Estonia Company Formation

Opening a company in Estonia

Why open a company in Estonia? What are the advantages in the country of Estonia?
Estonia, a country that is part of the European Union, is a convenient solution for many entrepreneurs.

The country is part of the Baltic States, on the shore of the Baltic Sea, and the capital of the country is Tallinn.

Since the country is part of the European Union, the local currency is the Euro (EUR).

In Estonia there are cheap maintenance costs and a local market that understands the English language very well.

Estonia has a unique taxation advantage: the business owner who wants to open a company in Estonia will be happy to know that the company taxation in the state of Estonia is one of the most convenient in the world. In the state of Estonia the company does not have to pay corporate tax as long as it does not spend the profits outside the company. In other words, as long as the profits remain within the company and are not distributed to the owners as a dividend, and as long as the company does not use the profits to purchase things that the company does not need (such as a car or an apartment for the owners, etc.), there will be no need to pay corporate tax on those profits!

A company in Estonia with a crypto license
In recent years, Estonia has served as a place to open international companies that provide services to all European countries, in the field of crypto.

Estonia was the first country in Europe to adopt legislation regulating crypto activities in the country. It should be known that in principle the state allows issuing licenses in crypto trade, crypto exchanges, crypto/foreign exchange conversion services and more, but today the requirements for a crypto license in Estonia are very high, especially in the context of the costs for issuing the license and the required equity capital. For a crypto license it is necessary to deposit an equity capital of 125,000 euros, as well as local set-up costs of about 60-80,000 additional euros.

The process of opening a company in Estonia
Opening a company in Estonia begins with the signing of a notarial power of attorney to open a company by a local agent on our behalf. The document is then sent by courier and the company is established.

In Estonia there is no need for a local director or a local shareholder.

In Estonia you also do not need any European citizenship to open a company. You can open an Estonian company even if you are a foreign citizen.

This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.

As part of the process, a bank account will be opened.

After opening the bank account , the company is opened and a "certificate of registration" (certificate of incorporation) is issued.

Equity Requirements
Previously, a minimum equity deposit of 2,500 euros was required to open a company. On February 23, this requirement was abolished and currently the required equity is only 1 cent.

Opening a bank account in Estonia
As part of the company opening process in Estonia, it is required to open a bank account to deposit the equity. Since this is a European country, more or less starting in 2018, those who want to open a bank account are required to come to the country. However there are some alternatives. One of them is to appoint a local director, who can open the account. After opening the company, the director will resign and change the signatories on the account to the foreign owner. Another alternative is to open an internet bank account. Indeed, similar to our "Zero One" bank, there are Internet banks in Europe that would be happy to accept your company in Estonia as a customer.

After opening the company, the bank account opened for the purpose of depositing the equity can be turned into a current bank account for the company.

VAT registration
After the opening of the company, at the same time as the opening of the current bank account for the company, the registration of the new company with VAT will also be carried out. The company will receive a VAT number and can start trading.

It should be noted that if the company has not reached a turnover of 16,000 euros per year, there is no obligation to register for VAT. On the other hand, if the company is not registered for VAT, it cannot deduct business expenses.

EORI number
If you need to, we can obtain an EORI number for you so that you can import or export with the company within Europe.

EORI is an abbreviation of Economic Operators Registration and Identification number.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.

However, all costs in Estonia are low due to the relatively cheap cost of living.

Tax in Estonia
The company tax in Estonia is at a low rate of 19%.

For sales to the local Estonian market, the VAT is 20%.

However, as stated above, as long as the profits remain within the company and are not distributed to the owners as a dividend, and as long as the company does not use the profits to purchase things that the company does not need (such as a car or an apartment for the owners, etc.), there will be no need to pay corporate tax on those profits!

Questions and answers
Question: Is it necessary to physically fly to Estonia to open a company in Estonia?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Estonia. There is no need to fly to Estonia to open the company, and in most cases not even the company's bank account. The entire process of opening the company and the company's bank account is carried out remotely without stepping on Estonian soil.

Question: Who provides the local address for the company in New Estonia?
Answer: We will provide the local address.

Question: How can I find a good accountant who can take care of the company in our new Estonia?
Answer: We will connect you with a local accountant.

Question: If I want to come to Estonia to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you don't just walk around the city in order to find which branch will accept you and open a bank account for a company in your new Estonia.

Question: What type of company in Estonia should I open?
Answer: There is only one type of company in Estonia called BBA.

Question: Do you need a European passport to open a company in Estonia?
Answer: There is no need for a European passport. We can open a company in Estonia for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in Estonia?
Answer: The process of opening the company, including signing the power of attorney and sending it, should take about 1-2 weeks, depending on the readiness of the banks to accept the new company as a client. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in Estonia for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in Estonia for a person with American citizenship or a person living in the USA.

Question: How much does it cost to open a company in Estonia?
Answer: Click here to contact us and get an up-to-date quote for free!