Registration a company in Estonia

This small country has developed a remarkable investment climate and decent jurisdiction, which facilitates convenient and reliable management for both local and international business.

Company registration in Estonia

Registration of business in Estonia is a hot topic today.

This small state has developed a remarkable investment climate and decent jurisdiction, which facilitates convenient and reliable management for both local and international business.
The Estonian company is suitable for almost any type of activity.

Of course, the main factor that foreign investors pay attention to is the corporate tax rate, which is levied exclusively on the amount of distributed profit (when dividends are paid).

In addition, you receive a registered company in the European Union, which opens up new business opportunities for both small businesses and large international companies.

The advantages of registering a company in Estonia include the ability to register citizenship.

After 7 months of active work of the company, the investor can apply to the specialized state bodies of Estonia in order to obtain a residence permit.

The main advantages for establishing a company in Estonia are:

• Business registration takes place in Europe;
• The tax rate on undistributed profit of the company will be – 0%.
• A company in Estonia can be registered remotely (on the basis of a power of attorney).

There are two main types of companies that can be registered in Estonia:

1. The private limited company or LLP – OÜ / Osaühing.
Suites best for entrepreneurs of medium and small businesses. The number of shareholders is from 1 to 10.

• minimal authorized capital – 2500 €. It is possible to register a company and without the formation of authorized capital. If shareholders plan pay dividends, there is a need to make a mandatory deposit;
• legal address directly on the territory of the country;
• one founder is enough (residents, non-residents, individuals and legal entities);
• an annual accounting report, as well as an activity report;

2. Joint-stock company – AS/ Aktsiaselts.

• the authorized capital is formed during the registration of the company – not less than 25000 €;
• legal address directly on the territory of the country;
• one founder is enough (legal entities and individuals, residents and non-residents of the country);
• constituent documents –statute, memorandum of association;
• an annual accounting report, as well as an activity report.

Taxation in Estonia

The tax legislation of Estonia is very profitable and, what is very important, it is transparent.
As already mentioned above, Estonia levies corporate income tax on the company’s distributed profits (instead of the annual corporate tax). Undistributed profits are not taxed until profits are paid to shareholders.

The distribution of profits can be direct (for example, dividends, share buy-out or profit distribution by means of capital reduction) or hidden (including non-entrepreneurial expenses and payments, as well as gifts and donations).

For companies registered in Estonia, engaged in the supply of goods or the provision of services (with some exceptions), there is also an obligation to pay value added tax (VAT). The standard rate of VAT in Estonia is 20%, but there are also preferential rates of 9% and 0%.

A company registered in Estonia is a subject to compulsory registration by a VAT payer upon reaching an annual turnover of EUR 16 000 (from 2018 the turnover is increased to EUR 40 000).

By establishing your company in Estonia, you will receive a relatively inexpensive format of maintaining a fairly convenient business tool that does not obligate you to pay profit tax.

Every country has its own nuances and issues in the process of business registration, that only specialists can comprehend.

Provide SBSB your first and main stage in creating a business – the registration of a company.