Estonian Company Registration. Onshore solution

Reasons to choose Estonian Companies

  • Estonian company registration has been made easy.
  • Member of the European Union.
  • Member of the European Monetary Union (currency – EUR).
  • English and Russian widely spoken.
  • Transparent and attractive tax system.
  • Quick incorporation process.
  • Easy to manage your business due to innovative e-solutions.
  • Pro-business government.

Reasons for Estonian Company Registration

  • 0% income tax on undistributed profits.
  • 20% income tax on distributed profits/dividends.
  • No withholding tax.
  • Perfect place for holding structures.
  • Company can be managed via internet (e-residency solutions).
  • Estonian Companies Registry is small-sized and efficient organization with advanced IT infrastructure and superb capabilities to administer companies.

ESTONIA. GENERAL OVERVIEW

Estonia is a member of the EU since 2004 and it joined the monetary union in 2011. With it’s pro-business government it has been one of the most successful countries among the former Eastern Bloc countries. The country has low public debt due to the sound fiscal policies. Economical ties are especially strong with Finland, Sweden and Germany.

Estonian e-services are one of the most innovative in the world and e-governing has decreased bureaucracy, as most of the public services can be reached online.

Estonia has an attractive business environment, which is represented by world-renowed companies being present in Estonia in different business sectors.

CORPORATE TAXES

Estonian companies pay corporate income tax, which is 20%, only on distributed profits. If profit is not distributed, but re-invested or kept untouched, there’s no income tax. The tax has to be paid in the following cases:

  • Profit has been distributed in the tax period.
  • Representation expenses, donations or business gifts have been made.
  • On payments which in character have no relations to business.

TYPE OF COMPANY

If you decide to go for Estonian company registration,  type of company most often used in Estonia is private limited company (OÜ).

A private limited companie’s share capital is divided into shares. Worth mentioning is that shareholders are not personally responsible for companies obligations, but the company itself with all it’s assets has all the liability.

Minimum share capital is 2500 EUR and minimal nominal value of a share is 1 EUR. A private limited company must have a management board, which is a representative and directive body of the company. It may have one or more members, who may and may not be shareholders of the company. In case the director and shareholder are not Estonian citizens, the company must have a representative with physical adress where the documents can be sent to. The owner will need to provide e-mail and foreign address to the registry as well.

Supervisory board, if stated in the Articles of Association, is optional and not demanded by the law. An auditor is mandatory in case the turnover, number of employees or asset value is reached.

ACCOUNTING

The Law on Accounting regulates basic accounting functions in businesses registered in Estonia. Accounting for taxes is regulated by different laws.

Financial year lasts 12 months and at the end of the year it is required to prepare an annual report that consists of the annual accounts and the management report. In case there is a wish to distribute profits, that has to be annexed to the report. Good news is that Estonian company registration can be deducted from the profits!

BANK ACCOUNT

Opening a bank account is easy, in case all required documents are provided. Each request is handled case by case, so no exact guidelines can be given.

To find out the latest innovations and business news about Estonia, check Estonian Investment Agency’s webpage. You’ll also find out that Estonian company registration can be done online by yourself, which is an initiative IBC Lab supports fully, but if you prefer to save your time, we’re here to assist you!