Estonia is an oasis for software developers, where bold, global, and innovative web projects, mobile apps, operating systems, computer games, and drivers come to life. This Baltic state has created ideal conditions for growing and scaling an IT business. The country's digital infrastructure supports comfortable company management, efficient operations, and competitiveness. The experts at the international law firm Maira Consult explain in more detail why Estonia is so popular among software developers.
Estonia for software developers: 10 reasons in favor
Estonia ranks first in the world when it comes to tech globalization. There are 1,090 tech startups per million Estonians. This Northern European country brings together the best conditions for launching and growing software firms:
A favorable tax policy that supports financial optimization.
Fast registration of a software development company in Estonia.
Full digitalization of business processes.
The ability to run a business from another country without a physical presence on Estonian territory.
A digital state ecosystem that lets you file reports and communicate with regulatory authorities online.
Minimal bureaucratic requirements for business entities.
A large pool of highly qualified specialists in the labor market.
Widespread use of English in the workplace, which matters for the IT sector and software developers.
A unified environment that brings together not only like-minded professionals and experienced mentors, but also venture investors.
A clear legal system with business-friendly legislation and guaranteed protection of intellectual property.
What's more, registering a company in Estonia for software development lets owners and employees relocate to the country on legal grounds.
A digitized state is the key to success for a software company
Estonia's thoroughgoing digitalization has turned the country into a global hub with no room left for heavy bureaucracy. Thanks to the e-Estonia concept, developing software in Estonia comes with minimal administrative costs, which significantly boosts business profitability.
Advantages of a digital state | Features |
e-Residency | The e-Residency program is a unique digital residency solution that unlocks the following advantages for business:
All of this removes the need for a personal visit to the country, paperwork hassles, and the cost of maintaining an office. |
An online state in your pocket | A Digi-ID signature lets you interact with regulatory bodies through electronic portals, submit reports, and exchange documents literally from a smartphone, from anywhere in the world. |
European finance | Once you have a smart card, you can remotely open corporate multicurrency accounts, both with European banks and with payment systems (for example, Wise, Revolut). |
Minimal paperwork requirements
One of the major benefits of Estonia's digitalized state is that there is no requirement to maintain paper-based bureaucracy. 99% of all government institutions have gone digital. Government services are available 24/7 online.
Digital Estonia offers software developers a number of undeniable advantages:
with a Digi-ID signature, contracts with counterparties are concluded instantly, and the electronic signature itself is legally valid in every country of the European Union;
with the integration of the tax, banking, and financial sectors, automated accounting reporting has become available;
end-to-end digitalization keeps errors in tax returns and financial statements to a minimum.
A ready-made, standardized business environment is geared toward the successful growth of startups, sparing them the physical and financial costs of administrative red tape.
Easy launch for a software development business
Estonia is an excellent choice for software developers looking to launch a startup or move their business into an international format. Here, you can open a software company in just 1-2 days with the professional team at Maira Consult. For a detailed, step-by-step guide, read our article "How to open an IT company in Estonia".
Advantages of opening a software development company in Estonia | Process features |
Online registration | A software development company in Estonia can be registered online from any other jurisdiction. |
Board members, director | To minimize costs, you can have a single director, who may be either a resident or a non-resident of Estonia. |
Share capital amount | By law, a software development company in Estonia can be registered with a declared share capital of as little as €0.01. It is standard practice to open an OÜ with a share capital of €2,500, and the full amount does not have to be deposited into the account right away. |
Official contact person | If the owners and board members do not hold Estonian citizenship, this is resolved by hiring a contact person through a law firm. |
Many types of activity in Estonia require a license. Software development in Estonia does not fall under any mandatory special licensing requirement, which makes it easier to start and run the business and removes the need for extra financial outlays.
State support for innovative solutions is another reason to choose Estonia for software development. Startups thrive with financial assistance such as grants (the Startup Grant and Digital Transformation, Development & Applied Research Grants), investment from the EIS fund, and support from Startup Estonia.
A favorable tax climate for registering a software development company in Estonia
Estonia is also an attractive choice for software developers from a taxation standpoint. Its unique tax policy is built to reward companies that reinvest profit into growth, expansion, and scaling their business. Undistributed income is not subject to tax (0% CIT). When profit is channeled into development and research, purchasing servers and equipment, product development, marketing, or hiring experienced programmers, the corporate tax rate is 0%. Tax is only paid when dividends are paid out, at a rate of 22%.
Registering a software development company in Estonia erases the borders on the way to a unified European IT market and opens up access to financial and banking tools. Estonia lets software developers avoid burdensome bureaucracy and administrative costs and achieve tax optimization, profitability, and rapid growth for their software company. With the expert team at Maira Consult, the path to opening and growing your firm will be free of legal risks, hidden legislative pitfalls, and unnecessary financial and time costs.
