Estonia Company Registration

Estonia Company Registration will enable you to enter the European Union market with a highly reputable jurisdiction.

Estonia has a very unique corporate tax system. Your profits will not be taxed unless they are withdrawn as dividends or as similar payments to dividends. Namely, if you reinvest all your profits Estonia will not tax your reinvested profits.

Therefore, Estonian companies are great as asset holding companies, which can inject further capital in their own companies or subsidiaries.

Nevertheless, Estonia is a well known jurisdiction for their innovative digital systems – your company can be fully managed online. The process of company formation in Estonia may take around 1-5 days from the submission of all the necessary documents. Company in Estonia that is registered online with e-Residency can be ready in a couple of hours.

Below, EU LAW FIRM lawyers answer a set of general questions regarding the jurisdiction, company registration in Estonia and the requirements to start a business in Estonia. 

Estonia Background:

Republic of Estonia is a country located in the Baltic Region bordered by Latvia, Finland and Russia.

Estonia is famous for its’ innovative and technologically advanced developments, and it’s unique e-residence, which allows foreigners to become electronic residents of Republic of Estonia and manage their companies, businesses and all other matters electronically.

Company in Estonia is a perfect solution for foreign individuals and businesses seeking to do international business, with low tax rates and flexibility.

Estonia is also friendly towards blockchain and cryptocurrency businesses, issuing licences to various crypto businesses.

Capital city: Tallinn

Population: 1,329,460

Local currency: Euro (EUR)

Official language: Estonian

Business languages: English, Russian, Estonian

Description Of Company Registration in Estonia:

  • Minimum share capital from EUR 2500 (capital is only signed for if founders are individuals);
  • No turnover limitations;
  • No limitations on business activities;
  • Fast registration;
  • Board members must be the shareholders of the company;
  • Only private persons can be the shareholders;
  • No temporary bank account is needed (if founders are individuals);
  • 0 tax on reinvested profits;
  • Manage your business online;
  • Crypto friendly;
  • Enables possibilities for European Union residence permit.

Why start a business in Estonia?

Estonia is tone of the most attractive countries in EU to do business. Estonia is characterized by free trade and business environment in accordance with EU standards.

  • Tax rules

Tax rules of Estonia are relatively simple, being one of the main reasons why so many international companies currently are registered in Estonia. Estonia tax system is based on payment of corporate income tax upon withdrawal of dividends and making similar payments. If the profit stays within the company and is reinvested, there is no corporate tax. If you have a permanent establishment or get dividends through a subsidiary, you may be able to take out tax-free dividends under certain circumstances.

  • Economy and business

The government’s economic and budgetary policies are focused on attaining long-term economic growth. Estonia and businesses established there are export-oriented, creative, and assist regional development.

  • Technology and IT

Estonia is one of the global leaders in developing and implementing e-government and cyber security solutions. In general, all Baltic countries are a great place for establishment of IT companies. For example, Estonia is home to NATO’s cyber security centre as well as the European Union’s IT agency.

  • Reputability of jurisdiction

Compared to many other nations, the degree of bureaucracy is quite minimal and regulatory system is very transparent in Estonia. 

Tax system in Estonia

  1. Corporate income tax in Estonia: The standard corporate income tax rate on profit in Estonia is 20% of the gross amount. If you get dividends from subsidiaries or permanent establishments, they may be tax-free if the nations have signed a double treaty agreement. If the profit is reinvested – CIT rate is 0%. If regular dividends are paid out, a reduced rate of 14% may apply.
  2. Value added tax in Estonia: The standard VAT rate in Estonia is 20%, but there is also a reduced 9% VAT rate for certain fields of businesses.
  3. Withholding tax: On dividends, there is no WHT. However, 7% rate applies if the disbursement was subject to the reduced CIT rate at the paying entity.
    Interest payments to non-residents are exempt from WHT. A 20 percent WHT rate applies to interest payments made to residents.

For detailed guide on tax in Estonia we invite you to read our Ultimate Guide to Tax in Estonia. 

HOW THE ORDER SYSTEM WORKS?

1. Choose the most suitable company type and make online order

Choose the most suitable company formation package from STORE EU LAW FIRM, and place an online order with the available payment methods. After successful order you will receive an email confirmation with your order details.

2. Collection of documents and KYC verification

After successful order and receipt of payment, our customer support will get in touch with you to acquire the required documentation for company formation in Estonia.

3. Company formation in Estonia

 

The company formation in Estonia takes between 2-7 business days after all required documents have been received. After company has been incorporated, physical company formation documents with apostilles will be sent to your mailing address.

DOCUMENTS REQUIRED FOR COMPANY REGISTRATION IN ESTONIA:

For individuals:

  • Notarized and apostilled passport copy of all shareholders;
  • Notarized and apostilled passport copy of all directors;
  • Copy of a recent utility bill not older than three (3) months.

If shareholder is a legal person:

  • Notarized and apostilled Certificate of Incorporation or other similar document; evidencing the entity’s existence; 
  • Notarized and apostilled certificate of the Register of Directors;
  • Notarized and apostilled Register of Shareholders.

DOCUMENTS REQUIRED FOR COMPANY REGISTRATION IN ESTONIA:

  • Passport copy of all directors and shareholders.
  • Utility bill not older than 3 months.
  • CV of the company management.
  • Business plan.
  • Banks may request additional documentation from case to case.

Note: All documents in a foreign language must be translated into English and certified by a qualified translator.

Interested in starting business in Estonia? 

All questions regarding company registration in Estonia will be answered promptly by our lawyers. We usually answer in 2 hours.