Estonia
Company Formation
Estonia has established itself as a leader in digital innovation and is one of the most progressive jurisdictions in Europe for company formation.
Known for its e-Residency programme, which allows entrepreneurs to manage their businesses entirely online, Estonia is an attractive option for tech start-ups, fintech companies and digital businesses.
With a transparent legal system, favourable tax conditions and access to the European Union, Estonia is an ideal jurisdiction for modern businesses looking to operate internationally.
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Why Estonia
- Estonia is a leading jurisdiction for digital businesses, offering a unique tax regime, access to EU markets and cutting-edge digital infrastructure.
- Its tax system, which taxes profits only when distributed, allows maximum flexibility for reinvestment.
- EU membership provides access to the single market and free trade agreements, while the e-Residency programme enables remote business management.
- Estonia boasts a tech-savvy, highly skilled workforce and a transparent legal environment aligned with EU regulations.
- Start-ups benefit from innovation grants, digital infrastructure and a thriving tech ecosystem, making Estonia an ideal choice for forward-thinking businesses.
Key Contacts
Alexia Panzavecchia
Claire Marie Calleja Zammit
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Useful Links
Key Information Overview
 | Types of Companies | Private Limited Company (OÜ), Public Limited Company (AS), Branch |
 | Minimum Share Capital | OÜ: €2,500, AS: €25,000 |
 | Registered Office | Must have a registered office in Estonia |
 | Shareholders & Directors | At least 1 shareholder, 1 director (director can be non-resident) |
 | Bank Account | Must open a local bank account |
 | Tax Regime | No corporate tax on undistributed profits; 20% tax on distributed profits |
 | Time to Complete Incorporation | 1-2 weeks |
 | Annual Maintenance Costs | Varies based on company size; includes annual registration and compliance fees |
 | Audit Requirements | Mandatory for larger companies |
 | Market Access | Access to EU single market, strong e-residency program |
 | Key Benefits | No corporate tax on reinvested profits, digital-friendly infrastructure |
 | Legal Framework | Based on civil law |
 | Physical Presence Requirements | Registered office required |
 | Corporate Governance Requirements | At least 1 director and 1 shareholder |
 | Language Requirements | Estonian, but English can be used for business documents |
 | Tax Residency Rules | Managed and controlled from Estonia |
 | Required Documents | Memorandum & Articles of Association, ID proof, registered office address |
 | Compliance & Reporting | Annual returns, financial statements, VAT filings |
 | Employee and Payroll Requirements | Must comply with Estonian employment laws, including social security contributions |
Types of Companies
Estonia offers several corporate structures that cater to different business needs, from small start-ups to larger corporations.
01
Private Limited Company (OÜ)
- The most popular company structure in Estonia, suitable for small and medium-sized businesses.
- Minimum share capital requirement: €2,500 (but can be deferred until the company starts distributing profits).
02
Public Limited Company (AS)
- Suitable for larger businesses, particularly those looking to list on stock exchanges.
- Minimum share capital requirement: €25,000.
03
Branch of a Foreign Company
A foreign company can establish a branch in Estonia, which is an extension of the parent company and does not have separate legal personality.
04
Partnership
Partnerships in Estonia can either be general or limited, offering flexibility depending on business requirements.
05
Special Purpose Vehicles (SPVs)
Estonia’s modern corporate structure allows for the formation of various SPVs, especially for investment and asset protection purposes. These structures benefit from Estonia’s digital infrastructure and EU membership.
Holding Company
Estonia’s holding company regime is particularly tax-efficient. Companies can benefit from tax exemptions on dividends received from qualifying subsidiaries and no withholding tax on dividends paid to non-resident shareholders.
Securitisation Vehicle
SPVs in Estonia can be used to package assets and securities for investors, benefiting from the country’s well-regulated financial sector and competitive tax regime.
Investment Funds (AIFs, UCITS)
Estonia is a growing hub for investment funds, with an increasing number of Alternative Investment Funds (AIFs) and UCITS, making it attractive for asset managers and investors.
Trusts and Foundations
Estonia offers foundations for asset protection and estate planning, with robust legal protections for trustees and beneficiaries.
Start-Ups
Estonia is a start-up haven, particularly for tech-driven businesses, fintech companies and digital innovators. The country’s e-Residency programme and digital infrastructure make it easy for entrepreneurs to manage their businesses remotely.
Tax Incentives:
- Corporate Tax Rate: Estonia has a unique tax system where profits are only taxed when distributed, allowing companies to reinvest profits tax-free.
- Innovation Grants: Start-ups involved in technology or R&D can access innovation grants and tax credits.
Government Grants and Support:
- Start-Up Visa: Estonia offers a dedicated visa for start-up founders and key employees, making it easier for international talent to relocate.
- EAS Grants: Enterprise Estonia offers various grants and loans to support innovative start-ups, particularly those focused on technology and R&D.
Business Support:
Incubators and Accelerators: Estonia has a strong ecosystem of incubators and accelerators, providing mentoring, office space and access to investors.
Access to Markets:
EU Membership: Estonia’s position within the EU allows start-ups to access the single market and benefit from free trade agreements across Europe.
Digital Innovation:
e-Residency Programme: Estonia’s innovative e-Residency programme allows foreign entrepreneurs to manage an Estonian company entirely online.
A
Grade A: Highly Start-Up Friendly
Estonia’s forward-thinking approach to business, particularly in technology and innovation sectors, makes it one of the most attractive destinations for start-ups. With its digital infrastructure, e-Residency programme and government support, Estonia is a leader in fostering entrepreneurship.
Benefits
Incorporating in Estonia offers several strategic advantages for modern businesses, from tax efficiency to its digital-first infrastructure.
Tax Efficiency
Estonia’s unique corporate tax system allows companies to retain and reinvest profits without paying tax until dividends are distributed.
Digital Infrastructure
Estonia is a world leader in e-Government services and digital business solutions, allowing for quick and efficient business management, all online.
EU Membership
Companies in Estonia benefit from access to the European Union’s single market, providing free movement of goods, services and capital across Europe.
Skilled Workforce
Estonia has a highly educated, tech-savvy workforce, particularly in the fields of technology, digital services and financial innovation.
Transparent Legal System
Estonia’s legal system is transparent, well-regulated and compliant with EU standards, offering strong protection for businesses and investors.
Requirements
Incorporating a company in Estonia requires fulfilling several legal and administrative obligations. Here are the key requirements.
01
Shareholders
A Private Limited Company (OÜ) can be formed with a minimum of one shareholder. There are no nationality or residency restrictions for shareholders.
02
Directors
At least one director is required for an OÜ. Directors can be of any nationality and there are no residency requirements.
03
Company Secretary
There is no mandatory requirement for a company secretary in Estonia.
04
Registered Office
A company must have a registered office in Estonia, which will serve as its official address for legal correspondence.
05
Minimum Share Capital
The minimum share capital for a Private Limited Company (OÜ) is €2,500, although this does not need to be paid immediately upon incorporation.
06
Bank Account
A corporate bank account must be opened in Estonia or within the EU to deposit the share capital and for the company’s operational needs.
Mergers & Acquisitions
TAILORED SUPPORT to fast-track your market entry
Our Mergers & Acquisitions services are designed to assist clients in acquiring existing companies with pre-established licenses, streamlining the process of entering or expanding in key markets. These services are particularly relevant for investors seeking to fast-track their market entry while ensuring efficient and compliant solutions.
Identifying Suitable Businesses
We help clients locate companies that meet their specific goals, focusing on entities with strong operational histories and the required licenses.
Legal and Regulatory Assistance
Our experts guide clients through the unique legal and compliance frameworks of each market, ensuring a smooth acquisition process with minimal risk.
Valuation & Due Diligence
We conduct in-depth assessments of the target company’s financial and operational status, providing transparency and confidence in the acquisition.
Post-Acquisition Support
For clients who decide to divest, we offer comprehensive services to facilitate the sale of the company and transfer of licenses.
Frequently Asked Questions
What is unique about Estonia’s corporate tax system?
Estonia does not tax corporate profits until they are distributed as dividends, making it an attractive jurisdiction for businesses that want to reinvest profits tax-free.
Are there withholding taxes on dividends in Estonia?
No, Estonia does not impose withholding taxes on dividends paid to non-residents, which is beneficial for international investors.
What legal structures are available for businesses in Estonia?
The most common structure is the Private Limited Company (Osaühing, OÜ), which offers limited liability and flexibility for entrepreneurs.
Are audited financial statements required in Estonia?
Yes, larger companies must file audited financial statements, while smaller companies may be exempt from audit requirements but must still submit annual reports.
What is the VAT rate in Estonia?
The standard VAT rate in Estonia is 20%, though certain goods and services may qualify for a reduced rate of 9%.
Does Estonia offer double taxation relief?
Yes, Estonia has double taxation treaties with over 60 countries, helping to avoid dual taxation of income.
What are the residency requirements for directors in Estonia?
There are no residency requirements for directors in Estonia, making it flexible for international business owners.
What is the process for incorporating a company in Estonia?
The process involves registering the company with the Commercial Register, drafting the Articles of Association and depositing the minimum share capital.
Does Estonia provide any tax incentives for start-ups?
Yes, Estonia offers various tax incentives and support programs for start-ups, particularly in technology and innovation sectors.
How long does it take to incorporate a company in Estonia?
Incorporation is generally fast in Estonia, taking around 1 to 2 weeks, thanks to the country’s efficient e-governance system.
Need assistance?
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