Today, Estonia has legislation harmonized with EU standards, which makes doing business in the country quite simple. For foreign entrepreneurs, this is an opportunity to quickly start a business in Europe. Read the guide to learn how to open a business in Estonia and what an entrepreneur needs to know.
Features of Company Registration in Estonia
The most popular form of company ownership in Estonia is the private limited company (OÜ). Maira Consult recommends it as the ideal choice for small and medium-sized businesses.
What are the main features of Estonian companies:
An Estonian OÜ must have at least one shareholder and one board member. The director must be a natural person but can be a resident of any country. A shareholder can be a natural or legal person; residency does not matter. For shareholders that are legal entities, properly executed incorporation documents must be provided.
Under certain conditions, an Estonian company must have a contact person in Estonia. This person receives and forwards the company's official correspondence but has no signing authority, no access to internet banking, and bears no responsibility for the company's activities.
The minimum size of an OÜ shareholder's stake can be 0.01 euros. The conditions and timing for contributing share capital are determined in accordance with the law and the company's incorporation documents.
Estonian companies must provide information about their ultimate beneficial owners. This is why the website of the Estonian Commercial Register contains the following data: country of residence, identification code, form of control, and full name.
Estonian companies are required to submit an annual report to the Commercial Register. For companies whose financial year coincides with the calendar year, the standard filing deadline is June 30 of the following year.
Estonian companies can obtain authorization to provide crypto-asset services in accordance with the requirements of the European MiCA regulation and current Estonian legislation.
If you are planning to open specifically an IT company in Estonia, read more about the specifics of its registration and operation in the article "How to Open an IT Company in Estonia: A Step-by-Step Guide".
What Taxes Exist in Estonia?
Foreign entrepreneurs who open a business in Estonia are subject to the same basic tax rules as local entrepreneurs. The main tax rates and taxation rules to keep in mind when doing business in Estonia:
corporate tax: 0% on undistributed profit;
corporate tax: 22/78 on distributed profit; the 22/78 rate has been in effect since January 1, 2025;
standard VAT rate: 24%.
A company can voluntarily register as a VAT payer, or it becomes obligated to do so upon reaching the taxable turnover threshold set by law. The threshold for mandatory VAT registration is 40,000 euros.
Estonia also applies special rules to certain transactions with non-residents registered in jurisdictions that do not cooperate on tax matters. The list of such jurisdictions is determined based on the relevant European Union list and may change.
For an Estonian company, tax consequences may arise, in particular, in the case of:
paying remuneration for services to a legal entity registered in a non-cooperative tax jurisdiction;
making certain payments not related to business activity;
receiving income from a legal entity that is controlled by an Estonian resident and registered in such a jurisdiction.
The specific tax consequences depend on the nature of the transaction, the counterparty's status, and other circumstances.
How to Open a Business in Estonia with Maira Consult?
Estonia has a well-developed legislative and digital infrastructure for doing business, so many administrative procedures can be carried out remotely. Moreover, the country offers every condition for a company's comfortable development. To open a business in Estonia you may need:
remote incorporation with the help of our lawyers through a power of attorney;
opening a bank account with Estonian financial institutions;
organizing administrative and accounting services;
registering a unique trademark;
support for company registration in Estonia for e-residents;
obtaining a VAT number;
conducting an audit;
obtaining the necessary licenses and permits for the relevant types of activity;
online or offline consultations as needed;
if needed, assistance with purchasing an already registered company in Estonia.
What Advantages Does an Entrepreneur Gain from Opening a Business in Estonia?
Foreign entrepreneurs gain many advantages if they decide to open a business in Estonia. The most attractive are:
access to the single European market and the ability to operate within the EU;
digitalization of state and administrative services and the ability to manage the company remotely;
the ability to open an account with a European bank or payment institution;
selling goods and services under a European brand;
a predictable tax system and no taxation of undistributed profit;
reliable protection of investments and business.
If you wish to open a business in Estonia and need additional consulting services, contact Maira Consult's specialists via our contacts.
