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Estonia is an attractive location for company formation due to its business-friendly environment, simple and efficient online registration process, low corporate tax rate, and access to the European Union market. The country is also known for its advanced digital infrastructure, which allows businesses to operate online with ease. In addition, Estonia offers a competitive advantage with its e-Residency program, allowing entrepreneurs to establish and manage a company from anywhere in the world. Furthermore, the administrative and compliance requirements for companies in Estonia are straightforward, and the costs associated with maintaining a company are relatively low compared to other European countries. Overall, Estonia provides a favorable environment for businesses to start and grow, making it an attractive destination for entrepreneurs and investors alike.

We currently register private limited companies (OÜ) in Estonia for our clients. However, it’s always best to confirm directly with us as our services and offerings may change over time.

To start a company in Estonia, you must meet the following requirements:

• Proof of identity: You must provide your own identification, such as a residence permit, passport, or driver’s license.
• Proof of address: You must provide proof of your address in your country of residence, such as an internet bill, electricity bill, or bank statement. It is important that the document bears your name.
• Age: You must be at least 18 years old to start a company in Estonia.
• e-Residency: If you are a non-resident of Estonia, you must obtain an e-residency card to start a company. The e-residency program allows you to establish and manage a company online from anywhere in the world.
• Legal status: You must not have any legal restrictions that prevent you from starting a company in Estonia, such as being declared bankrupt or having been convicted of certain crimes.
• Brand name: You must have a brand name for your company.
• Business activity: You must have a legal business activity that you plan to engage in.
• Legal Address and Virtual Office: You need to have a legal address and virtual office in Estonia for your company. This can be provided by a service provider that offers both services.
• Contact person: You need to appoint a contact person who is a resident of Estonia. This person will be responsible for receiving official correspondence and legal notices on behalf of your company.
• Your business must be legal and allowed in Estonia.

elFounder is unable to provide services to individuals or entities as a result of the regulations outlined by Estonia’s legislation on the prevention of money laundering and terrorist financing.

• Politically exposed persons, their family members or close colleagues;
• Persons included in the international sanctions list (https://www.sanctionsmap.eu/#/main)
• Residents and citizens from the FATF high-risk countries
• Residents and citizens from the FATF monitored countries
• Residents and citizens of Russia and Belarus.

Starting from 2023, elFounder has implemented additional restrictions on providing services to citizens and residents of countries that have been deemed to have a higher risk of terrorism financing by the Estonian Financial Intelligence Unit. However, there are exceptions to this policy for individuals from Turkey and the United Arab Emirates.

Estonia has recently made changes to its company law, and as of 1 February 2023, the minimum share capital required to establish a private limited company (OÜ) has been reduced to €0.01.
This means that when incorporating an Estonian private limited company, you are no longer required to deposit the previous minimum share capital of €2,500. Instead, you can establish a company with a minimum share capital of just €0.01.

In general, the process of setting up a company in Estonia can be completed relatively quickly compared to other countries, and in some cases, it can be done within a few hours. For example, if the company is formed through the e-Residency program and all the necessary documentation is submitted correctly, the registration can be completed within a few hours. However, if there are any issues or errors in the documentation, it can take longer to resolve them and complete the registration process.

Estonian limited companies (or OÜ, “osaühing” in Estonian)  are subject to several taxes, including:

• Corporate Income Tax (CIT): Estonian limited companies are required to pay CIT on their worldwide profits. The current CIT rate in Estonia is 20%.
• Value-Added Tax (VAT): Limited companies registered for VAT in Estonia are required to collect and remit VAT on their taxable sales. The standard VAT rate in Estonia is 20%, but reduced rates may apply to certain goods and services.
• Social Tax: Estonian limited companies are required to pay social tax on the wages and other benefits paid to their employees. The current social tax rate in Estonia is 33%.
• Unemployment Insurance Tax: Estonian limited companies are required to pay unemployment insurance tax on the wages paid to their employees. The current unemployment insurance tax rate in Estonia is 1.6%.
• Land Tax: Estonian limited companies that own land are required to pay land tax on the value of their land. The land tax rate in Estonia varies depending on the location and intended use of the land.

It is important to note that tax laws and regulations are subject to change and may vary based on the specific circumstances of each company. Therefore, it is recommended that you consult with a qualified tax professional for advice on tax matters related to Estonian limited companies.

Estonian companies may incur annual costs related to the maintenance and compliance of the company. Some of the typical annual costs associated with Estonian companies include:

• Registered address, Virtual Office, and Contact Person: Estonian companies are required to have a registered address in Estonia. If the company does not have a physical office in Estonia, it may need to hire a registered address service provider. The annual cost of a registered address, Virtual Office, and Contact Person service can vary depending on the provider and the location of the address. The cost for this service can start from 299 euros/year.
• Accounting and Bookkeeping: Estonian companies are required to maintain proper accounting records and prepare annual financial statements. Companies may choose to hire an accounting and bookkeeping service provider to handle these tasks. The annual cost of this service can vary depending on the complexity of the company’s financial transactions. The cost for this service can start from 149 euros/month.
• Annual Report Filing: Estonian companies are required to file an annual report with the Estonian Business Register. The annual cost of this service can vary depending on the provider and the level of support required. The cost for this service can start from 199 euros/year.

It is important to note that the costs of these services may vary depending on the specific circumstances of each company and the service provider chosen. Additionally, other services may apply depending on the size and conditions of the company. Therefore, it is recommended that you consult with a qualified service provider for advice on the costs associated with maintaining an Estonian company.