Why Register a Company in Estonia

With Estonia, you get the best of both a digital-first ecosystem and a business-friendly country square in your corner. Think about a location where you can conduct your business totally online, without visiting the country. Sounds like a dream? In Estonia, it's a reality. Not only has the country dispensed with these antiquated procedures, but their e-Residency program is nothing less than a game changer: suddenly non-residents can tap into Estonia's business ecosystem and to at least some degree operate freely within the European Union market. Estonia has this combination of innovation and ease due to which it becomes a good choice for entrepreneurs worldwide.

What is E-residency and why does it matter?

E-Residency is a digital identity issued by the Estonian state that allows you to start and manage an EU company online from anywhere in the world. It is a gateway to an open digital nation. This enables you to sign documents, journalistic resources and even do taxes all online. It is not equivalent to citizenship or tax residency, but it opens a legal way of doing business in e-residency country (in our case Estonia) without having you present physically.

Entities that you can register

The Estonian Private Limited Company (OÜ) is the most frequent business form used in Estonia. It functions much like a US LLC and is the go-to for many business owners due to its flexibility and limited liability nature. Other examples are Public Limited Companies, Sole Proprietorships and General Partnerships etc. Each type has its own requirements and advantages, but OÜ is the typical choice for non-residents.

Applying for e-Residency is the basic to be made when registering a business in Estonia. The process is simple and can be done online. On approval of the application, you will receive here digital ID-card to get all e-service in Estonia.

For company name, the unique company called is required and should comply with Estonia naming regulations. You can even reserve the name online to secure it when you are ready to register this.

So now with your e-residency and selected company name you can move on to start registering the company in Estonian Business Register. This is a fully online process that only takes minutes.

It is compulsory for any Estonian company to have a registered address in Estonia. The place can be an address or the office offered by a service company.

It may not be required, but it is recommended that those with a company in Estonia open an Estonia bank account for ease of financial control. Over 10,000 e-Residents have taken advantage of this and chosen to get a remote business banking account with one the many fintech companies that offer them.

Your business is over €40,000 in revenue for the last 12 months… ok your registering for VAT now. It is also possible online, for example through the Estonian Tax and Customs Board.

Once you have all the formalities out of the way, it is time to do business in Estonia. Thanks to the state-of-the-art digital infrastructure, you can easily maintain it no matter whether your business includes providing services or selling goods.

Documents Required and Information Needed

How to open a company in Estonia

• A valid e-Residency card

• A company name

• Articles of association

• Shareholder details

• A legal address in Estonia

All of these documents can be filed online, which ensures that the process is a very quick and easy one.

Legal and Tax Considerations

In Estonia, business taxes are one of the lowest-rated were in tax-friendly countries. Only taxed 20% on distributed profit — no tax on reinvested profits. Estonia also has double taxation treaties with many countries, which is another factor that makes it attractive for foreign business owners.

Number one thing for you to do is open a Bank Account in Estonia (not an IBAN).

Traditional bank account — not easy to open for non resident in estonia but, there are option. Fintech companies that provide banking solutions (such as Wise and Payoneer) are great for getting company bank accounts when you can not be physically present in Estonia. When we asked our e-Residents which options they liked the most, these were by far the top choices for their convenience and global spread.

Typical Barriers and Solutions

Despite being a e-country, not all services are offered in English. But on the bright side, you can easily overcome this challenge by using translation tools or hiring a local service provider.

Despite being a e-country, not all services are offered in English. But on the bright side, you can easily overcome this challenge by using translation tools or hiring a local service provider.

To open a traditional bank account, you may need to travel to Estonia. This enables you to conduct your finances from afar, though by using a fintech solution.

What Comes Next After Registration

With your registration done, now is the time to work on expanding your business. Maybe it's getting a website built, marketing your services or you want to break into the European market. Estonia has a DP infrastructure but also, the most business friendly policies in the EU to scale your company super easy.

Case Study: Success Stories

One of those examples is Xolo, an Estonian company that assists freelancers and solopreneurs to run their businesses autonomously. Xolo was founded by an e-Resident which exemplifies the opportunity that Estonia presents to non-residents.