Estonia flag

ESTONIA


Navigating the EU market: Estonia's door for foreign entrepreneurs If you are a foreigner who wants to start your own business in Estonia, you will find that the process is tailored and aimed at a global audience. Thanks to the advanced digital infrastructure, you have the unique opportunity to set up and manage your business remotely. This is a significant advantage for entrepreneurs who do not live in the European Union but want to gain access to the EU market.


Estonia eGovernment: revolutionizing start-ups One of the most innovative aspects of Estonia's business environment is its e-government program. This program is specially designed to help foreign entrepreneurs easily navigate the process of setting up and running a business in Estonia from anywhere in the world. As an e-resident, you will gain access to a number of digital services, facilitating tasks such as establishing a legal entity, banking and filing tax returns, which becomes more efficient and takes less time.


Center for Start-up Business Success and Business Expansion. Estonia's commitment to a transparent and efficient business environment extends beyond digital services. The country offers a supportive ecosystem for start-ups and established projects, characterized by a clear legal framework and a business-oriented tax system. This environment is conducive not only to business creation but also to sustainable growth and expansion. In short, this country provides a unique combination of digital innovation and business-friendly practices, making it an attractive destination for foreign entrepreneurs looking to establish a presence in the European market.


Registration of a company in Estonia


The possibility of establishing a company in Estonia should be evaluated together with the following advantages of this jurisdiction:

  • Strategic location;
  • Ease of registration, accounting and auditing for new legal entities (simple and clear rules without unnecessary bureaucracy);
  • Signed double taxation agreements with 60 countries;
  • Ability to register a company online;
  • Favourable conditions of taxation with regard to rates and tax exemptions;
  • Access to European markets and lack of currency controls;
  • Low level of corruption.


    • Doing business in certain industries promises additional benefits. The exact list depends on the specifics of your case.


    Forms for business and legal presence


    You can register a company in Estonia or otherwise declare your presence in the following forms:

  • Private limited liability company is the most popular option for doing business in Estonia due to easy registration and limited liability of participants (only up to the amount of their contributions). Even a person, including a foreign person, can create and be a member of this type of company. It can be an individual or a legal entity. The company must have one director, preferably a resident. The minimum share capital is 2500 Euro, but it does not need to be paid in cash upon registration. However, the share capital must be contributed before the profit is distributed. Simple accounting rules apply to the company. Meetings should be held annually. However, it is possible to do them remotely.
    • A
  • Stock company is designed to raise external capital by entering the stock market. This business can exist in two forms: (1) a private JSC, where the shares are distributed only among the participants, and (2) an open JSC, where the shares are freely offered to third parties. The liability of the participants is always limited to the amounts of their contributions (the value of the shares). The number of participants - from 1. AD must have at least one director, preferably a resident. The authorized capital must be not less than 25,000 Euro. A company should hire an auditor to evaluate the accounting. AD has stricter accounting and reporting requirements. The company must engage an auditor to assess compliance.


    • There are many other forms of business in Estonia (sole trader, general partnership, limited partnership, branch, etc.). Provide Smart Startup UK lawyers with more information about your case so they can find the most suitable business form in your case.


    Procedure for registration of a legal entity


    The process of registering a company in Estonia includes the following steps:

  • Choosing the spheres of activity in which you plan to realize your business interests.
  • Choosing and checking the trade name for the future Estonian legal entity.
  • Employment of managers and legal addresses of the company in Estonia - registration of all related documents.
  • ID card registration and installation of electronic signature software (or power of attorney for remote company registration).
  • Collection of information about the participants, beneficiaries and management of the future Estonian company.
  • Preparation and execution of incorporation and registration documents for the Estonian company. Sending the log package to the registrar for review.
  • Registration for payment of taxes and mandatory social payments.
  • Opening bank or EMI accounts.
  • Obtaining licenses and additional permits.


    • Legislation and Regulatory Environment


    Estonian legislation is based entirely on European standards with an emphasis on innovation and the need for compliance. As a result, the jurisdiction is considered extremely favorable for launching and supporting e-commerce projects. Until recently, the jurisdiction was considered number 1 on the list of cryptocurrency countries. But after the introduction of stricter regulations on crypto-assets, the jurisdiction lost its leading position in the ranking of European jurisdictions for crypto-businesses.


    Estonian tax system


    Each option for opening a company in Estonia should be evaluated together with the following nuances of taxation:

  • Corporate tax - 20%*
  • Total income tax - 20%
  • VAT – 20%
  • Withholding Tax - (1) Corporate: (a) Dividends - 0% (b) Interest - 0% (c) Royalty - 10% (2) Individual: (a) Dividends - 0% or 7% (b) interest - 0% (c) royalties - 10%
  • Capital gains tax - (1) corporate - not applicable (2) individual - see personal income tax


    • *Profits not distributed to shareholders are not subject to the full tax.


    CREATE A COMPANY


  • Check and reserve a company name
  • Free e-governance
  • Assistance in obtaining e-government status in Estonia. E-Residence provides you with e-residency in Estonia, which allows you to manage your company and conduct business activities from anywhere in the world. We support you in completing the application, provide supporting documents and guide you through the entire process of obtaining e-residency status, allowing you to enjoy the benefits of e-residence in Estonia, including access to e-services, e-signature and e- banking)
  • Legal address for 1 year
  • Extract from commercial register (Äriregistri väljavõte)
  • Register of Directors and Secretaries
  • Local Director for one (1) year
  • Local secretarial services for one (1) year
  • Set of statutory documents of the company in electronic form
  • Contribution to the authorized capital of the company
  • VAT registration
  • Obtaining a Foreign Investment Permit
  • Opening a corporate bank account at Bigbank AS, Luminor
  • Support for obtaining a residence permit
  • Free consultation
  • Help with online trading and opening an account at viva.com for online trading
  • Accounting services - 12 months
  • Annual renewal (payable from the second year)

    • *Within 20 days


    IMPORTANT! We can provide you with the initial share capital (if the amount is over EUR 5,000) for the registration of your company in the form of a loan from our company. Please, if you are interested, make an inquiry to us.


    What is the procedure!

    1. You submit a request for company registration using the request form.

    2. We check if the registration company name is free and eligible for registration.

    3. Choose a bank that suits your company's needs from a list of Smart Startup UK partner banks provided.

    4. We send you a proforma payment invoice to pay to our bank account + the initial capital amount of your company.

    5. You receive all necessary company documents for verification.

    6. You receive details of your newly opened bank account.

    7. In the specified period (for Estonia it is 20 days), you receive all the services included in the package.

    8. You can manage through our platform all the services included in the package, as our team works 24/7 and you can get help from us within up to 30 minutes. We have built an internal ticketing system for our customers through which we process your every support request.


    All services like management, accounting, request to open bank accounts, licensing, filing tax returns, paying taxes and more are done through your account on our platform, it makes it easy managing your business!