Company Formation in Estonia
Top 5 Advantages of Estonia
- Undistributed profits are tax-exempt (0%)
- Only 1 director/shareholder required
- Reputable jurisdiction
- Little bureaucracy and low maintenance costs
- Fast company set-up
How long does it take to register a company in Estonia?
- 5-10 working days
- Around 2 weeks if everything is done remotely
What are the steps to register a company in Estonia?
The registration process of a company in Estonia is very simple. The experts of LegalBison will assist you throughout every step of it:
- Initial consultation and agreement
- Payment of the full invoice
- [IF REMOTELY]: Notarization of POA by client
- Preparation of registration documents
- Document signed at the notary
- Official register validity: Company appears in government register within 5 business days
Without VAT number
- Company will not be eligible to receive VAT refunds, which means everything bought is 20% more expensive (important: B2B payments between two VAT exempt companies are not 20% more expensive)
- Company will have no need to file monthly tax returns (prerequisite: no one receives a salary), which means low costs
With VAT number
- Company will be eligible to receive VAT refunds, which means you can make use of the reverse-charge mechanism
- Monthly tax returns have to be filed, even if no transactions occur
- Payroll taxes must be paid at latest on the 10th of the next month
- VAT must be paid at latest on the 20th day of the following month it was applicable to
Before we help you to apply for a VAT number (in Estonia 20%) you should carefully think about the advantages and obligations that go along with it. To register as a VAT payer might be either voluntary or obligatory, depending on the turnover (if exceeds 40 000 EUR obligatory).
- Do you want to buy a ready-made company or start a new one?
- Can you travel or do you want to do everything remotely?
- Do you want to deposit the share capital of 2.500 EUR? (no obligation to do so)
Documents to provide
- Passport copies (a scan) of shareholder/s and director/s, also beneficiary owner if applicable
- A Power of Attorney (POA) from (all) partners/shareholders is needed (in case of a remote company registration)
- Certified company documents (in case at least one of the shareholders is going to be a foreign company)
Information needed to get started
- 3 options of your desired name for the company and a company contact email address
- Names, addresses and emails of all shareholders and board members
- Short description of your company's activity
The whole incorporation process can be conducted remotely in Estonia. Below we describe what is needed so you do not need to travel to Estonia. Also, ask your consultant what benefits you would have in case you obtain the Estonian e-Residency, it may go hand in hand.
- A Power of Attorney (POA) from (all) partners/shareholders is needed
- The POA is sent to you by us based on the services you want
- You have to certify the POA by a notary and in some cases legalize it by apostille (some countries need full legalization)
- Once you have the POA on your hands, we double-check, and you send us the original form (physical document!) via courier to our address
Accounting and auditing
Generally speaking accounting in Estonia is fairly simple. For all of our clients the annual/monthly reports are being prepared by our accountants based on the documents uploaded and signed off digitally.
- A company without a VAT number is required to prepare an annual report consisting of annual accounts and a management report (with VAT monthly reports become compulsory)
- Annual reports must be filed even if no transactions occurred. Those must be filed within 6 months after the financial year is closed
- Common practice: Salaries are paid at the beginning of each month for the previous month. Payroll taxes are due latest on the 10th day of the month after the month the salary was paid out.
- When paying anything with corporate bank cards the business relevancy must be obvious and an invoice should be provided. In the opposite case all expenses without according documents shall become subject to corporate income tax
What are the residential requirements in Estonia?
- There are no residential requirements for a limited company
- 100% foreign ownership as well as directorships are allowed
- Everything can be done remotely
LegalBison offers help with all of the above requirements. We assist and are local on ground. Speak now for free with one of our consultants to get your business started.
FAQs about doing business in Estonia
- 0% tax
- Perfect to begin with
- Easy process
- Very business friendly
- Competitive tax rates
- A growing EU economy
- Very low tax
- Foreigner friendly
- Everything remote
- Lowest tax rate in the EU
- Favorable for business
- Simple and fast
- Fast incorporation
- 0% tax
- Everything remote