Opening a company in Estonia
The Estonian economy has boomed in recent years and has pursued a liberal business agenda in preparation for EU accession in 2004. Foreign investment has flooded this small Baltic state, creating a relatively relaxed environment for the international business community. However, Estonia is still developing, and investors considering opening an Estonian company must tread carefully. It is especially important to seek highly specialized legal, financial, and tax advice. Our network of local consultants has been carefully selected, so you can contact us for assistance with any questions regarding company registration in Estonia.
What are the main types of companies in Estonia?
In Estonia there are two main types of companies:
- Joint-stock company – aktsiaselts (AS)
- Limited Liability Company (OÜ)
How much share capital is required to establish a joint stock company?
The minimum share capital for an AS is EEK 400,000 (€25,500).
What other requirements are needed for an AS?
- at least half of the members of the board of directors must be residents of Estonia
- accounting review is necessary
- a local office is recommended
How much share capital is required to establish an OÜ?
The minimum share capital for an AS is EEK 40,000 (€2,550).
What other requirements are needed for an OÜ?
- Audited accounts are required if the share capital exceeds EEK 400,000 (€25,500)
- at least half of the members of the board of directors must be residents of Estonia
- a local office is recommended
What other types of companies exist in Estonia?
- General partnership (TU) – No minimum capital or accounting reporting requirements, all partners separately liable
- Limited partnership (UU) – similar to TU but distinguishes between general and limited partners
- Sole Shareholder (FIE) – no capital required or accounting reporting obligations
Why invest in Estonia?
Is it easy to hire staff in Estonia?
The recruitment industry in Estonia has seen slow development. Many Estonian companies use the official state employment agency to find staff. However, a number of private sector employment agencies have emerged, and Estonian “headhunters” are avid readers of advertisements in the local press. Estonia has a well-educated and qualified workforce and very low wage costs compared to EU standards. If you’re looking to open a business in Estonia, we can also help you with recruitment; click here for more details.
What is the regulatory and legislative framework for those wishing to set up a company in Estonia?
For foreign investors wishing to establish a business in Estonia, the regulatory framework offers one of the most liberal foreign trade regimes in the world, with virtually no tariffs or non-tariff barriers. This approach has been implemented in the broadest regulatory arena. The local currency, the Estonian kroon (EEK), is pegged to the euro and is fully convertible in current account and capital transactions. Capital and profits can be freely repatriated. Estonia has no exchange controls or restrictions on foreign investment. The amount of foreign capital that can be invested in an Estonian business is unlimited, and companies can be fully foreign-owned. However, tax regulations must be strictly adhered to, and severe penalties apply for violations. It is therefore essential to hire an accountant if you are seriously considering establishing an Estonian company.
Opening a bank account in Estonia
And what are the banking services like?
The local banking infrastructure is well developed, although somewhat slower than elsewhere in the European Union. Contact us for more details on how we can help you open a bank account in Estonia .
There are financial incentives available for those wishing to open a business in Estonia –
There are no incentives for start-ups in the formal sense of the term, but other advantages associated with Estonia, such as business regularization and low labor costs, compensate for this shortcoming.
How can I get more information about company formation in Estonia?
For further details on starting a business in Estonia , please contact us and we will be happy to discuss your needs with you.