Estonia company registration

Estonia company registration

DOING BUSINESS IN ESTONIA

Since 2003, Healy Consultants has assisted our Clients with starting their business in Estonia. Our services include i) Estonia business registration ii) regulated industries licensing iii) Estonian corporate bank account opening iv) employee recruitment strategies and v) office rental solutions.

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages

    Advantages of Estonia company registration

    1. Registration of a company in Estonia can be completed with only i) one shareholder and ii) one director, who both can be foreigners and reside elsewhere than Estonia. The minimum paid-up capital is €2,500 and the incorporation procedures can be completed within 1 ½ months;
    2. Estonia business registration facts

    3. Our Client’s company in Estonia will benefit from low operational costs because:

      • Their company will benefit from labor costs of only €10 per hour, the 10th lowest amongst all European countries;
      • Tallinn, the capital city of Estonia, is the second cheapest capital in the European Union after Zagreb for the cost of renting an office: average rental price for its CBD only amounts to €13 per square meter according to Cushman and Wakefield’s latest research report;
      • Costs to import and export products are much lower than the rest of the European Union. They average €765 per container according to the World Bank, to be compared with close to €1,100 for the global OECD average.

    4. Opening global corporate bank accounts to assist company formation in Estonia is easy. Healy Consultants works with internationally recognized banks to provide corporate bank account services;
    5. Foreign corporations can use Estonia’s free trade zones as a hub to export their products across the globe. According to the Law of Estonian Republic, customs duties, excise taxes nor VAT are not applicable to goods in transit and stored within the Free Zone for up to three years.
    6. Profits realized by an Estonia company are not subject to any income tax in Estonia provided the income is re-invested in the same company or kept in the company’s corporate bank account. This “upside down” tax system allows entrepreneurs and investors to re-invest all their income into the development of their businesses without any deductions by the government;
    7. Corporate income tax in Estonia can be deferred without any time limitations until such a time the company wishes to distribute it’s profits abroad;

    Disadvantages of Estonia company registration

    1. While companies registered in Estonia have access to the whole European Union market without any custom duties, the country’s domestic market offers limited opportunities, due to a population of only i) 1.3 million and ii) and annual purchasing power of less than US$20,000 per person;
    2. Estonian’s taxes higher than one would expect from an Eastern European country: corporate income tax and VAT rates are both fixed at 20%. Employers must also remit social contributions averaging 33% of their employees’ gross salaries;
    3. The English literacy rate in Estonia is below 30%. Consequently, language is a barrier when conducting business and communicating with employees.
  • Best uses for an Estonian company

    1. Estonia is a stable and dynamic location for investing in the EU for the following reasons:
      • Since joining the European Union (EU) in 2004, the Estonian government has maintained liberal policies; foreign investors have equal rights and obligations as local entrepreneurs. All foreign investors may establish a company in Estonia in the same way as local investors, no special restrictions are applied;
      • Estonia’s economy is growing fast, at a rate of 2% in 2015 according to the International Monetary Fund. This rate of growth should also accelerate to 3% per year until at least 2020, according to the same institution;
      • There is no risk of a debt crisis in Estonia. The country’s public debt is only recorded at 11% of its GDP, one of the lowest rates in the European Union and in the world;
      • Estonia is ranked as the 26th least corrupt country in the world, according to Transparency International, a Non-Government Organization producing a corruption index frequently used by experts, public officials and politicians;
      • The Euro is the official currency of Estonia, bringing more stability and ease in cross-border exchanges;
      • For all the reasons listed above, Estonia is ranked as the 29th most competitive country in the world by the World Economic Forum.

Company registration

  • Time to incorporate: Six weeks
  • Cost to set up: €8,150
  • Minimum capital: €2,500
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 20%
  • Corporate tax base: Worldwide
  • Shelf companies: Available
  • Main company type: OÜ company

Contact us

For additional information on our company registration services in Estonia, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Seth Ochieng, directly:
client relationship officer - Seth
estonia-travel estonia-tax estonia-government estonia ministry of economic affairs and communications estonia chamber of commerce estonia-bank estonia-tourism