Open a company in Estonia

It is beneficial for a foreigner to open a company in Estonia for several reasons:

• No obligation to distribute profits. Undistributed company profit is not taxed.
• No requirement to contribute share capital when registering a private limited company (OÜ).
• The company owner can be a non-resident of Estonia — either an individual or a legal entity.
• The owner and the director of the company can be the same person.
• No mandatory salary payments or hiring of employees is required.
• Low maintenance costs for the company.
• Simple reporting process and easy document submission.
• The company is allowed to purchase real estate and vehicles.
• Additional advantages include fast acquisition of a VAT, EORI number, and EU tax residency status.
• Opportunity to obtain “e-residency” for using an electronic signature and remotely accessing all digital services available to e-residents online.
• Possibility for citizens of Russia, Ukraine, and other countries to open business bank accounts in reliable European banks.
• User-friendly online banking systems of Estonian banks.
• Well-functioning government services in Tallinn allow comfortable communication with officials in English, Russian, or Estonian.
• Opportunity to apply for a long-term “D” work visa or obtain a residence permit in Estonia.
• Estonia observes double taxation avoidance treaties with most countries worldwide.
• It is faster and more affordable for a Russian citizen to register intellectual property — patents and trademarks — in the EU under an Estonian company.
• Convenient geographic location of Estonia, close to Russia, Finland, Sweden, and Latvia.
• An Estonian company can receive unlimited loans from its shareholder, allowing it to generate profit through annual interest payments. Taxes on such income are not paid in Estonia; the tax obligation arises in the shareholder’s country of residence.
• There is no legal requirement to appoint a local resident to the management board, unlike in Finland, Lithuania, and many other European countries. Company founders and board members in Estonia can be non-residents.

Yes, it is required.

There is no fixed amount of authorised capital now.

There are no special requirements. A sound difference of 2-3 letters is sufficient.

In order to quickly check the name and start working, we recommend you to specify the intended name of your future company in your first contact with us.

We will check your name absolutely free of charge.

We advise you to think up and send us 2-3 variants in advance, as simple names are often busy.

We sell ready-made companies “with age”, registered in the commercial register of companies (limited liability partnerships – OÜ) without forming a share capital or with pre-paid share capital.

All offered companies are new and have never started any business activity. On the day of purchase we give you the whole list of documents and in a few days you will be able to start doing business. You can find more details here.

Yes, a citizen of any country in the world can be a founder or manage a company.

Customers of the service are usually citizens of the CIS and Europe.

Yes, only one person is sufficient to establish an Estonian company, who can be registered as a founder and a director of the organisation at the same time.

Income tax exists, but the profit received and retained earnings are not subject to taxation. Therefore, it can be considered that in this situation the profit tax is 0%. Earnings can be used for reinvestment or simply left on the company’s balance sheet. However, it is important to realise that this does not apply to wages and salaries and dividends, they will be taxed.

No, companies in Estonia do not have to distribute profits. For reinvestment purposes, income is allowed to be accumulated in cash or in a bank account.

No, an Estonian company is not obliged to employ Estonian citizens and has the right to employ foreigners. The wages of foreign nationals for work performed outside Estonia are not taxed. Such nuances are actively used by IT companies co-operating with programmers from different countries of the world.

The constituent documents specify only one type of activity – the core activity. In practice, however, an organisation can carry out absolutely any type of activity without the need to make changes or additions to the founding documents. The type of activity is not specified in the Articles of Association of an Estonian company, and the concept itself is rather statistical in nature.

The main type of activity can be changed either at the time of filing the annual report – in accordance with the actual specialisation in the past reporting year – or by the company’s manager – independently on the official resource of the Estonian Commercial Register.

Holders of Estonian resident ID cards or e-residence cards can use the online system of the Estonian Commercial Register to register a company. Non-residents need to have a contact person in Estonia who has a licence and is willing to provide their legal address to access this option. More details can be found here.

Estonian law obliges any local firm whose founders are not residents of the country to have a contact person – natural or legal – who has the status of a resident of the state and holds a licence for this type of activity.

The main function of the contact person is to receive postal correspondence delivered in the name of the company and to liaise with government officials at various levels on your behalf (if necessary) if you cannot be contacted directly.

More details can be found here.

A registered office is included in the list of mandatory requirements for registering a company in Estonia and is provided in conjunction with the Contact Person service. The legal address does not have to be the same as your actual address.

By ordering a legal address service from Sowana, you will be able to forward all scanned correspondence to a pre-agreed e-mail address. The service of forwarding original postal items is negotiated and paid for separately according to the tariffs of postal services.

For more details please click here.

A memorandum of association stating:

• list of names and contact details of the owners;
• form of ownership;
• a list of the company’s assets;
• information on the scheme of distribution of shares between participants;
• the procedure for profit distribution;
• an algorithm for the implementation of management;
• list of rights, duties and areas of responsibility of each participant;
• the rules for carrying out the liquidation.

The articles of association of the company, appearing also in the notarial insertion and containing the basic provisions:

• the name that the firm received upon incorporation;
• the total amount of the authorised capital and the form of its contribution;
• the start and end dates of the financial year;
• location of the company.

Matters not listed in the documents are regulated by the Commercial Code of the Republic of Estonia.

Yes, you can. The main prerequisite for obtaining a VAT number is to exceed a turnover of 40 thousand Euros within Europe from the beginning of the calendar year. VAT number can also be applied for in advance if you plan such a turnover by submitting supporting documents (contracts).

You can find more details here.

The head of a company has the right to open corporate accounts for the company both in Estonian banks and in any other jurisdiction.

Unfortunately, the regulations of Estonian banks currently require mandatory – at least one, but usually two – personal visits to the financial organisation.

More details can be found here

There are no restrictions on opening accounts with banks/financial organisations in other countries for Estonian companies.

In Estonia there is no such concept as “nominee director or shareholder”. On this basis, we do not recommend or provide customers with the service of nominee director and/or shareholder.