Estonia

Key benefits

Estonia is one of three Baltic States located on the east coast of the Baltic Sea. Estonia is a democratic republic with the largest city being the capital Tallinn.

Estonia joined the European Union in 2004 which subsequently lead to an increase in foreign investment. Prior to the global recession in 2008-096 Estonia had one of the fastest growing economies in the EU however since the recession the economy has contracted. Regardless of this fact Estonia is still a very sound proposition and a good platform for emerging new growth. Estonia has seen an increase in GDP since 2010 with an increase in of 3.3% in 2011.

Historically Estonia’s trade was tied to the Eastern Europe however since becoming an EU member and due to the fact that Estonia has a very liberal business agenda with little bureaucracy, it has refocused its trade from East to West and turned itself into a vital trading link between the CIS, Russian and Western Europe.

Key benefits of Estonia:

  • Good geographical links with excellent links to both Eastern and Western Europe
  • Stable political environment with EU and NATO membership
  • Estonia’s openness to business has been globally recognized. The Heritage Foundation ranked Estonia 14th in their Economic Freedom Index of 2011. The World Bank ranked Estonia 17th in its ‘Doing Business 2011’ report.
  • OECD member
  • Liberal, western business culture with English and Russian widely spoken
  • Existing links with Russian and CIS markets and Western Europe enable companies to trade easily
  • Highly developed banking system with most Estonian Banks being run by Swedish, Norwegian or Finnish banking institutions.
  • Relatively low corporate tax rate of 22%
  • A young, well educated, innovative and competitive labour force
  • Estonia ranks highly with regards to economic freedom, democracy, press freedom, political freedom and education.

Estonia provides the perfect climate in which to incorporate a company. Please contact us if you require our Estonia Fact Sheet and Fee Schedule.

Tax and accounting regulations

Summary of Requirements for an OU, Limited Liability Company:

General Information
Type of CompanyOsauhing (OU), Limited Liability Company
Timescale to incorporate3 weeks
Corporate Taxation20% on distributed profits and dividends. However the tax system in Estonia does not require payment of Corporate Tax for undistributed profits – something which is unique to Estonia
Double Tax Treaty Access:Yes
Directors
Minimum No. Required1, Corporate Directors are permitted
Local Director RequiredNo
Publicly accessible informationNo
Location of MeetingsAnywhere
Additional InformationA private limited company must have a management board which represents and directs the company. This may include 1 member (the director) or several members. If more than half the members are not Estonian residents then an address in Estonia must be provided where documents can be sent (the Registered Office Address can be used).
Shareholders
Minimum No. Required1, 100% foreign shareholders allowed
Publicly accessible informationNo
Location of MeetingsAnywhere
Company Secretary
RequiredNo
Local Secretary RequiredN/A
Registered Office RequiredN/A
Share Capital
Standard CurrencyEuro
Standard Authorised€2,500.00
Minimum Paid Up CapitalNot required
Additional InformationIf share capital exceeds €25,500.00 an OU must have a supervisory board with 3 members
Accounting & Compliance
Requirements to prepare AccountsYes
Requirement for AuditAudit required if share capital exceeds €25,500.00.Audit required if any of the following are exceeded: Turnover exceeds €2 million, Total assets exceed €1 million, Number of employees exceeds 30
Local Auditor RequiredYes, if audit is required
Requirement to File AccountsYes
Requirement to file Annual ReturnYes
Additional Information
VAT20%. Any business with a turnover in excess of €15,000.00 is obliged to register with the VAT Authorities
Bank Account OpeningA number of international banks are located in Estonia and account opening is possible without presence.

 

Procedure of company registration

The procedure of OU company formation in Estonia is quite straightforward.

We require the following in order to proceed:

  • Completed application form
  • A certified copy of each director and shareholder passport
  • Two utility bills that are under 3 months old

Upon receipt of the above the following is completed:

  • Company name approval
  • Submittal of the application to the Commercial Register

Within approximately 10-15 working days the company will be registered