The Advantages of Company Incorporation in Estonia


Estonia is a country most people do not know much about, and no wonder, this country only has 1.3 million inhabitants so it is naturally more challenging for them to make their mark on the world than it is for countries boasting hundreds or tens of millions of citizens.
Not being deterred by the size of their country, however, Estonians can already boast the title “the most technologically advanced country in the world” and as such, can offer companies and business owners from all over the world a large number of benefits.

Some of those benefits, most of interest for anyone looking to incorporate a company abroad, include:
– The ability to do pretty much anything needed to incorporate a company and run it, online.
Documents can be signed online, companies can be registered online etc. thanks to an excellent electronic infrastructure in place in the country.
– There is no need to visit Estonia during the process of setting up a company there as everything can be done remotely.
– The country having what is often referred to as “the most competitive tax system in the developed world”, meaning the taxation system is simple and the tax rates are low.
– Only paying taxes once dividends have been distributed.
– The business owner’s own salary is exempt from taxes (up to a certain amount) and the business owner can furthermore allot up to €1,230 a month tax-free as fixed travel expenses (given that travel expenses exist for the business, of course).
– Can be done with a small initial investment, as the initial minimum capital investment for private limited companies, for example is only €2500.
– Estonia belonging to the European Union and having a good reputation both within the European Union and the rest of the world, especially compared to various offshore jurisdictions. Therefore, an Estonian company also gives you access to various benefits within the European Union, investment wise, banking wise and otherwise.
– Generally being able to get help in English, as Estonians tend to speak English at a high level.

Other things to be aware of when it comes to incorporating a company in Estonia

– There are 5 different types of companies in Estonia: private limited companies, public limited companies, general partnerships, limited partnerships and commercial associations. Out of these, the private limited companies are by far the most popular among foreign business owners.
– You need an Estonian e-residency and an Estonian address in order to be eligible to incorporate a company in the country. (Both can be obtained online)
– Only a natural person can become an e-resident.
– You need a natural person to be a director of every limited company in the country.
– If you are a non-resident you also need an in situ agent for your Estonian company, for document deliveries etc.
(Both of the above are easy to obtain either using a consulting firm such as Porat Group or a local agent)
– Regulations related to accounting practises for companies are vast, but audits are not necessary for most companies, as you need to reach a rather high threshold of millions of euros in order for that. Accounting can easily be outsourced for a low fee, so most business owners do not need to gain an understanding of Estonian accounting practices.
– The business name must be original and not shared with another Estonian legal entity. (You can check the Estonian company register in order to make sure about this)
– All private limited companies must add the abbreviation “OÜ” to the end of its name.

Porat Group offers comprehensive packages for business owners looking to incorporate a company in Estonia, as well language assistance should any language-related issues occur during the process (a unique advantage as most companies offering Estonian company incorporation services do not have Estonian speakers available). In order to find out more, as well as get tailor made recommendations for your business, contact us for a free, complimentary consultation.