Opening of the company in Estonia

Business registration in Estonia: GLS Law Company services

Estonia is a small country in Northern Europe that is attracting increasing attention from various entrepreneurs. The state is valued for its actively developing economy, favorable tax system, and convenient business management through various online portals. If you are interested in company registration, Estonia is part of the European Union, giving you access to one of the largest markets in the world.

Why we recommend opening a company in Estonia

Doing business in Estonia has a number of advantages for entrepreneurs:

• The state has a multifunctional and modern electronic system, making the registration and business management processes simple and efficient.
• There is a simplified system for small and medium-sized enterprises, featuring simpler rules and procedures for easy and efficient business management.
• The country has a low level of corruption.
• The tax on undistributed profits is 0%.
• While the favorable tax conditions may make Estonia seem like an offshore zone, it is not an offshore jurisdiction and is not listed in any blacklists.
• Opening a company in Estonia grants the entrepreneur the right to obtain a work visa and a residence permit.
• After registering a company, businessmen can remotely open accounts in local banks, provided they have Estonian partners or other ties to the country.

Company registration in Estonia: main information

Typically, a limited liability company (similar to LLC) is opened in Estonia. This is the most common legal form, offering entrepreneurs many opportunities for conducting business.

Company registration in Estonia involves the following conditions:

• The minimum share capital is from 1 euro, which must be contributed at the business opening stage.
• To open a company in Estonia, there must be at least one shareholder (individual or legal entity), with both Estonians and foreigners allowed.
• At least one board member (individual) is required, with no residency requirements.
• There is no need for a company secretary.
• If the director is not Estonian, then a local contact person is required.
• The company name and address, the amount of share capital, and information about the board members and shareholders are publicly available.
• Financial reports must be prepared and submitted annually to the regulatory authorities.
• Audits may be required in some cases; consult our experts for more details.

Company registration services in Estonia: taxation features

Entrepreneurs can qualify for attractive tax benefits and conditions if certain conditions are met. Registering a company in Estonia is necessary for the following reasons:

• If profits are not distributed, the respective tax for legal entities is 0%. Otherwise, a rate of 20% applies.
• A company registered as a VAT payer is subject to taxation, with a standard rate of 20% and a reduced rate of 9%.
• Registering a company in Estonia allows businessmen to avoid capital gains tax, as it is considered part of the organization’s income and is only taxed upon profit distribution.
• A stamp duty is applied only to transactions involving real estate.
• Opening a company in Estonia involves a land tax and social security contributions, which may vary, so consult GLS Law Company specialists for personalized advice.
• The personal income tax rate is 21%.

Company registration in Estonia and VAT number

If a company’s taxable turnover exceeds 40,000 euros from the beginning of the calendar year, it must register as a VAT payer. This procedure involves voluntarily obtaining a VAT number after company registration in Estonia. The applicant must submit an application and any of the following documents:

• A detailed business plan.
• A contractual basis with prospective counterparties.
• A bank statement with transactions between the entrepreneur and their partners.

A website link can also be provided, listing all the services and products offered by the company.

How to open a company in Estonia: GLS Law Company services

Submit an application on our website if you plan to open a company in Estonia. We offer comprehensive services at attractive prices, including legal consultations, document preparation, support at all stages, etc. You can also contact GLS Law Company experts by phone.