Skype, Hotmail and other entrepreneurs call Estonia their home. Why do so many companies choose Estonia to do their business? Estonia is a tiny country willing to open its gates to new business companies and they’re determined to create the best possible conditions for foreign entrepreneurs and investors.
Benefits of establishing a company in Estonia:
- Founding a company in this country carries many benefits, such as a 0% ("zero") corporate tax when you can reinvest profit in your company as a business owner, which is in itself beneficial.
- Other benefits include low bureaucracy, trouble-free VAT registration, and a much lower administrative burden, which for example, is one-fifth compared to the Czech Republic.
- Among other things, Estonia has the 12th best business conditions from around 190 countries worldwide and the Euro is used.
- Create your own s.r.o. (OÜ) in Estonia, which can also be a springboard for many businesses for Russia and Asia.
Are you a "small" or "medium" size entrepreneur? Is it worthwhile to start a company in Estonia?
Estonia doesn’t present itself as a "tax haven" and has no increased financial or administrative burdens on the founding companies in here. It isn’t necessary to have turnover in the order of tens of millions of crowns, so starting a business in this country is worthwhile. Beginner entrepreneurs with low turnovers are very welcome here, and they will certainly appreciate the zero profit taxation, which they can reinvest in the development of their company. Therefore, such a company can grow faster and make full use of its competitive advantage over others.
Estonia is the most advanced of the former Soviet republics, it’s very liberal and progressive.
- Only distribution tax needs to be paid (re-distributed profit tax), it’s the ideal jurisdiction for holding structures.
- No tax on profit or turnover is paid.
- Numbers don’t lie, numbers are reliant. And Estonian numbers reveal the sweet truth - tax conditions allow you to save a lot of money.
- Residential income tax of reallocated earnings is 21%. This means the following: if you earn $ 1,000 and shareholders receive $ 1,000, i.e. 100% of the profit, then it’s necessary to pay the tax. But if you re-invest the $ 1000, the business doesn’t have to pay a tax - ideal for investment companies.
- No withholding tax, all profits earned abroad are 100% tax exempt. So - if your business is not local and you earn money abroad, you can begin celebrating because you don’t pay any taxes while still owning a European company. What do you think about that?
- Minimal paperwork required which is a great bonus and saves you a lot of sleepless nights.
- Estonia is a member of the EU and has a public register of companies, which allows the opening a bank account in any bank.
- Estonia has concluded a large number of agreements to avoid double taxation.
- A talented workforce with good language skills and education. Estonia is ideal for small and medium-sized companies with up to 500 employees. It’s good to know that Estonia is also known for many software engineers.
- Great potential for new businesses and investment in the European market.
- It's also a great opportunity to run a business with a Russian market while still being in Europe. However, you just have to accept the fact that winter will also be similar to RussiaJ.
- In Estonia, you can do business financially even without physical presence, you can easily get e-resident - you just need to verify your identity and get fingerprints and biometric data at the border. In the near future, this process will also be possible for all Estonian embassies.
Today, many entrepreneurs are extremely busy and for most of them administration is one of the least popular activities. If you’re among them, we’ll arrange all the administration and much more for you. You can save both time and money.
If you’re interested in setting-up a company in Estonia, you’re in the ideal place. Fill in the form and we can get started right away.
Legal entity type: OU company
Establishment time: one week
Number of shareholders: at least 1, any nationality is possible
Shareholders: Members may be FO or business entities.
Registered capital: 2,500 EURO
Bearer shares: Not allowed
A registered address is mandatory but needn’t be physical
A company secretary is required
Directors: at least 1, maximum is not defined
Resident function of director: the director needn’t be resident in Estonia
Corporate tax 20% (paid as dividend tax).
Retail tax rate 20%
Dividends 0%, interest 20% (0% of EU deposits).
The national VAT rate is 20%, the reduced rate is 9%.
Agreements to avoid double taxation with different countries have been applied, determining the tax rates of dividends, interests and royalties.
Accounting: Accounting and preparing accounts is required
Audit isn’t required
Anonymity and privacy. Information on directors and shareholders is open in the Commercial Register.