Estonia company registration

DOING BUSINESS IN ESTONIA IN 2022

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Since 2003, Healy Consultants Group PLC 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.

Compare different Estonia entities LLC Fast business setup solution Free zone LLC Public limited company LLP Representative office Branch office
Also known as Osaühing Osaühing Vabatsooni firma Aktsiaselts  Piiratud vastutusega ühing Filiaal Esindaja
Best use of company? All products and services Close a customer deal now Manufacturing and export trading To secure public funding Professional services Marketing & research Specific projects
How soon can you invoice Clients/sign sales contracts? 1 month 2 weeks 2 months 2 months 2 months 2 months 2 months
How soon can you hire staff? 2 months 5 weeks 2 months 2 months 2 months 2 months 2 months
How soon can you sign a lease agreement? 1 week 1 week 1 week 1 week 1 week 1 week 1 week
How long to supply corporate bank account numbers? 1 month 2 weeks 1 month 1 month 1 month 1 month 1 month
How long to supply company registration/tax numbers? 1 month 2 weeks 2 months 2 months 2 months 2 months 2 months
Corporate tax rate on annual distributed business profits? 20% 20% up to 0% 20% 0% 0% 20%
Limited liability entity? Yes Yes Yes Yes Yes No No
Government grants available? Yes Yes Yes Yes Yes No Yes
Resident director/partner/manager/legal representative required? No No Yes No No Yes Yes
Minimum paid up share capital? (EUR) 2,500 2,500 2,500 25,000 None None None
Corporate bank account location? BigBank LHV Pank SEB bank BigBank SEB bank Tallinna Äripank Swedbank
Can secure trade finance? Yes Yes Yes Yes Yes No Yes
VAT payable on sales to local customers? 20% 20% 20% 20% 20% No sales allowed 20%
Average total business set up engagement costs? (EUR) 10,400 Inquire proposal 14,000 10,500 9,350 10,500 10,500
Average total engagement period? 2 months 2 months 3 months 3 months 3 months 3 months 3 months

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Accounting and tax considerations LLC Fast business setup solution Free zone LLC Public limited company LLP Representative office Branch office
Corporate tax rate on annual distributed profits on business? 20% 20% up to 0% 20% 0% 0% 20%
Legally tax exempt if properly structured? Yes Yes Yes Yes Yes No No
Group HQ tax incentives? Yes Yes Yes Yes Yes No Yes
Must file an annual tax return? Yes Yes Yes Yes No Yes Yes
Must file annual financial statements? Yes Yes Yes Yes No Yes Yes
Must appoint an auditor? No No No Yes No No No
Access to double taxation treaties? Yes Yes Yes Yes Yes Yes No
Withholding tax on payments to foreign shareholders? No No No No No No No
Company Registration LLC Fast business setup solution Free zone LLC Public limited company LLP Representative office Branch office
Resident director/partner/manager/legal representative required? No No Yes No No Yes Yes
Minimum number of shareholders/partners? 1 1 1 1 2 Parent company Parent company
Minimum statutory paid up share capital? (EUR) 2,500 2,500 2,500 25,000 None None None
Must sign an physical office lease agreement during incorporation? No No Yes No No No No
Shelf companies available? Yes Yes No No No No No
Time to incorporate a new entity? 1 month 2 weeks 2 months 2 months 2 months 2 months 2 months
Can easily convert to a PLC? Yes Yes Yes Yes No No No
Can have preference shareholders/partners? Yes Yes Yes Yes Yes No No
Business Considerations LLC Fast business setup solution Free zone LLC Public limited company LLP Representative office Branch office
Good entity for trademark registration? Yes Yes Yes Yes Yes No Yes
Can secure an import and export license? Yes Yes Yes Yes Yes No Yes

Sponsorship by a local citizen required? No
Our Client needs to travel to Estonia for business set up? No
Temporary physical office solutions available? Yes
You need a local resident as bank signatory? No
Can be wholly foreign owned? Yes
The entity will likely be regulated by? Estonian Centre of Registers and Information Systems
Minimum number of directors/managers? 1
Monthly VAT reporting to the Government? Yes
Public register of shareholders and directors? Yes
Government approval required for foreign owners? Yes
Shareholders & directors documents to be attested/translated? Yes
Can bid for Government contracts? Yes
Each foreign director needs a personal income tax number? No
Foreign non resident director needs a residence visa? No
Maximum number of staff allowed? No maximum number for any entity
Expatriate to local staff ratio? None
Can secure residence visa for business owner? Yes
Other useful information
What will be included in my customer sales invoice? Click link
This country has signed free trade agreements? Yes
This country is a member of WIPO/TRIPS? Yes
This country is a member of the ICSID? Yes
Average custom duties suffered? 1%
Government foreign investment approval required? Yes
Maximum shareholding for foreigners? 100%
Average monthly office rental? (EUR per sq m) 9
Minimum statutory monthly salary? (EUR) 390
Average monthly salary for local skilled employees? (EUR) 1149
Security deposit to be kept with Government? No
US$ deposit interest rate? (1 year average) 0.4%
Overseas remittance currency controls? No
Banking considerations
Multi-currency bank accounts available? Yes
Corporate visa debit cards available? Yes
Quality of e-banking platform? Moderate
Crowd funding available in this country? Yes

Estonia business setup summary

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

  • Advantages and disadvantages

    Advantages of Estonia company registration

    Estonia business registration facts

    1. Registration of a company in Estonia can be completed with only i) one shareholder and ii) one director, and both can be foreigners and reside overseas. The minimum paid-up capital is €2,500 and the incorporation procedures can be completed within 7 weeks.
    2. 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 3.1% in 2016 according to the OECD. This rate of growth should also accelerate to 3% per year until at least 2020, according to the same institution;
      • There are no risks of a debt crisis in Estonia. The country’s public debt is recorded at only 11% of its GDP, one of the lowest rates in the European Union and in the world;
      • Estonia is ranked as the 22nd least corrupt country in the world, according to Transparency International;
      • For all the reasons listed above, Estonia is ranked as the 29th most competitive country in the world by the World Economic Forum.
      • Estonia is an excellent cost-efficient base for production and export and is geographically well-placed for access to the affluent markets of the Baltic states and the north-west Europe.
    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;
      • Profits realized by an Estonian 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;
      • 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 in Estonia 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;
      • Foreign corporations can use Estonia’s free trade zones as a hub to export their products across the globe, while being exempted from customs duties, excise taxes nor VAT.
    4. Estonia has a world-class infrastructure for technology.
      • Estonia has heavily invested in its telecommunications infrastructure. As a result, the country is gaining reputation for its expertise in Information Technology, and is gradually becoming a hub for IT-related services;
      • Estonia is the birthplace of the software, Skype- the mother of video conferencing and social networking. The software was created by three Estonians Ahti Heinla, Priit Kasesalu and Jaan Tallin and later was founded in 2003 by a Swedish and a Dane.

    Disadvantages of Estonia company registration

    1. The domestic market opportunities in Estonia are limited, because:
      • Estonia’s population is relatively small, at only 1.3 million;
      • The annual purchasing power per person is below US$20,000;
      • The country is not a tourism hot-spot, with low numbers of international tourists.
    2. Estonia’s taxes are slightly higher than what 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. Estonia has been recently ranked poorly at the 76th position (out of 190 countries) by the World Bank in terms of the protection given by the nation to its minority investors. This is largely due to a lower extent of rights enjoyed by the shareholders as well as a lower extent of disclosure in Estonian businesses;
    4. It is mandatory for the Director of an Estonia-incorporated company to provide an Annual report in Estonian at the end of every business year.
  • Best uses for an Estonian company

    1. Estonia is the optimal destination for registering a new, cost-efficient business in the Baltics and employing quality staff;
    2. Research and Development companies focused on reinvestment prefer to register in Estonia, because reinvested profits are exempt from corporate taxation.
    3. Estonia is an excellent jurisdiction for trading and manufacturing companies. This is due the presence of the following major free trade zones of i) Paldiski; ii) Muuga; and iii) Sillamae. Foreign entrepreneurs investing in them are provided with attractive incentives, including i) exemption from VAT, excise and customs duties; ii) world-class infrastructural facilities; and iii) excellent access to the consumer markets of Russia and other Nordic countries.

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For additional information on our company registration services in Estonia, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Client Engagements Manager
  • Contact me!
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