Estonia’s advanced digital infrastructure and favorable tax policies continue to make it a leading destination for global entrepreneurs. As one of Europe’s most innovative economies, the country offers an ideal environment for launching and scaling businesses, particularly in high-growth sectors like IT, fintech, and digital services.
Simple, Fast, and Remote Company Formation
One of the key benefits of setting up a company in Estonia is the streamlined, fully online registration process. Thanks to the e-Residency program, establishing your business can be done from anywhere in the world, providing unparalleled convenience. This simplicity attracts those eager to enter the European market without the hassle of relocating or navigating complex bureaucracy.
Essential Knowledge at Your Fingertips
To simplify your journey, we’ve compiled an FAQ section that addresses the most pressing questions about doing business in Estonia. Covering everything from legal requirements and tax obligations to leveraging digital solutions, these questions and answers are designed to give you a comprehensive understanding of what it takes to succeed here.
FAQ: Setting Up a Business in Estonia
Our detailed FAQ guide is your ultimate resource, offering clear explanations of key procedures and requirements. By exploring these answers, you’ll be able to make informed decisions and ensure a smooth company incorporation process, all while staying compliant with local laws.
Explore the Top 30 Frequently Asked Questions for Smooth Business Setup
Discover expert insights on crucial topics, such as how to optimize the e-Residency program, meet tax responsibilities, and set up a solid legal foundation. With this knowledge, you’ll be prepared to avoid common pitfalls and take full advantage of Estonia’s entrepreneur-friendly ecosystem.
- How Attractive is Estonia for Business?
Estonia ranks among the top 20 countries on the World Bank’s Ease of Doing Business Index. Its favorable tax system and the e-Residency program attract global entrepreneurs, offering competitive advantages for business growth.
- What Are the Benefits of Establishing a Company in Estonia?
Key benefits include remote company registration, zero tax on reinvested profits, and full access to the EU market, making Estonia highly appealing for international business ventures.
- What Types of Companies Can I Register in Estonia?
You can establish a Private Limited Company (OÜ), Public Limited Company (AS), or Sole Proprietorship (FIE), with OÜs being the most common due to their simplicity and founder liability protection.
- What is the Most Popular Business Entity Form?
The Private Limited Company (Osaühing, OÜ) is the most popular, similar to an LLC, thanks to ease of management and limited liability. Over 95% of entities in Estonia are OÜs.
- Can I Establish a Company Online?
Yes, with e-Residency, company formation can be fully managed online.
- How Long Does It Take to Start a Company in Estonia?
Setting Up a company can take from 1 to 5 working days. Online registration using e-Residency is typically completed in one day, while notary services may take a little longer.
- What is the Cost of Establishing a Company in Estonia?
Costs range from €365 to €1200, varying based on registration methods and additional services like legal address or accounting.
- What is the Minimum Share Capital Required?
The minimum share capital required is €0.01, making incorporation accessible to almost any entrepreneur.
- Do I Need to Be Present in Estonia to Incorporate a Company?
No, you can establish a company remotely using e-Residency or a notarized power of attorney for our lawyers to register on your behalf.
- Can I Use a Virtual Office as a Legal Address?
Yes, virtual office addresses are acceptable and widely used for Estonian entities.
- Can Foreigners Found Companies in Estonia?
Yes, there are no restrictions on foreigners being founders of Estonian enterprises.
- Is a Local Director Required?
No, your company’s director can be from any country, with no requirement for a local resident.
- Is Hiring Local Employees Mandatory?
No, hiring local staff is not obligatory.
- Is Company Director and UBO Information Public?
Yes, the Estonian Business Register is public, displaying directors, shareholders, UBOs, and annual reports.
- What is e-Residency?
e-Residency offers digital identity and various e-services, allowing non-residents to incorporate undertakings, manage business, and sign documents online.
- How Do I Apply for e-Residency?
Apply through the official e-Residency portal. You’ll need to verify your identity, pay the state fee, and collect your kit from a designated location.
- What is the Corporate Tax Rate in Estonia?
Estonia taxes profits only when distributed as dividends. Reinvested or retained earnings remain untaxed. The tax on distributed profits is 20%.
- Is Accounting Mandatory?
Yes, all entities must maintain accounting records and comply with financial reporting laws, regardless of their size.
- Are Annual Reports Required?
Yes, annual reports must be filed, including financial statements, by June 30 each year to avoid penalties.
- Is an Audit Necessary?
Audits are mandatory only if turnover, balance sheet, or employee numbers exceed set thresholds.
- Do I Need a Local Bank Account?
Opening accounts in both local and foreign banks is possible, offering flexibility for international operations.
- Where is the Easiest Place to Open a Business Account?
Services like Wise, Paysera, and Revolut offer streamlined, low-fee account setup, ideal for entrepreneurs managing global transactions.
- Can My Company Invest in Cryptocurrency?
Yes, you can invest your company’s funds in crypto and other financial instruments.
- Can My Business Accept Crypto Payments?
Yes, Estonian companies can accept cryptocurrency payments for goods and services.
- What Business Types are Popular in Estonia?
Popular sectors include IT, fintech, e-commerce, and innovative startups, thanks to Estonia’s digital ecosystem and business-friendly policies.
- Is Estonia Good for IT Startups?
Yes, Estonia’s robust digital infrastructure and startup support programs make it ideal for tech companies.
- Can I Register a Fintech Company in Estonia?
Yes, Estonia actively supports the development of the fintech sector and offers favorable conditions for registering and operating fintech companies, including innovative solutions in electronic payments and blockchain.
- Can I Open a Startup in Estonia?
Absolutely. Estonia supports fintech innovations, especially in electronic payments and blockchain solutions.
- Is Estonia Suitable for E-commerce?
Yes, with EU market access and a high-tech environment, Estonia is perfect for running e-commerce platforms.
- How Do I Dissolve My Company?
If the company hasn’t operated, dissolution is straightforward. For active companies, liquidation involves a 6-9 month process with creditor notifications and financial statement submissions.
We hope the answers to frequently asked questions have given you a clear understanding of what is needed for a successful start and operation of a business. Your decision to start a business here could mark the beginning of a new chapter full of innovation and prosperity.
CONTACT US
If you have additional questions or need help with starting a company in Estonia, feel free to reach out to us. We are always ready to offer professional support and consultation to ensure your business project gets the best possible start.
Eesti Firma – Your Reliable Partner in Estonia
We also invite you to visit our office in Tallinn for a personal meeting to discuss all aspects of your business. Our experts will help you navigate the entire process of establishing an enterprise and answer all your questions.
