Electronic Residency and Low Taxes: Company Incorporation in Estonia

Estonia is one of the most popular companies in incorporation jurisdictions. As an EU member, Estonia has a…

Estonia is one of the most popular companies in incorporation jurisdictions. As an EU member, Estonia has a number of privileges, attracting many businessmen. If you intend to operate in the European market, our advice is to consider the country.

Estonia boasts an excellent investment climate and favorable conditions contributing to doing business conveniently and reliably, both domestically and internationally. This article offers a detailed overview of the advantages and terms of setting up a business in Estonia.

Who needs to register a company in Estonia?

One of the jurisdiction’s key advantages is that it is universally suitable for practically any type of operations.

Why register a company in Estonia: key reasons

Estonia is a member of the European Union and offers excellent conditions for foreign investors. We have highlighted the main reasons for setting up a business in Estonia:

  • Low taxes: undistributed profits are not subject to tax
  • Quick and easy incorporation: there are two ways to register an Estonian company: via the e-residence or using a power of attorney. Companies are incorporated and appear on the commercial registry of Estonia within one week. There is no requirement to contribute the authorized capital at the time of registration. For local LLCs (OÜ) it starts at EUR 2500
  • VAT number: if your Estonian company does not exceed an amount of EUR 40,000 in annual turnovers, there is no need to register as a VAT payer. If you do get a VAT number, you can reduce the tax on sales
  • Reporting: as per the standard EU practice, companies must register and provide annual statements to the regulators. Annual audits are mandatory for large companies
  • Double taxation treaties signed by Estonia: those can help reduce the tax rate in the country of income source
  • Effective investments in Estonia: the country treats foreign investors the same way as its local
  • Digitalization in Estonia: advanced digitalization is offered here, including the taxation and financial systems. Anyone can obtain the e-residence (an Estonian variant of the electronic signature). All accounts and tax returns are submitted electronically.

Estonia is considered appealing by multiple overseas investors and well-known major companies like Ericsson, ABB, Kuehne + Nagel, Stora Enso, Symantec, Stoneridge, Vopak EOS, Deutsche Post DHL, and many more.

SBSB lawyers are highly experienced in registering companies, in Estonia and beyond. We will help you pick a jurisdiction perfect for your project. Join our Telegram chat for a free online consultation.

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