Frequently Asked Questions about company formation in Estonia
Yes, of course. Estonia is a perfect place for foreigners to start a business since Estonian business strategy is based on a well-developed digital infrastructure and belief that almost everything can be done online with minimal funds and time waste.
A Limited Liability Partnership (Osaühing or OÜ) is the most common form of business in Estonia as its shareholders have no personal proprietary liability for the company’s obligations.
It is not mandatory to have a physical office within the country but it is mandatory to have a registered address and appoint a local contact person.
As of January 15, 2018, the Estonian Commercial Code stipulates that all companies that do not have a resident of the Republic of Estonia to sit on the Board of Directors must designate a contact person. The contact person can only be represented by a Notary Office, a Law Office, a Certified Audit Office or a company that has the necessary license to provide contact person services. The main function of a contact person is intermediary, aimed at providing a continuous channel of communication between government bodies and the Company’s Management.
For the limited liability company the minimum capital requirement is 2500 EUR but a company can be incorporated without depositing share capital if the proposed field of activity does not require it.
Corporate Income Tax:
0% — tax on retained earnings
20% — standard rate
14% — reduced rate is calculated as 14/86 from taxable net payment if dividend payments are regular
Corporate Income Tax is payable on distributed profits (e.g. dividends, fringe benefits, gifts, donations) and taxable expenses.
Value added tax (VAT) — 20% is applicable if a company is taxable, i.e. a VAT payer.
Tax on dividends — 25% dividends can be paid from the net profit.
If all the documents are in order the company incorporation process will take approximately 2-5 working days.
In Estonia it is called Osaühing or OÜ.
Yes, sure. Company set up in Estonia is fully remote and can be registered by power of attorney.