Estonia is a very favorable country for starting a business in the European Union. Estonia is a country where it is possible to start a business with minimal tax rates. It has belonged to the European Union since 2004. This country is not on the blacklist. That is why every year, the number of entrepreneurs that strive to open their business in Estonia is growing.
The main advantages of starting a company in Estonia
- the retained earnings of the company are not subject to any tax;
- there are no requirements to contribute the authorized capital when registering a company;
- the owner of the company can be a non-resident of Estonia, both an individual and a legal entity;
- the owner and manager of the company can be one person;
- there are no requirements for mandatory salary and employment of workers;
- ease of reporting and minimum filing requirements;
- you can purchase real estate and vehicles for the company;
- the possibility and efficiency of obtaining VAT, EORI numbers, the status of a tax resident of the European Union;
- lack of foreign exchange controls by the authorities;
- convenient remote Internet banking of Estonian banks.
Features of legislation
Local legislation does not imply the use of restrictions on the minimum and maximum amounts of capital when registering a company. The time for its formation is distributed in the range of a year or more. Within the declared amount of money, the founder of the organization will be held liable.
Company registration and service here are allowed by a board member, and there are no residency requirements. Estonia is capable of acquiring the features of an offshore zone when certain conditions are met. The country does not require a work permit unless it is for a Category D visa.
The management of the company does not predetermine the unconditional right to be present in the state or the territory of the Schengen zone. For this, an individual must open a visa of category “C”, based on which one can stay on the territory of Estonia within a year for 180 days. The purpose of the visit should be a business trip with a “business” mark.
Types of companies
Registration of companies of any organizational and legal form is possible in Estonia. However, for foreign investors, the most interesting companies can be of two types:
- limited liability company (OU);
- public joint-stock company (AS).
In practice, most companies are registered as limited liability companies. At the same time, the legislation allows the reorganization of a limited liability company into a public joint-stock company and vice versa.
When registering an LLC (OU), in which the only member of the board will be a non-resident, a contact person in Estonia is required to obtain the relevant documents from state authorities after the company is registered. Company registration, as a rule, takes no more than 7 days.
Registration of a new company takes place according to the following steps:
- Preparation of documents that indicate the necessary information (company name, types of activities of the company, legal address of the company, personal data of shareholders/managers), as well as the company’s charter;
- Opening a special bank account and depositing the authorized capital of the company to this account (in case of making a non-monetary contribution, an appropriate agreement is drawn up, but the bank account is not opened);
- Certification of the necessary documents by a notary;
- Submission of documents for registration of a company to the registration service.
For OU the minimum authorized capital is EUR 2,500, and for AS – EUR 25,000. When registering an OU, the direct actual contribution of the authorized capital is not mandatory. It can be paid later (but it is mandatory before the payment of dividends).
Requirements for the management/owners of the company
The minimum number of shareholders for both OU and AS is one. There are no restrictions on non-resident shareholders. The minimum number of directors (board members) is also one. Only individuals can be directors.
Half of the total number of directors (board members) must be residents of the EU or EEA countries. If this ratio is not observed, the company will appoint a contact person residing in Estonia who is authorized to receive documents and correspondence from government agencies.
Information about the directors (board members), along with the annual reporting data registered with the registrar, are freely available. Information about shareholders is also public. At the same time, information about the company’s beneficiaries (if they differ from its shareholders) is not disclosed.
Company bank account opening
In the case of depositing funds as authorized capital to a special account, such account can be activated after the registration of the company, which will enable the company to use it as a checking account.
As a rule, the procedure for opening a bank account in Estonia for a legal entity, whose beneficiary is a non-resident of Estonia, is longer than in the case of an Estonian beneficiary. Thus, for a company with a resident beneficiary, it takes one to two days to open an account, and for a company with a non-resident beneficiary, it may take 7-10 days to open an account.
An Estonian company has the right to open bank accounts abroad. Some banks can open bank accounts remotely.