area and use of Euros in the country.
- Availability of digital signatures, which means the possibility for company directors to sign contracts remotely.
Thus, starting a business in Estonia is a promising solution that provides a stable company operation and many opportunities for capital management, development, and finding profitable deals.
Options for registering a company in Estonia
There are three ways to register your own company in the republic:
- Via the Internet. Register a company in Estonia online is the most common way for E-residency card holders. It may take about a month for a business owner to obtain it. In this case, the beneficiary’s declaration is done completely remotely.
- With personal presence. This option is the fastest regarding the procedure itself, but the need to set aside time to visit the country in person can slightly delay registration.
- Through Power of Attorney. This method does not require the business owner to be present in person, as the starting a company in Estonia takes place through a notarized power of attorney.
Fintech Harbour lawyers can help you to understand all the details, advantages, and disadvantages of each of the above-mentioned ways.
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Company registration in Estonia with e-Resident card
Estonia was one of the first countries in the world to introduce the issuance of state digital identification cards and e-resident status. This gives entrepreneurs and business people access to a virtual business environment and electronic government services. The e-ID card is issued to non-residents of the republic.
With an e-resident card, you can register a company in Estonia without visiting the country. All documents are digitally signed and sent by e-mail. This method provides:
- starting and running a business from anywhere in the world;
- fully remote management of the company;
- signing and verification of annual reports and other documentation;
- online banking through the Estonian bank.
Note that the holder of the e-resident card is not eligible for Estonian citizenship. It also does not give the right to enter other European countries, as it is not a physical identity document.
Company formation in Estonia by visit
Before choosing a date to visit the republic, it is necessary to carry out preparatory work, namely to collect information about the future company:
- company name;
- type of activity;
- details of the owner(s) and director(s):
- copy of passport
- telephone number;
- e-mail address;
- residence address.
Then it is necessary to find a local notary and collect the package of documents. To facilitate the procedure of company formation in Estonia, you can turn to a specialized team of lawyers. In this way, you can complete the registration in the shortest possible time and save the costs for living abroad.
Opening a company in Estonia by a power of attorney
This method is the fastest and does not require the personal presence of the founder. A power of attorney is drawn up between the law firm and the business owner and certified by a notary. Hired lawyers take care of all the registration, i.e., they provide:
- collection of a full package of documents;
- registration of the company according to the legislation of the republic;
- transfer of all documents on the ownership of the company to the founder.
The only disadvantage of this option is the cost of drawing up a power of attorney and the need to have it apostilled if no mutual legal assistance agreement is signed between Estonia and the founder’s country. Nevertheless, professional lawyers can offer favorable conditions for setting up a company in Estonia by power of attorney in a short time. Therefore, the newly established institution will be ready to work immediately, which will accelerate the increase in the profitability of the business.
What is the minimum share capital of an Estonian company?
Estonian corporations have a minimum authorized capital of 1,900 euros. Individuals who establish a new business do not need to pay the whole amount at the time of registration – it is enough to declare the funds. Legal entities are required to deposit the specified amount to the corporate account. After that, the capital can be used for the needs of the firm.
Ready-made/shelf companies in Estonia
Ready-made companies are already registered enterprises with all the necessary licenses and have not conducted economic activities and therefore have no obligations to third parties. To purchase such an organization, you need to determine the desired jurisdiction and choose the most appropriate option.
Buying a ready-made company is the fastest way to start your business abroad. In Estonia, it is possible to get a registered corporate organization and open a bank account in just one or two days. There is no need to visit the country or draw up the documents yourself.
Fintech Harbour’s qualified lawyers assist in choosing the right company, as well as provide advice and legal support for the sale and purchase transaction.
Forms of business in Estonia
According to Estonian law, business entities here are divided into five types:
- A private company with limited liability (osaühing or OÜ).
- A joint stock company with limited liability (AS).
- General partnership (TÜ).
- Limited liability partnership (UÜ).
- Trade association (ühistu).
In addition, the following people can create a company in Estonia:
- an individual entrepreneur;
- non-profit organization;
- a foreign company (opening a branch).
An individual entrepreneur and a company opening a branch must submit the necessary documents to the Estonian Commercial Register before starting their activities. The Non-Profit Associations Act governs the establishment and activities of non-profit organizations.
In the Republic, among the most popular types of business entities are private limited liability companies (OÜ) and joint-stock companies with limited liability (AS).
Our advantages in company incorporation
Although enlisting with the Estonian company register is not difficult, it is still better to approach an adviser if you have not accomplished it yourself before. Fintech Harbor corporate team has been involved in the signup of resident and non-resident legal entities in the EU member countries for many years.
Working with us, you get a number of benefits:
- compliance with all requirements of global and European legislation;
- high-quality service for an adequate price;
- transparency in every step and no hidden fees;
- information support at all stages;
- assistance in selecting the optimal tax regime;
- saving your time.
We provide comprehensive packages for business registration abroad and are always ready to answer all your questions.
Steps to set up your enterprise in Estonia
To create an Estonian firm (OÜ, AS, or another type), you first need to choose a title, make sure it’s available, and then register an office in this country. E-resident card owners can set up the firm virtually without a visit through the site of the Estonian business register. Simultaneously, you should settle the state-fixed charge and the authorized capital when submitting an application.
The second step is opening a corporate account with a local or international bank. If special requirements apply to the activity, you need to obtain a business license. If necessary, the company must be registered as a VAT payer.
Reviews
Thanks to the help of Fintech Harbor lawyers, we have successfully registered a new company in Estonia in just 2 days! We didn’t even think that this was possible. Very efficient, bravo!
I really enjoyed working with the solicitors of this firm. They were very attentive to detail, which is what is required of skilled counselors.
FAQ
Should I pay any fee to set up an enterprise in Estonia?
No, taxes are not paid during company registration in Estonia. You ought to settle the governmental fee for considering the application. This amount is designated; it is paid one-time and is non-refundable. A firm can become a taxpayer only after completing the registration process and being enlisted with the tax authorities.
How much does firm incorporation in Estonia cost?
The price depends on the chosen registration method. This method is suitable only for those who have an e-resident card.
Foreign citizens will have to use the help of lawyers and notaries. When registering by power of attorney, an additional fee is charged for the preparation and courier delivery of documents. To find out the cost of registering a company in Estonia, leave a request on the website or call us.
When can I start trading with my new company?
Before you start to fully use your new firm, conclude contracts, provide services and receive payments from customers, you need to make sure that your establishment:
- is enlisted into the Estonian company register;
- received the taxpayer certificate and VAT number (if applicable);
- has a corporate bank account;
- acquired necessary licenses to carry out specific types of activities.
If all these conditions are met, you can start working as an entrepreneur legally.
What documents should I need for company registration in Estonia?
Estonian authorities request a standard set of information from applicants, including the agreement of incorporation, articles of association, application, and contact details. You must also provide receipts from the bank on the contribution of the authorized capital and state fees.
If the founder is a legal entity, you must additionally provide data on the company’s activities, the founder’s identity, and papers confirming the reliability and source of income. If all records are in order, the new legal entity will be entered into the Estonia company register the very next business day.
Can a foreigner open a company in Estonia?
Yes. Opening a company in Estonia is available for residents of other countries. The procedure can occur remotely through authorized intermediaries (lawyers, notaries) or online with an e-resident card.
How long does it take to register a company?
The duration of registration depends on the chosen method. To register a company in Estonia remotely, it can take up to three working days. Applying for a company by proxy takes up to 5 working days.
Which bank account can I open for my business?
You can open an account both in a physical bank and in a virtual payment system. Among traditional Estonian banks, the most popular are LHV, Luminor, Swedbank, SEB, and COOP.
Are there any restrictions on the company's activities?
Suppose a resident company is established in accordance with all the requirements and fully complies with the laws of Estonia. In that case, there are no restrictions in terms of conducting business activities. It is also worth noting that some jurisdictions are more strictly regulated than others. For example, companies engaged in education, financial activities, and construction must obtain the appropriate licenses before operating in the country.
What is e-residency?
This is a government program in Estonia that involves issuing an electronic document to identify your identity. It gives aliens access to public services (company registration, bank account opening, payment processing, etc.). At the same time, the e-resident card does not give the right to reside in Estonia or obtain citizenship, as it has no physical counterpart.
Do I need to pay VAT and get a VAT number?
If you want to start a company in Estonia, you do not have to register as a VAT payer. However, if the annual turnover of your organization exceeds 40,000 euros, you will need to obtain a VAT number within two working days. For companies registered in the territory of the Republic but selling products/services to EU countries, you have to obtain a VAT number before starting a business.
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