Company Formation in Estonia

Basics for Company Formation in Estonia

Estonia Crypto Company FormationCompany formation in Estonia, a small digitally advanced EU nation, is simple as our legal team takes care of all documentation for the full setup. We offer a wide range of corporate services tailored to fit your needs, including but not limited to company formation, legal and tax advisory, virtual currency (crypto) license support, bank account opening, virtual office and accounting. We also have availability for Estonian shelf companies with previous activity (e.g. older registration dates) and active VAT registrations. Most of our services are available with an optional remote setup package. We can provide you with a turnkey solution with all the necessary support services.

The most time and cost efficient approach for company formation in Estonia is to purchase a new shelf company, because the founding process can be a challenge to non-residents due to various hidden requirements (e.g. share capital payment). In most cases, non-residents opt for a new tailor-made shelf company to avoid bureaucracy as we have already taken care of all 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 680 EUR depending on the corporate structure, for more information contact us for consultation and a detailed price quote »

Company in Estonia

Company Formation in Estonia
Priced from 680 euros
Remote setup in 2 to 5 days
e-Residency supported
Crypto licenses available
ICO and STO legal support
VAT active companies available

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).

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.

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 the necessary information from you, prepare all documentation and forward for your confirmation. We offer full remote service.

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 if 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 legal and tax advisory, blockchain structures and crypto licensing, virtual office, accounting and bank account support. Secretary services on request.

Our virtual office service is a flexible solution for companies who do not need a physical office in Estonia. Our legal address in Tallinn 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. We can also provide the VAT registration form and assistance with its completion. 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 bank account, the management 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 team member can be appointed to receive these on your behalf and they will then be forwarded to you.

It is important to note that it may be challenging to open at a traditional bank account in Estonia for non-residents, the main premise is for the company to have substance in Estonia (e.g. local partners). Depending on your business profile we can recommend the best approach forward, including solutions for crypto focused companies. 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 and with a VISA payment card for your company in Estonia, remotely over the Internet. We have covered this option in our Knowledge Center: Online bank account with IBAN and payment card

If the management board is located in a foreign country then a reliable agent has to be appointed and entered into the 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. The address of the agent shall be considered the address of the company. We hold the license to provide this service.

Estonia has a favourable tax and legal environment for cryptocurrency exchange companies. Companies aiming to deal with virtual currencies can apply for 2 different activity licenses:

  • providers of a service of exchanging a virtual currency against a fiat currency;
  • providers of a virtual currency wallet service.

We can assist in obtaining both the cryptocurrency exchange and wallet service licenses. The full procedure to set up the company and obtain the licenses can be mostly carried out remotely with no visit required. For more information see Cryptocurrency Exchange License in Estonia.

In case you have already obtained your Estonian e-Residency 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.

Taxation basics in Estonia

Estonia has one of the most liberal tax regimes in the world as the tax rate on reinvested profit is 0%. The income tax at a rate of 20% is charged on gross dividends. The general VAT rate is 20%.

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.

Estonia levies a corporate withholding tax only on profits that are distributed as dividends, share buybacks, capital reductions, liquidation proceeds or deemed profit distributions. Income tax at the rate of 20% is charged on gross dividends (calculated as 20/80 of the net dividend).

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). Minimum wage in Estonia is 540 EUR/month as of 2019.

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

Questions? Let us know!

Questions regarding company formation in Estonia will be promptly answered by contacting us through the form below. Our legal team will respond shortly with more information to address your case.

Questions about Company Formation in Estonia? Our legal team will guide you through the process!

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.