PayPal Business Account for an Estonian Company: Setup, Fees and Limits

Many online shoppers look for a PayPal button at checkout, especially when they buy from a shop they do not know. If your company sells through a website or to private clients abroad, offering PayPal can mean fewer abandoned checkouts.

An Estonian private limited company (OÜ) can use PayPal like any other EU business. This guide explains how to open a PayPal Business account, what it costs in Estonia and how to get the money out. It also covers the issues that e-residents and other founders running a company from abroad face most often: payment holds, account limitations and accounting.

Can an Estonian Company Open a PayPal Business Account?

Yes. PayPal serves Estonian customers through PayPal Europe, which holds a banking licence in Luxembourg. Its user agreement for Estonia requires a business to be registered in Estonia or another country on its list. A company in the Estonian Commercial Register therefore meets this condition even if its owner lives abroad.

PayPal also verifies the person who manages the account and may ask for proof of their home address. Founders living in a country where PayPal does not offer its services should expect closer questions. Most problems start when the details in the application do not match the documents.

The account must be a business account, not a personal one: PayPal’s terms require this for selling, and the company’s sales have to reach the company rather than the founder’s personal PayPal.

What PayPal Business Gives Your OÜ

A PayPal Business account lets the company accept payments in several ways:

• a PayPal button at the checkout of your website or online shop, with plugins for platforms such as Shopify and WooCommerce;
• card payments from buyers who do not have a PayPal account;
• invoices and payment links that you can share by email, text message or social media;
• QR code payments for sales in person.

Payments arrive in a PayPal balance that can hold several currencies. PayPal’s Seller Protection programme covers eligible sales paid from a buyer’s PayPal account against unauthorised-payment and non-delivery claims, but not card payments from buyers without one.

PayPal works best for online sales to consumers: e-commerce, digital products and online courses. For B2B work it matters less, because business clients usually pay by bank transfer, and a company expecting a large volume of card payments should also compare it with Stripe.

How to Open a PayPal Business Account for an Estonian Company

You can apply only once the OÜ appears in the Commercial Register, so set up the company first, either online with e-Residency or at a notary.

1. Go to PayPal’s website for Estonia and choose a business account.
2. Copy the company’s name, registry code and registered address from the Commercial Register letter for letter.
3. Add the details of the person who will manage the account and of the company’s beneficial owners, the people who ultimately own or control the business.
4. Describe what the company sells, where its customers are and which website you will use.
5. Link and confirm the company’s euro bank account, then complete any verification steps PayPal shows.

Documents PayPal May Ask For

PayPal often confirms your details automatically and asks for documents when it cannot. Typical requests are a photo ID and proof of home address for the person managing the account, a company document and information about what you sell, sometimes with tax identification details. For the company, the standard document is the registry card, an English extract from the Commercial Register showing the company’s details, management board and address. If PayPal also wants a utility bill for the company’s address, our guide on a utility bill for an Estonian company explains what to provide instead.

PayPal Fees in Estonia

Opening the account is free, and PayPal’s fee page lists no monthly fee. The company pays mainly when it receives money. PayPal treats a payment as domestic when both the buyer and the seller are in the European Economic Area (EEA). Your OÜ therefore pays the same fee whether the customer is in Germany or in Tallinn.

These are the main figures from PayPal’s fee page for Estonia:

For example, a €100 sale to a customer in France costs €3.75 in fees. The same sale to a customer in the United States costs €5.74 because of the 1.99% international fee.

How to Withdraw Money from PayPal to the Company’s Account

An Estonian PayPal account runs in euros, and PayPal’s terms allow withdrawals only in that currency unless it agrees otherwise. Dollars or pounds can stay in the balance, but they must be converted to euros, at a 3% fee, before you can withdraw them. If many of your customers are outside the eurozone, build this cost into your prices or charge in euros.

A withdrawal in euros is free and usually arrives within one business day, although some banks take three to five. Link a bank account in the company’s name, never your personal one. The account does not have to be Estonian: according to Revolut, PayPal accepts Revolut Business accounts of Estonian companies, and a Wise Business account with a euro IBAN can work too. If PayPal’s form rejects the IBAN, contact its customer support.

PayPal Holds, Limitations and Account Closures

PayPal’s user agreement lets it hold a payment, keep part of your incoming money in a reserve or limit the whole account, which can block withdrawals. Typical triggers are a sudden rise in sales on a new account, buyer disputes, restricted goods and missing information about the company or its owners.

In PayPal’s example of a rolling reserve, part of each day’s sales is held for 90 days. After a breach of its rules, funds can be kept for more than 180 days. PayPal may also close an account with two months’ notice, or sooner after such a breach.

You lower the risk by describing the business accurately at sign-up, answering document requests quickly and shipping on time with proof of delivery. Before you sell anything sensitive, read the Acceptable Use Policy: crypto, gambling, investments, alcohol and several other categories need PayPal’s prior approval.

Do not keep the company’s money in PayPal longer than needed. Its balance is electronic money, not a bank deposit, so it earns no interest and has no deposit guarantee. Pay taxes, salaries and suppliers from a main business account, and move PayPal funds there regularly. Should PayPal or another provider close the company’s account, our guide on what to do when a bank closes your company’s account explains the next steps.

PayPal Money and Your Company’s Accounting

Money on the company’s PayPal account belongs to the OÜ, not to you. Founders who move from freelancing to a company sometimes keep using PayPal as a personal wallet, but private purchases paid with company money make the company liable for income tax. Take money for yourself only through the company’s bank account, as a salary, board member fee or dividend. Our comparison of salary and dividends sets out the tax on each.

Because PayPal takes its fee from each payment before the money reaches your balance, the bank transfers alone understate both sales and costs. Send your accountant the monthly PayPal activity report as well, so that every sale, fee, refund and conversion is booked. If the company sells to consumers in other EU countries, it may owe VAT there; our guide to VAT OSS for e-commerce explains the rules.

How Eesti Firma Helps

We register Estonian companies for e-residents and founders from abroad, provide the registered address and prepare the company documents payment providers ask for. Our accounting team can then keep your company’s books, including its PayPal transactions.

If you plan to sell online through an Estonian company and accept PayPal, tell us briefly what you sell and to whom. We will suggest a company set-up that fits.

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