Company registration in Estonia

The tax rate on retained earnings is 0%. This absence of income tax can be very advantageous for those companies that use the income earned not to make payments to natural persons, but to invest it in the future development of their business.

The biggest difference from other European countries is that in Estonia this tax-free method on reinvested earnings applies to all sectors of the economy, not just to individual sectors.

In addition, a good advantage of doing business in Estonia is that Estonian company has a possibility to acquire ownership of vehicles and real estate without any taxes.

In addition, as for the tax system in Estonia, it is clear and transparent without progressive taxes, which increase tax rates as the taxable base grows.

At the same time, Estonia has concluded international agreements on the avoidance of double taxation with 59 countries, which can also confirm the transparent and simple tax system in Estonia.

Thus, this tax-free condition of receiving retained earnings is an example, which attracts investors from all countries to establish their companies in Estonia without any violation of the law or loss of finances.

By opening a company in Estonia, further maintenance of the company will require minimal annual cash expenses, as well as the maintenance of your company’s bank account, which can be easily opened in any European payment system.

At the same time, there is no VAT (Value Added Tax) when dealing with European partners. Thus, if a firm sells goods or services to companies within or outside the EU, it is possible to avoid paying turnover tax if there is a VAT number that can be requested online.

This can be evidenced by the third place in the ranking of European countries for the establishment of startups, as well as one of the leading positions for ease of doing business in Europe.

In addition, Estonia is number one in the development of digital life and this achievement makes it possible to register a company easily and simply online, using only an e-residence card, which is also created online, or to register a company either by power of attorney or in person with a notary.

As for the e-resident card, it can be created by citizens of a foreign country, who can also become founders and board members of the company. This card enables you to manage your business remotely from anywhere in the world. With the help of such technology, you will be able to file reports, send enquiries, receive responses from government agencies, all over the internet, which requires a minimum amount of your time.

The whole process of registering a firm takes just one day. On this basis, you can open a business in Estonia at any time, without even leaving your home!

Estonia has a low cost of incorporating a company, which can be registered with a share capital of €0. At the same time, the standard share capital is €2,500, which can be deferred.

In this case, you can open your company with a zero contribution and pay €2,500 later when the amount is available. Thus, one of the advantages of opening a company in Estonia is that there is no need to pay share capital when setting up the company.

In case of conducting business in Estonia, a member of its board who is a citizen of a foreign country has the right to apply for a residence permit in Estonia, which is granted for up to five years.

This can also be confirmed by the fact that Estonia is by far the most loyal Baltic state in obtaining a residence permit. Thus, obtaining a residence permit will make it easier for you to manage your company with your physical presence.