How to open a company in Estonia
Estonia if not «ahead of the planet of all», then exactly in the vanguard of jurisdictions that provide their entrepreneurs with a comfortable environment for business registration, its competence; administration – tax and corporate, cooperation with public authorities and even the liquidation of the company in Estonia. According to the rating of assessment of business regulation Estonia occupies a worthy 18th place in the category «Ease of doing business» and 12 – in the category «Taxation». It is worth noting that it is well deserved.
Advantages of the company formation in Estonia
It is inexpensive. It is clear that everything in this world is relative. However, if you compare the cost of registration of a company in Estonia with any other European jurisdiction, Estonia simply has no competitors in this regard. Remote registration procedure. You can register a company without a personal visit to Tallinn, if you have an E-residency card or prepare a power of attorney and send it by courier service to the Republic of Estonia. Special tax system. The company does not pay corporate income tax unless it distributes it to shareholders. The company is really very easy to administer. You do not need to officially employ the director and pay his salary. Such requirements are not in Estonian legislation. No problem with getting VAT number. Do not need to immediately pay the authorized capital. No problems when communicating with the accountant. Estonians often speak English and Russian, in addition to Estonian. No “offshore” reputation. The company in Estonia – sounds solid. This is not an island state in the Indian Ocean. Wide range of agreements on avoidance of double taxation. This is rarely thought about when choosing a jurisdiction for the registration of the company. However, this will be useful once you decide to distribute profits as dividends.
Company structure in Estonia
Member of the Board (Director) of an Estonian company. The minimum number is 1. There are no residency requirements. Only an individual may be a member of the Board. At the legislative level, Estonia does not have a mandatory condition that the company is obliged to pay the director’s salary, as well as the contribution from this salary to the targeted state funds. This approach is very convenient if the founder and director of the company is a foreigner. The entrepreneur himself decides that it is more convenient/advantageous for him to pay his salary and, on this basis, to expect in the future a legal pension from the Republic of Estonia, or to direct this money to business development needs – working capital.
Company founder in Estonia. The minimum number is 1. There are no residency requirements. The founder may be a natural or legal person. Many of our customers have previously complained that when doing business through a foreign company, they are required to appoint a local citizen/resident as one of the company’s directors. We’re talking about companies in countries like Finland, Singapore, even Ukraine. In an Estonian company, the director (in Estonia – member of the board) and the founder (in Estonia – shareholder) may be a citizen and resident of any country. This opportunity has appeared in Estonia and has significantly improved business conditions for foreigners.
Rated service for an Estonian company
As a civil law country, Estonia has no legal regulation of the institution of nominal services. This means that the shareholder is considered to be the real beneficiary of the company. The same applies to the Director, who is fully responsible whether he is acting at his own discretion or on the instructions of third parties. Despite this, the possibility of involving nominal board members or founders exists and makes sense in a limited number of cases. Based on practice, the services of nominee board members and shareholders are not widely available in Estonia.
Authorized capital of an Estonian company
The minimum authorized capital of an Estonian company is EUR 2500. The minimum capital of the company is 0.01 Euro if the company has one shareholder. The minimum nominal value of the share/share is 0.01 EUR. When a company is registered in Estonia, shareholders are not obliged to pay the authorized capital with «living money». Simply declare the amount of capital. There are cases where the authorized capital must be paid, for for example, companies providing services in the sphere of cryptocurrency circulation, but this does not apply to the usual cases for business that does not require regulation. There is a minimum capital requirement of 2500 euros. It is important not to forget: even though the authorized capital is paid, the shareholders are responsible within their shares in the company. It should also be noted that the authorised capital of an Estonian company must be paid in full at the time of distribution of the profit to the shareholders as dividends.
How to open a company in Estonia via the Internet?
What it takes to do that. The most common method of remote registration is to open a company in Estonia with an electronic resident card. It will take 4 to 6 weeks from the date of submission of the application and provision of the necessary documents to receive the e-resident card. Declaration of the beneficiary in this case is carried out remotely, without the need to make additional documents. The pros and cons. Pros: no need to get up from the sofa; the most “budget” option compared to others; the E-resident card will allow in the future to manage the company in the most convenient way for you. Cons: Electronic resident card should be ready, otherwise – its production will take about one month. Pitfalls. The Estonian Police and Border Guard Department can ask clarifying questions on the application for the E-resident card. Such requests must be answered competently and in fact, in order not to receive a refusal to issue an E-resident card.
How to open a company in Estonia through a power of attorney?
What it takes to do that. The faster way, which does not require a personal visit of the founder to Estonia, is to register the company in Estonia under a notarized power of attorney. If a power of attorney is issued in Ukraine, such power of attorney does not require apostille, because agreements on mutual legal assistance have been concluded between the countries. This option is more costly than the first. Pros and cons. Pros: the speed of opening a company in Estonia. Cons: Costs of making a power of attorney and its shipment to Tallinn; extra hassle in making documents for declaring the beneficiary after the company is established; to carry out any further actions regarding the company (for example, changing a board member or legal address) will require a new power of attorney. Pitfalls. The power of attorney should be carefully checked before sending to Estonia. The slightest mistake can lead to a refusal to register the company. It is also worth checking whether the Apostille is needed in your country, if the document is prepared for submission in Estonia.
How long before the firm is registered?
The registration period of the company with the help of the electronic resident card is 1-2 business days. The period of registration of the company in Estonia under the power of attorney is 5-7 working days from the moment of delivery of the original power of attorney to Estonia. Registration of the company in Tallinn with a personal visit will take you a couple of days.
Prices for company registration in Estonia
The cost of registration in Estonia starts from 900 Euros, depending on the amount of services you need. Factors such as need to translate the statute from Estonian into English by sworn translator, apostille of documents excerpts and statutes, getting a vat number for an Estonian company and company registration procedure by proxy or using the e-resident card.
Necessary documents and information for the company’s registration in Estonia
To start the registration procedure of an Estonian company, we need to obtain the following data and documents:
· Several variants of the name of the future company. They would be quickly checked in the register;
· Scanned passport of each director and shareholder;
· E-mail company;
· Personal e-mail of each director and shareholder;
· Telephone number for communication;
· Description of the activities of the future company;
· The size of the authorized capital. Minimum size – 2500 Euro;
· Address of the actual residence of each director and shareholder in Latin letters;
· Scan or photo of the electronic resident card.
On the basis of the received data and documents, we will prepare everything necessary for the registration of the company and you will only have to do two steps: follow the link in the letter, and then – to sign the document with the help of the e-resident card.
Language of Estonian company documents to be issued
The language of corporate documentation in Estonia is Estonian and English. The charter of your Estonian company will be prepared in Estonian. If necessary, it can be translated into English or another language using the services of a sworn translator in Estonia. An extract from the register may be in Estonian or immediately in English. The extract from the Estonian Company Register can be downloaded online through the Estonian Company Register website. Unloading full extracts on Estonian companies is a paid service (several Euros).