Starting a company - Business 101
Estonia is renowned for its business-friendly environment with a simple tax system and digital-first approach to government services.
Whether you wish to launch a startup, expand your corporation through a local branch, or work here as a freelancer, Estonia offers excellent opportunities and an efficient digital ecosystem.
Here are a few reasons why Estonia is an ideal place to do business:
- A company can be established in a day through a fast and straightforward registration process.
- The minimum share capital of a private limited liability company is 0.01 euros.
- Almost all reports and applications can be easily submitted online.
- Estonia's tax system is simple, with a 0% corporate income tax on undistributed profits.
- There are very few restrictions to foreign ownership or management and foreign entrepreneurs are treated equally to Estonian citizens.
- As an EU member state, Estonia provides access to the European single market and operates under the EU legal framework.
The following guide gives you a brief overview of the most important topics when conducting business in Estonia. For any specific inquiries, please contact our team of expert lawyers who are ready to assist you with any issues you may have or choose from the fixed packages here.
Starting a company
There are two ways to establish a company: 1) eletronically via the e-Business Register; or 2) in person through a notary. In both cases, it is wise to seek legal advice from an attorney.
To establish a company electronically, founders (and members of the management board) must have the ability to use a digital signature. Estonia accepts a certain kind of digital signature (qualified eletronic signature or QES), which requires either an Estonian ID-card (given to Estonian citizens and residents) or an e-Residency Digital ID-card (given to foreigners and non-residents). Despite its name, e-Residency Digital ID does not grant the right to reside in Estonia. Instead, it provides the opportunity to securely access Estonia's e-government services and to use a legally binding digital signature.
Establishing a company using e-Residency:
- Prerequisites: Becoming an Estonian e-resident. Learn more about how to become an e-resident here.
- Location: Anywhere around the world. However, the e-Residency Digital ID-card is handed over only in person at selected countries and locations. For more information, please see here.
- Time: After applying for e-Residency, the total time it takes to get the company operational is approximately 2 months:
- The decision to issue or refuse the e-Residency application is made within 30 calendar days.
- The delivery of the Digital ID-card to the selected location takes about 2-5 weeks.
- Application to establish a company is reviewed by the registrar within one working day.
- Associated costs: The associated costs to get the company operational are around 400 euros:
- A state fee for the review of the application for e-Residency is 150 euros.
- A state fee for the entry of your company into the business register is 265 euros.
State fees are not subject to VAT.
- Necessary documents: Your company needs a memorandum of association and articles of association. You may also be obligated to give certain confirmations or additional information as required by state authorities.
- Business banking: You generally do not need a local bank account to establish a company. Instead, you can use the services of payment institutions or fintechs (e.g. Wolt and Revolut). However, if you do wish to open a local bank account, be aware that depending on the bank, a personal visit to the bank may be required. In addition, banks may require actual ties to Estonia and/or a valid business plan for an e-resident to open an account. We recommend contacting banks in advance and finding a suitable one beforehand.
- Other obligations: It is obligatory to have an Estonian registration address or, alternatively, a contact person who resides in Estonia.
Certain business activities are also subject to licensing requirements.
Important note: Granting e-Residency is within the sole authority of the Estonian Police and Border Guard Board. E-residency is not a right and you cannot dispute their refusal.
If you do not have the option or simply do not want to become an e-resident, you can establish a company through a notary. You can do it yourself by visiting Estonia, but it is much more convenient to authorize a trustworthy individual in Estonia to establish the company and carry out the necessary procedures on your behalf. An appropriate person for this role is an attorney, a member of the Estonian Bar Assocication, who has the necessary legal knowledge as well as strict requirements for the protection of the clients’ interests. In the case of authorization, the key decisions would still be made by you, but the attorney would handle the process on your behalf and your physicial presence in Estonia is therefore not required.
Establishing a company with the help of an attorney:
- Prerequisites: notarised power-of-attorney
- Location: Anywhere around the world as there is usually no need to personally come to Estonia. In most cases the notarised power-of-attorney can be executed abroad and sent to us via regular post. Legalisation or apostille certification might also be necessary. For more information, please see here.
- Time: After receiving the notarised power-of-attorney, the total time it takes to get the company operational is approximately 3 weeks:
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- The documents can typically be translated to Estonian by a sworn translator within a week.
- An appointment with a notary can typically be arranged within a week.
- Application to establish a company is reviewed by the registrar within five working days.
- Associated cost: The associated costs to get the company operational are around 800 euros:
- Translation services by a sworn translator cost approximately 500 euros.
- The notary fee for notarizing the memorandum of association and articles of association is usually 21 euros (for an OÜ which has a share capital of 2500 euros and a single founder).
- The notary fee for submitting the application to the business register is 35.75 euros.
- A state fee for the entry of your company into the business register is 200 euros.
Translation and notary fees are subject to VAT (24%).
State fees are not subject to VAT.
- Necessary documents: Your company needs a memorandum of association and articles of association. You may also be obligated to give certain confirmations or additional information as required by state authorities.
- Business banking: You generally do not need a local bank account to establish a company. Instead, you can use the services of payment institutions or fintechs (e.g. Wolt and Revolut). However, if you do wish to open a local bank account, be aware that depending on the bank, a personal visit to the bank may be required. In addition, banks may require actual ties to Estonia and/or a valid business plan for an e-resident to open an account. We recommend contacting banks in advance and finding a suitable one beforehand.
- Other obligations: It is obligatory to have an Estonian registration address or, alternatively, a contact person who resides in Estonia.
Certain business activities are subject to licensing requirements.
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