COMPANY IN ESTONIA

The Baltic region has long been integrated into the European Union, which guarantees all the benefits and advantages of the global community. Estonia is the EU member state – it has access to a broad market and no barriers to trade. That is why a business registered in Estonia enjoys a high level of security and a path to cooperation with European counterparties.

Important about starting a business in Estonia

Company registration in this country is simple and accessible to every non-resident. The business owner obtains a special business visa when opening the business. There are no offshore zones and specific taxation in Estonia, which has a positive effect on the reputation of local firms.

Strengths of the company registration in Estonia:

• 50+ agreements on avoidance of double taxation;
• fully digital infrastructure of interaction with the state;
• there are licenses for cryptocurrency business;
• no hidden conditions of taxation.

As such, Estonia can be a great place to set up a company. Cortax will help facilitate the procedure for every non-resident willing to gain access to the European market through the closest countries.

Forms of doing business in Estonia

Estonian legislation allows companies to register in various organizational and legal forms:

• limited liability partnership (analogue of LLC) – Oüs;
• joint stock companies – OÜ;
• partnerships;
• private entrepreneurs – FIE;
• branches.

A limited liability partnership is the most advantageous form for non-residents. A C-visa is required to register it, but the contribution of the authorized capital is not a prerequisite.

Registration documents

You will need the following set of documents to open a business in Estonia:

• application;
• memorandum of association (or decision on founding in case of a sole founder);
• charter;
• letter with a legal address.

There are two official languages in Estonia: Estonian and English. All documents must be translated and notarized accordingly. Cortax experts help translate and notarize all the necessary certificates.

Specifics of starting a business in Estonia

Everyone who wants to open a company in Estonia needs to be aware of the following nuances about the country legislation:

• there are no nominee owners. The privacy of the beneficiaries is not ensured, but a foreign person can become a director (if there is a resident representative);
• information about the founders is public;
• each partnership has a board with at least 1 member;
• information about the beneficiaries is stored in the State Register;
• company name must be in Estonian or Latin;
• legal address is required;
• if the founder is an individual, then the authorized capital can be deposited into a bank account within a decade. For founding organizations, there is a mandatory requirement to deposit a minimum share capital of 2,500 Euros.

The content of the charter deserves special attention. It is advisable to indicate in the constituent document that decisions are made in a legal form different from a notarial one – this will reduce the cost of notary services. The second nuance is to describe the types of activities in general, without specifying works or services. This will allow to add codes of economic activities in the future without the need to amend the charter.

Every company in Estonia must have a legal address and a unique name. Plagiarism is not allowed. Cortax's mission is to facilitate the registration in the country for foreign companies, and therefore we help choose a unique name that is different from the already registered brands.

Specifics of taxation in Estonia

Estonian law provides for the following taxes for enterprises:

• corporate tax according to the 20/80 scheme, if the profit is distributed. There is no dividend tax for non-residents;
• VAT. The base rate is 20%. Registration as a VAT payer is required if the company's annual turnover is over 40 thous. Euros. There are preferential rates for some types of goods;
• income tax. The base rate is 21%. No employees are required;
• contributions. Social tax on gross salaries of employees is 33%, and unemployment insurance is 1%.

It must be noted that Estonia has a minimum wage level, which is 584 euros per month in 2021.

Starting a business in Estonia is a great option for a business that wants to gain access to the European market. Cortax can greatly facilitate the process through quality translation of documentation and other intermediary services.