Company formation in Estonia
Most relevant advantages leading entrepreneurs to more investment opportunities for the growth of their business.
0% Corporate Tax Rate on undistributed Profits –
Any funds invested in a firm in Estonia are tax-free.
Entrepreneurs do benefit from the taxation system in Estonia.
Economic overview
Estonia is an attractive destination for foreign investors, and the government actively encourages them to establish companies within its borders by offering incentives and fostering a business-friendly environment. The country boasts liberal trade policies, a balanced budget, and favorable legislation that make it appealing to international entrepreneurs.
According to the World Bank Group, Estonia ranks 25th in terms of the ease of starting a business. Foreign investors, especially those in fields like telecommunications and banking, play a pivotal role in Estonia’s economy. Notably, numerous globally renowned companies, including Skype, Bolt, TransferWise, and Playtech, have chosen Estonia as their base of operations.
Estonia’s business strategy revolves around a robust digital infrastructure and a belief that nearly all business activities can be efficiently conducted online, minimizing both costs and time expenditures. This forward-looking approach has paved the way for digital nomads, freelancers, and self-employed individuals to establish startups and thrive in Estonia. To cater to these global entrepreneurs, the e-Residency program was introduced, providing worldwide access to Estonia’s business environment and streamlining business processes.
Thanks to Estonia’s membership in the European Union, e-Residents can fully exploit e-services, manage their companies remotely, and leverage the benefits of the European Single Market. This location-independent lifestyle offers a slew of advantages, including cost-effective administration, streamlined business procedures, and favorable taxation. Company in Estonia OÜ stands ready to assist entrepreneurs in establishing startups in Estonia and managing their businesses from anywhere in the world.
Company Registration in Estonia:
Setting up a company in Estonia involves several key steps. Procedures are overseen by a local public notary, encompassing the opening of a bank account, the engagement of a local accountant, and the selection of a registered office address for the company.
Basic Information
Types of companies available: Limited Liability Company and Public Limited Company.
Minimum share capital: 1 EUR (paid-in requirement is also 1 EUR).
Minimum number of shareholders for a Limited Company: 1.
Time frame for incorporation: Typically takes 1 to 5 business days.
Corporate tax rate: 0% until profits are distributed.
Dividend tax rate: 20%.
VAT rate: 20%.
Availability of shelf companies: Yes.
Supply of registered address/virtual office: Yes.
Local Director required: No.
Use of electronic signature: Yes.
Accounting/annual return requirement: Yes.
Foreign ownership allowed: Yes.
Estonia Company Formation Requirements
Both resident and foreign entrepreneurs looking to establish a company in Estonia must adhere to the Company Law by fulfilling several requirements, including:
- Selecting a unique business name.
- Providing the Registrar with identification documents for members and directors.
- Preparing and notarizing the company’s Articles of Association.
- Obtaining a local legal address.
- Opening a company bank account.
- Registering with Estonian tax authorities to obtain tax identification numbers, VAT registration, and social security approval.
- Applying for any necessary licenses, permits, or approvals related to the planned business activities.
Opening a Company in Estonia
The process of registering a company in Estonia is relatively swift, and much of it can be done remotely. The steps include:
Name reservation (usually takes less than one day).
Filing corporate documents (one day).
Tax and VAT registration (about 3 days).
Registering with the Employer Registry (same day).
Furthermore, Estonia has introduced an “e-residency” program, allowing for the establishment of companies remotely. Company in Estonia OÜ can guide you through this process should you choose to explore this avenue.
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