Company registration in Estonia
Company registration in Estonia

Since its independence from the Soviet Union in 1991, Estonia has climbed the economic ladder and established itself as one of the most favorable corporate jurisdictions in Eastern Europe.  Relatively low taxation and one of the world’s freest business and trade environments accompanied by a reputation of transparency and integrity make Estonia an attractive jurisdiction for a European business company.  Organization for Economic Cooperation and Development (OECD) lists Estonia as one of its leading members due to its competitive tax codes.  Estonia offers a corporate tax rate of 20% on distributed profits, which means that taxes are imposed on profits only and not on monthly or annual earnings.  This flexibility allows corporations to decide when to pay taxes by deciding the time of profit distribution in the company or alternatively benefit from tax exemption if reinvesting the company’s profits whilst growing the business.  



  • No taxation on reinvested profits. Income tax is applicable only on distributed profits or profits deemed to be distributed
  • Digitalized public services
  • A reduced corporate income tax rate of 14% is applicable for regular dividend distributions.
  • 20% tax on individual income (not applicable in case of distributed dividends already taxed under the corporate income tax)
  • Property tax is only applicable to land and not to buildings
  • No property transfer tax
  • No inheritance, gift or wealth tax
  • The territorial tax system allows exemptions of taxation on foreign income
  • 10% withholding tax applicable to royalties paid to residents (unless the rate is reduced, or a complete exemption is given under an applicable tax treaty)
  • 10% withholding tax imposed on technical services carried out within Estonia
  • Residents are taxed on the income earned worldwide while non-residents are taxed on the income earned in the country only
  • Tax deductions of up to EUR 6,000 depending on the individual’s total qualifying income
  • EU VAT registration simplifies EU trading (triangular trade)
  • No import restrictions on goods (some goods may require special importation permission from the relevant authorities)
  • All custom clearance procedures are done electronically
  • Three free trade zones where no tax or VAT is charged if goods are in transit and intended for re-export
  • Double tax treaties with over 50 countries worldwide
  • No public registry of directors or shareholders
  • Individuals holding a residence permit in Estonia are allowed to work in the country without the need to acquire an additional employment permit

  • Relatively high corporate income tax rate of 20% 
  • High labor tax of 39.9 %
  • 20% Capital gains tax
  • 20% VAT
  • Due to the specifics of the tax regime, dividend distribution should be handled with utmost caution
  • Due to major financial scandals, Estonian banks and legal entities have a very damaging reputation, which makes bank account opening for an Estonian entity near impossible outside of Estonia, what’s more, any transactions to or from Estonian bank accounts risk being blocked or unaccepted by reputable financial institutions worldwide. 
  • Company documentation and annual reporting is in Estonian language
  • Domestic market opportunities are limited due to small size of population, lack of high tourism flow and low purchasing capability of local citizens

Estonia is well-known as a frontrunner for e-government solutions and cyber security, hosting high profile internet security centers such as NATO and the IT agency of the European Union.  It is also the first country in the world that offers e-residency: a virtual and fully electronic identification process that can provide you with an electronic ID that allows you to digitally manage your Estonian business and legally sign documents electronically within the European Union.   The program allows corporations to base and manage their business and finance in the country.    An Estonian e-resident has access to the country’s advanced digital infrastructure and can form a company, open accounts in a growing number of European financial institutions, make and accept payments on various online platforms and file taxes electronically.  Moreover, a start-up formed through e-residency is taxable under Estonian tax laws.

Estonia is also a very attractive country when it comes to property investment due to the flexibility of its property tax regulations.  It is one of the only 3 countries in OECD with a properly defined property tax system.  Under this system, only the land is taxable, and no taxes are imposed on the building or structure of the land. 

Corporate Features of an Estonian Private Limited Liability Company (Osaühing)



Incorporation Time

2 – 5 Business Days

Local Registered Agent Required


Local Registered Address Required


Migration of Domicile Permitted



Minimum Share Capital

EUR 2500 (For certain business activities like insurance and banking higher share capital requirements may be applicable)

Minimum Paid Up

No Minimum if company share capital is less than €25,000.                                                                                                   

NOTE:  A company is not permitted to distribute profits if its share capital is not paid up

Maximum Share Capital

No Maximum

Bearer Shares Allowed



Minimum number


Maximum number

No Maximum

Publicly accessible records


Corporate shareholder allowed


Annual General Meeting Required



Minimum Number


Maximum Number

No Maximum

Local required

No but strongly recommended (If more than half of the Board of Directors are not Estonian residents, the company must appoint a local representative)

Publicly accessible records


Corporate directorship allowed



Secretary Required


Local Secretary Required


Other Officials Required



Requirement to Prepare


Requirements to File Accounts


Audit Required

Please see Note* below


Government Renewal Fee


Annual Return/Report

Yes (Please see Note* below)

Tax Return


Submission of Economic Substance Report


Note*  All Estonian companies must submit an annual report in accordance with the Estonian Generally Accepted Accounting Principles (GAAP) or the International Reporting Standards (IFRS) at the Commercial Register within six months after the end of the financial year.  If the standard financial year (which starts on 1st January and ends on 31st December) is followed then the last date for annual report submission is 30th June without penalty.

The report should consist of annual accounts and the management report, however the requirements for these reports depend on the size and turnover of the company.  For financial reporting purposes, Estonian companies are classified under three categories as follows:




All the Following Criteria is met:

Exceeds the limits of two of the following three criteria:

Exceeds the limits of two of the following criteria:

  • Total revenue does not exceed EUR 50,000 
  • Total assets do not exceed EUR 175,000
  • Total liabilities do not exceed total equities 
  • One shareholder who is also member of the Board of Directors
  • Total annual revenue of EUR 1,600,00
  • Total assets of EUR 800,000
  • 24 employees


Exceeds the limits of one of the following criteria:

  • Total annual revenue of EUR 4,800,000 
  • Total assets of EUR 2,400,000
  • 72 employees
  • Total annual revenue of EUR 4,000,000 
  • Total assets of EUR 2,000,000
  • 50 employees


Exceeds the limits of one of the following criteria:

  • Total annual revenue of EUR 12,000,000 
  • Total assets of EUR 6,000,000
  • 180 employees

Annual Report Requirements:

balance sheet and an income statement

Management Report and full financial statements reviewed by an auditor

Management Report and audited financial statements 

For further information on taxation in Estonia and establishing a company in the country, feel free to contact us.  Our highly professional team can provide full guidance and can help you set up a corporate business in the country without your presence, assist you with your bank account opening, substance requirements and take on the administration and management of your company.  With the help of our trained staff, you will be guided through the whole process and will be guaranteed reliability and honesty.  

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  • 2Submit documents
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