Today, Estonia has fully harmonized legislation with European standards, which makes doing business in the country very easy and profitable. A unique feature of the country is that its tax system was created from scratch, so this form of taxation cannot be found in any other EU country. For foreign entrepreneurs, this is a chance to quickly start a business in Europe along with obtaining an Estonian visa. Read the guide from Maira Consult on how to start a business in Estonia and what an entrepreneur needs to know.
Peculiarities of registering a company in Estonia
The most popular form of company ownership in Estonia is a limited liability company (OÜ). Maira Consult recommends it as an ideal choice for small and medium-sized businesses. What are the main features of Estonian companies:
- Estonian company must have a director and a shareholder. The director must be an individual, but can be a resident of any country. A shareholder can be an individual or a legal entity, residence does not matter. For shareholders of legal entities, the statutory documents must be properly registered.
- The owner of an Estonian company can have a contact person in the country. This is the company's administrator, whose responsibilities include sending correspondence to the management and forwarding phone calls. The contact person does not have the right to sign, does not have access to online banking, is not responsible for the company's activities and is not a full-time employee.
- The authorized capital of an Estonian company starts from EUR 0.01. It must be declared when starting a business in Estonia, but there are no payment requirements.
- Estonian companies must provide information about the beneficiary. That is why the website of the Estonian Commercial Register of Companies contains the following data: country of residence, identification code, form of control, surname and name.
- The country has mandatory financial reporting. Each year, an entrepreneur must submit a report to the Commercial Register no later than June 30.
- Estonian companies can obtain a license to work with cryptocurrencies.
What taxes exist in Estonia?
Foreign entrepreneurs starting a business in Estonia have a number of tax advantages over local entrepreneurs. Maira Consult experts have collected the most attractive taxes for entrepreneurs:
- Corporate income tax rate - 0% (provided there is no distribution of profits at the end of the reporting period);
- Profit tax rate - 20% (on distributed profits at the end of the reporting period);
- VAT rate - 22%.
Estonia also has the concept of a "low tax territory" or 1/3 rule. This applies to external jurisdictions where the tax rate is less than 1/3 of the corresponding rate in Estonia. When dealing with such jurisdictions, tax consequences for an Estonian company arise in the following cases:
- a company from a low-tax country is controlled by an Estonian resident;
- Estonian company makes payments for services to such a company;
- Estonian company purchases securities or shares in the authorized capital, receives a loan or credit from an enterprise registered in a low-tax jurisdiction.
It is also possible to obtain the status of a VAT payer in the country. To do this, the company owner needs to submit documents. This action is optional and depends on the turnover in the territory where the Estonian company operates.
It is necessary to obtain a VAT number if the turnover in Estonia exceeds 40,000 euros. In this case, the tax will be 22%.
How to start a business in Estonia with Maira Consult?
Moreover, the country has created all the conditions for comfortable development of the company. As Maira Consult's practice shows, in order to open a business in Estonia you may need:remote opening with the help of our lawyers through a power of attorney;
- opening a bank account in Estonian financial institutions;
- organization of administrative and accounting services;
- registration of a unique trademark;
- support of company registration in Estonia for e-residents;
- obtaining a VAT number;
- conducting an audit;
- obtaining all necessary licenses to allow the company to operate;
- online or offline consultations on request;
- if necessary, assistance in buying an already registered company in Estonia.
What benefits does an entrepreneur get from starting a business in Estonia?
Foreign entrepreneurs get many benefits if they decide to open a business in Estonia. Maira Consult has collected the most attractive ones:
- Having an account with a European bank;
- Selling goods and services under a European brand;
- importation of goods free of duty and VAT to the territory of most EU countries;
- the possibility of obtaining a residence permit in Estonia;
- reliable protection of investments and business.
If you want to start a business in Estonia and need additional consulting services from Maira Consult, contact the phone numbers listed on the website.
