Company Formation in Estonia

Company Formation in Estonia

Company formation in Estonia is simple as our lawyers prepare and take care of all the documentation for you to start business in Estonia quickly. Further, our Tallinn head office provides a wide range of corporate services tailored to fit your needs. We can provide you with a turnkey solution with all necessary business services.

How we can support you in starting business in Estonia:

Setting up a new limited liability company, including new shelf companies with VAT registration

Virtual currency (crypto) license companies, EMI/PsP licensing, ICO and STO legal support

Accounting&payroll, registered office address, local representative services, banking support

The most time and cost efficient approach to register a company is to purchase a new shelf company, which can be done fully remotely with no travel to Estonia needed. The alternative founding process by oneself can be a challenge to non-residents unless an e-Residency card is obtained. Hence in most cases, non-residents of Estonia opt for a new or aged shelf company to avoid bureaucracy as we have already taken care of all the preparations and requirements. However, we do assist with new incorporations on request. We will help you to choose the best approach according to your objectives. Estonian company formation pricing starts from 880 EUR, for more information contact us for a free case evaluation and a detailed price quote »

Company in Estonia

We'll get you started in Estonia!

We have helped hundreds of businesses to set up in Estonia. We offer time and cost efficient remote setup packages with no travel needed. Our pricing for company formation in Estonia starts from 880 euros.

Priced from 880 euros
Remote setup in 2 to 5 days
e-Residency supported
Crypto licenses available
ICO, STO, EMI, PsP legal support

Limited Liability Company in Estonia

The Estonian private limited liability company (Osaühing or in Estonian) is the most common formof business as its shareholders have no personal proprietary liability for the company’s obligations. Our new limited liability shelf companies are registered in the Commercial Registry with an active registration number and no previous activity – in some cases we also create the new company as tailor-made according to your order. All Estonian shelf companies come with our 100% clean balance sheet guarantee and the full share capital payment of 2500 EUR pre-registered, hence there is no need to put up the share capital.

There are no restrictions on the number or the nationality of the shareholder(s) and board member(s). In case you have already obtained your Estonian e-Residency card we can set up an Estonian company for you remotely over the Internet. We have covered e-Residency and its advantages in our Knowledge Center article Estonian e-Residency and digital signatures. Please note e-Residency is not required nor mandatory for the initial setup, it is just helpful to administer the company in the long-term.

Company formation in Estonia can be carried out remotely with a Power Of Attorney (PoA) issued to us, digitally with an electronic-signature (applicable for a number of European Union ID card holders, inc. Estonian e-Residents) or by scheduling a notary appointment. Depending on the project we propose the most optimal solution. We prepare the legal documentation and submit all applications – we only require the basic information from your side to fill and submit the documents. After the Commercial Registry has processed all changes we forward the full legal documentation to you. It usually takes 2-5 business days for the registry to update their database to show the new shareholder(s), board member(s) and company information.

What are the steps?

Step 1: Get in touch for consultation
Let us know of your target objectives and we propose the best solution for your consideration. Preliminary consultation and detailed price quotes are free of charge.

Step 2: We take care of everything
We collect and prepare all legal documentation and forward for your confirmation and signatures. As an option we offer full remote service, no travel is needed for the company formation in Estonia.

Step 3: Start business in Estonia
We take care of all applications and set up any corporate services needed. We notify you when the process is finalized and when your company in Estonia is ready for business.

Corporate services in Estonia

We provide a full range of corporate services in Estonia including company formations, VAT and tax registrations, legal and tax advisory, virtual registered office, accounting&payroll,  licensing (e.g. crypto, ICO, EMI, PsP) and bank account opening support. Corporate secretarial services on request.

Our virtual office service is a flexible solution for companies who do not need a physical office in Estonia. We will provide an address in Tallinn that will be used for registering with the Commercial Registry and as the administrative address for the company to receive postage. The postage sent to your company will be forwarded to you by e-mail (scanned copy) or by regular mail on request. We can also set up individual local telephone and fax numbers as well as a local domain name with web hosting for your company.

Our accounting department can take care of all of your Estonian company bookkeeping, as well as consult about financial and tax questions. The monthly cost of bookkeeping depends on the company profile, for example on the number of transactions and payroll calculations. The starter package is priced at €95 per month and includes up to 20 transactions recording per month. Financial statements have to be submitted annually while VAT returns and social tax declarations have to be submitted monthly.

We work with several banks (e.g. LHV Pank and Swedbank) to ensure the most time efficient opening of a business bank account for your company in Estonia. To set up the account, a board member has to be present for a face to face meeting during the first application stage. The payment card and online banking security token are received in the second stage. Our compliance team will consult on choosing the best bank for your business and provide support through the account opening process.

It is also possible to open a fully functioning business bank account with an individual IBAN account number and with a payment payment card for your company in Estonia, fully remotely over the internet and with no travel required. We have covered this option in our Knowledge Center: Online bank account with IBAN and payment card

An audit is required when at least 2 of the following 3 conditions are met:

  • Annual net sales of 4 000 000 euros and more
  • Balance sheet volume of 2 000 000 euros and more
  • Average number of employees is at least 60

or when at least 1 of the following 3 conditions is met:

  • Annual net sales of 12 000 000 euros and more
  • Balance sheet volume more than 6 000 000
  • Average number of employees is at least 180

An auditor’s review (simpler version) is required when at least 2 of the following 3 conditions are met:

  • Annual net sales of 1 600 000 euros and more
  • Balance sheet volume of 800 000 euros and more
  • Average number of employees is at least 24

or when at least 1 of the following 3 conditions is met:

  • Annual net sales of 4 800 000 euros and more
  • Balance sheet volume of 2 400 000 euros and more
  • Average number of employees is at least 72

If the management board is located in a foreign country then a reliable agent has to be appointed and entered into the Commercial Registry to whom the procedural documents may be delivered in Estonia. The registered agent is a passive representative of the company and does not have the right to make any declarations of intent on behalf of the company. According to the law a notary’s office, a law or audit firm, or a licensed trust and company service provider may be designated as such agent/contact person. We hold the license to provide this service.

For licensing projects please contact our office for further information. Regarding Estonian crypto licenses please refer to: Crypto Licenses & Compliance in Estonia

Taxation basics in Estonia

We have listed the main corporate taxation key points in Estonia. For more specific tax related questions contact us for consultation with our country specific tax specialist.

Corporate profits are not taxed (tax rate 0%) until the profits are distributed as dividends. In other words, all undistributed corporate profits are tax-exempt. This exemption covers both active (e.g. trading) and passive (e.g. dividends, interest, royalties) types of income, as well as capital gains from sales of all types of assets, including shares, securities, and immovable property.

The taxation of corporate profits is postponed until the profits are distributed as dividends or deemed to be distributed. From the Estonian perspective, this tax is considered a CIT and not a WHT, so the tax rate is not affected by an applicable tax treaty. Distributed profits are generally subject to the 20% CIT at 20/80 of the net amount of profit distribution. For example, a company that has a profit of 100 EUR available for distribution can distribute dividends of 80 EUR, on which it must pay CIT of EUR 20. The alternative way of netto dividend calculation can be viewed as if company wishes to distribute netto 100 EUR from profit, then 25 EUR CIT applies, meaning the total profit distribution fund is 125 EUR.

The standard VAT rate (in Estonian käibemaks, KM) is 20% and applies to all supplies of goods and services. The 9% reduced rate applies to accommodation, books, listed pharmaceutical products and medical devices. The VAT rate on the export of goods, intra-Community supply of goods and certain services is 0% (i.e. exemption with credit). It is required to register with the Tax and Customs Board as a VAT payer if the annual taxable turnover exceeds 40 000 EUR.

Employers registered in Estonia (including permanent establishments of the foreign entities) must pay social tax on all payments made to employees. The rate of social tax is 33% (20% for social security and 13% for health insurance). The minimum gross salary in Estonia is 584 EUR/month as of 2021, which means that the wage fund for employer is approx. 780 EUR inc. state taxes. A useful salary fund calculator can be found here: https://www.kalkulaator.ee/en/salary-calculator

Frequently Asked Questions

Below we have included the frequently asked questions for company formation and corporate services in Estonia and the appropriate answers.

What documentation is needed?

In order to register and process your order we ask for you your passport scan, residential address (w. utility bill) and contact details.

How long does it take?

It usually takes 2 to 5 business days for the Commercial Registry to process the company setup. Please note this timing is calculated from the point we receive all requested documentation from you.

Do I have to come to Estonia?

The company setup procedures can be processed fully remotely with travel to Estonia not required.

Why prefer the shelf company?

The most cost and time efficient alternative to forming a new company from scratch is to acquire a shelf company, which is very common in Estonia. The advantage of the shelf company is that the business can start functioning at once and that the company already has a registration number. Further, we have already pre-registered the share capital payment, hence no separate transfers are needed at the setup phase. We may however support with a new incorporation as well if this should be preferred.

What if I am not from the EU?

The Estonian commercial code does no set forward any restrictions to non-EU participants. Only a local contact person (registered agent) has to be appointed. We hold the license to provide this service.

How much does it cost?

Our pricing for both new company formations and new shelf companies in Estonia starts from 880 EUR. The final cost of your project will depend on further services required such as local registered office address, registered agent service or similar. Also the annual costs will depend on the list of required services. We would be glad to provide a detailed quote specific to your project.

Do I need registered office address?

Having a local registered office address is mandatory for every Estonian company. The legal address will be shown in the commercial registry and the official letters addressed to the company will be sent to this address. We provide a virtual registered office address as a service and forward the postage received as scanned copies to your e-mail.

Can I choose the company name?

Yes, you can choose the company business name. It is subject to registry availability. You can check the company name availability here: https://ariregister.rik.ee/nimeparing?lang=eng

How do I open the bank account?

There is no shortage of Scandinavian and local banks in Estonia and banking systems are highly advanced, however opening a bank account can be challenging and take time. It is not possible to open the bank account by proxy or by Power of Attorney, a face to face meeting is required at the bank. However, as a solution for a quick start it is also possible to open with a fintech bank in the European Union which can be done online with no visit needed and then proceed to opening with a local traditional bank in Estonia in later steps.

What about reporting requirements?

Irrespective of size, the Estonian limited company has to file annual accounts with the commercial registry once a year. Small companies are exempted from the requirement of appointing an auditor. VAT returns and social tax declarations have to be submitted monthly. Our accounting department can take care of all reporting requirements on your behalf.

How to register for VAT?

We support in preparation and submission for VAT registration and all other necessary tax registries on your behalf.

How do I get started?

In the first step please let us know of your objectives for setting up a company in Estonia. In the second step we propose the best solution with a step-by-step overview and a detailed price quote for company formation in Estonia. In the third step we take care of all legal documentation and applications.

Questions? Interested in starting business in Estonia?

Questions regarding company formation in Estonia will be answered promptly by contacting us through the contact form below. If you would like to receive an overview of procedures and pricing break-down for your project we kindly ask to include preliminary information, for example how many participants will be in the company structure and which country residency they hold. Our country manager will respond shortly with more information to address your case including detailed procedures, timing and pricing break-down.

    Contact details

    Our office in Estonia is located in central Tallinn. Please schedule an appointment beforehand to be connected with our country manager.

    Call our head office at +372.50.43.245

    E-mail us at info@maxcorp.eu

    Tallinn office address:
    Tornimäe 5, 10145 Tallinn, Estonia