Estonia has become an attractive destination for entrepreneurs and investors looking to start a business. The country’s digital advancements, ease of company formation, and favorable tax environment, particularly the Estonia VAT, make it an ideal location for establishing a new venture. In this guide, we will explore the process of company formation in Estonia, highlighting key aspects such as the e-Residency program, VAT registration, and various support services available to entrepreneurs.
Estonia: A Digital Haven for Entrepreneurs
Estonia is one of the most digitally advanced countries globally, with minimal bureaucracy, enabling entrepreneurs to sign documents online and manage their companies from anywhere in the world. The country’s e-Residency program empowers entrepreneurs worldwide to set up and run location-independent businesses. The program allows easy incorporation and company management and offers several benefits, including:
- 0% corporate tax on retained or reinvested profits
- A minimum share capital contribution of just €1
- Convenient regulations for accepting payments from clients worldwide
- Access to online services, including 95% of tax declarations filed online
- Affordable and accessible banking services, including online bank account opening
7 steps to start your company
The process of incorporating a company in Estonia can be completed in a few simple steps, either online or through a notary. Here’s a step-by-step guide to establishing a private limited company in Estonia:
1. Choose a Company Name
Select a unique name for your business and check its availability using the free tool on the e-Business Register https://ariregister.rik.ee/eng website.
2. Obtain a Legal Address
If you do not have an Estonian address, contact a business service provider [email protected] to obtain a legal address.
3. Register the Company Online
Register the company online at the company registration portal https://ariregister.rik.ee/eng. You can pay the state fee (€265) and share capital through the state portal when you submit your application or defer the share capital payment.
4. Receive Confirmation
Your submitted application will be reviewed in up to one working day, and any notifications will be sent by email.
5. Register Employees
If your company has employees, register them in the employment register on the Tax and Customs Board https://www.emta.ee/en/business-client/registration-business/employment-register website.
6. Acquire Necessary Licenses
If your business is subject to special requirements, obtain the required license(s). Information on the areas of activity and electronic registration can be found on the Register of Economic Activities https://www.rik.ee/en/e-business-registry/emtak-fields-activities website.
7. Register as a VAT Payer
If needed, register your company as a VAT payer on the Tax and Customs Board
Incorporating Through a Notary
In certain cases, you may need to register the company through a notary. This is necessary if:
- The contribution of the company’s share capital is not monetary, but rather a monetarily appreciable thing or proprietary right to be transferred to the private limited company (e.g., equipment, software).
- The founders of the company cannot digitally sign documents.