Company registration in Estonia
Estonia became a member of the European Union in 2004, but began bringing its legislation into line with EU standards back in 2000. At the same time, the Estonian tax system was created “from scratch” and, as a result, today there are no analogues to this system in the European Union. Registering a company in Estonia is an opportunity to quickly start a business in Europe. In addition, the company in Estonia allows you to quickly obtain an Estonian visa.
ESTONIAN COMPANIES. HOW BENEFITABLE IS THIS?
Registering a company in Estonia, especially in the form of a Limited Liability Partnership (OÜ), is suitable for small and medium-sized businesses. Such a company in Estonia has a classic structure - the company has a director and a shareholder. An Estonian company can only have an individual resident of any country as a director. But from the point of view of the possibilities of working with Estonian banks, when registering an Estonian company, it is preferable to use the services of a nominee service. An Estonian company has no restrictions on shareholders; they can be either an individual or a legal entity, a resident of any country. If the shareholder is a legal entity, in order to register as a shareholder of an Estonian company, the shareholder's statutory documents must be legalized in accordance with the requirements of Estonian legislation.
For those who want to quickly open a business in Estonia, the service of a contact person - the administrator of an Estonian company - is also common. The company's contact person in Estonia does not have the right to sign or access the Internet bank, but only receives and forwards correspondence to the company management and forwards telephone calls. In this case, the contact person is not responsible for the company’s activities in Estonia and is not a full-time employee of the Estonian company.
Advantages of an Estonian company.
An Estonian company is required to have a minimum authorized capital of at least 0.01 EUR; the authorized capital is only declared and there are no requirements for payment.
Estonian OÜ companies are required to maintain and submit monthly VAT reports to the Estonian Tax Department and an annual financial report to the Estonian Commercial Register. The financial year and reporting period of an Estonian company runs from January 1 to December 31.
The most important advantage of a company in Estonia is that since 2000, Estonia has introduced a 0% corporate income tax rate. A company in Estonia is entitled to a 0% tax rate in cases where the Estonian company does not distribute profits at the end of the reporting period, but reinvests the profits in its own business.
If the Estonian company had expenses not related to business activities or made payments for services in favor of an offshore company, the Estonian company will be required to pay an additional 20% tax on the payment amount.
Estonian legislation does not contain the concept of “offshore” and uses the term “territory with low tax rates”. Estonia has a 1/3 rule, according to which a jurisdiction is classified as a “low tax territory” if it has a tax rate lower than 1/3 of the corresponding tax rate in Estonia.
When working with such jurisdictions, tax consequences arise for an Estonian company in the following cases:
a company from a low-tax country is controlled by an Estonian resident
an Estonian company makes payments for services to such a company
an Estonian company acquires securities or shares in the authorized capital, receives a loan or loan from a company registered in a low-tax jurisdiction.
A company in Estonia has the right to obtain VAT payer status, but the need to obtain a VAT number is independently determined by the director of the company and depends on the turnover and territory in which the Estonian company operates. An Estonian company is required to obtain a VAT number only if its activities are carried out in Estonia and the EU, and its turnover in Estonia reaches 40,000 EUR. VAT rate is 22%, within the EU – 0%
Possibility of registering a company in Estonia.
Despite the fact that Estonia is a low-tax jurisdiction, this country has never been included in the “black lists” of international organizations, due to the presence of modern legislation in the field of combating money laundering.
Is it possible to open a company in Estonia remotely? Yes, of course, registering a company in Estonia is possible remotely, if you cannot visit Tallinn. If you want to remotely register a company in Estonia, you can issue a power of attorney in the name of our lawyer and we will help you quickly open an Estonian company, a bank account, organize administrative and accounting services. In addition, we will help you buy a ready-made company in Estonia in the shortest possible time. A ready-made company in Estonia with a bank account is an opportunity to quickly sign a contract and conclude a profitable deal.
What are the possibilities of using an Estonian company? A company in Estonia will open up opportunities for you: selling goods and services under a European brand, importing goods without customs duties and VAT into the territory of most EU countries, opening an account in an Estonian bank, the possibility of obtaining a residence permit in Estonia, as well as reliable protection of your investments and Your business.
Our company also provides a unique opportunity to support the registration of a company in Estonia for an e-resident.
From September 1, 2018, all Estonian companies are required to provide information about the beneficiary to the state register of companies.
Now, on the website of the Estonian commercial register of companies you can see the following data about the owners of Estonian companies:
Last name, first name
identification code
Country of residence
form of control
All information about the company's beneficiaries must be submitted by October 31, 2018.
If Estonian companies do not provide information about the true beneficiary of the company, a fine of up to 1,200 euros and up to 32,000 euros, respectively, may be applied to the member of the board of the partnership and/or the partnership itself.
It is not necessary to establish the beneficiary of an Estonian company in the following cases:
Companies that are listed on the stock exchange
Apartment associations
Companies that own buildings and certain target institutions.
Registration of an Estonian company allows you to work without problems not only with EU countries, but with Ukraine, as well as other CIS countries. Since Estonia is not included in the list of offshore countries, and since the country of registration of the Estonian company coincides with the country of registration of the servicing bank, the use of an Estonian company in a business scheme allows you to work without restrictions.
What other benefits does a company in Estonia have?
At the government level, it is allowed to obtain crypto licenses (licenses for cryptocurrency) for Estonian companies. For more information about obtaining a license, terms and conditions, read our publication - Crypto licenses in Estonia.
For more detailed information on how to properly start a business in Estonia, obtain a license for cryptocurrencies and obtain a residence permit in Estonia for 2 years, contact the MaIra Consult office for a free consultation.
