Estonia

General Information

Area – 45,228 sq. km

Population – 1,340,000 people

Capital – Tallinn

Official language – Estonian

Official currency – Euro (EUR)  

Key Aspects

A special permission is required to perform banking, insurance and trust activity. Net income reinvested in a company is not subject to the corporate tax. At the end of a year a company has income – in Latvia the corporate tax is levied on it at all accounts regardless of the fact whether or not a company pays out dividends or reinvests them in the company. However, in Estonia income is not subject to taxation if a company invests this money into the development of a company. In Estonia, income is subject to taxation only if the shareholder pays out dividends to itself.

Company Type

The most common legal form of a company in Estonia is a Limited Liability Company (OU).

Corporate Legislation

Commercial Code (March 2008)

Main Requirements for Company Directors and Shareholders

There should be at least one director.

Directors may be residents of any country. Directors may be both a natural person and a legal entity.

There should be at least one shareholder in a company.

Shareholders may be a resident of any country.

Shareholders may be both a natural person and a legal entity.

Nominee shareholders and directors are allowed to be used.

Authorised Capital

The authorised capital of a company in Estonia is EUR 2,500

Accounting

Accounting records must be maintained on a monthly basis.

Annual accounts are filed once a year (paid for separately).

The cost of accounting starts at EUR 200 per month (up to 25 transactions).

Taxation

In Estonia, there is no corporate tax as such. Payments are calculated on the basis of the net income amount when distributing dividends. 25 % is paid on this amount. The VAT rate for companies not exempted from the payment thereof is 20 %. If goods are sold outside the euro area, the tax should not be paid.

Questions that need to be answered to prepare incorporation documents

• Passport details of the founders
• Passport details of the directors
• Photocopy of the ID pages of the founders’ and director’s international passports
• Types of the firm’s activity
• Utility Bill of the directors and founders, current email addresses and phone numbers
• Several preferable firm names