Company Formation in Estonia
Company formation in Estonia is governed by the Commercial Code and carried out through the official e-Business Register. The country offers one of the most digitally advanced incorporation systems in the European Union, allowing founders to register a private limited company (OÜ) fully online within days.
Register Your Estonian OÜ — Fast, Compliant and EU-Ready
Eesti Firma provides professional company registration services in Estonia for international founders, e-residents and remote businesses. As a licensed corporate service provider (TCSP), we ensure that your Estonian company is properly structured from the outset to meet corporate, tax and registry requirements.
- ✓ 0% corporate income tax on retained earnings
- ✓ Official registration via the Estonian e-Business Register
- ✓ Remote incorporation via e-Residency or notarised power of attorney
Legal & Compliance Support
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Assistance with Company Setup in Estonia
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Estonia is an EU Member State with an established legal and digital framework for company formation, commonly used by international founders and cross-border businesses.
When starting a company in Estonia, professional assistance may help reduce procedural delays and documentation errors, particularly in communication with the authorities. This is especially relevant for foreign founders, e-residents and remote businesses required to comply with Estonian legal and digital requirements.
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Estonia operates a nationwide digital administrative system and introduced the e-Residency programme, enabling non-residents to establish and manage an EU company remotely. The key advantages of doing business in Estonia are outlined separately.
Company formation in Estonia is carried out through online registry procedures, including digital document submission and state filings. Registration is typically completed within several business days once all required information is submitted.
Company Registration Options in Estonia
The available incorporation options differ depending on your circumstances and preferred method of registration. Each option provides defined timelines, fixed pricing, and professional assistance throughout the process.
Company Formation with e-Residency
Company registration is carried out online through the Estonian e-Business Register. All founders and board members must possess a valid e-Residency card or Estonian digital ID.
e-Residents
Digital Nomads
Remote Businesses
- ✅ 100% online formation process
- ✅ No travel to Estonia required
- ✅ Easy access to Estonia’s digital services
Company Registration in Person by Visit
Company formation may be completed in person before a notary in Tallinn. Our team prepares the required documentation and coordinates the incorporation procedure.
Those close to Estonia
Frequent travelers
Those who value speed
- ✅ Personalised legal help
- ✅ Flexible company structures
- ✅ Fast company setup during visit
Company Setup Remotely by Power of Attorney
Company incorporation may be completed remotely on the basis of a notarised power of attorney. Personal presence in Estonia is not required; the procedure is carried out on the client’s behalf.
Non-EU founders
Those unable to travel
No e-Residency yet
- ✅ No personal presence needed
- ✅ Convenient for busy entrepreneurs
- ✅ Available to non-EU citizens
Purchase of a Ready-Made Estonian Company
An existing Estonian company with a registered legal address and standard corporate documentation may be acquired. This option allows business activities to commence without undergoing a new incorporation procedure.
Urgent business start
No waiting time
Complex corporate structure
- ✅ Ready-to-use company
- ✅ Remote-friendly, no delays
- ✅ Legally verified entity
Additional Services
Additional corporate, legal and compliance services are available. These may be selected based on the operational needs of the company.
Estonia is regularly assessed in international business and tax competitiveness rankings. The regulatory framework is clear, administrative procedures are largely digital, and the corporate tax model is based on taxation upon profit distribution.
The following section outlines the company registration process, the main types of legal entities and the practical aspects of taxation. It provides a structured overview of the key considerations for founders establishing a business in Estonia.
Reasons to Establish a Company in Estonia
Business activity in Estonia is supported by a digital administrative system and a clearly defined regulatory framework. Most corporate procedures, including company registration and tax reporting, are conducted online.
Estonia’s position in international business and tax competitiveness rankings reflects these structural features:
Estonia in Global Business and Digital Rankings
These rankings show how Estonia, despite its size, has built a reputation as one of the world’s most entrepreneur-friendly countries.
| Index | Organization | Rank | Year / Scope |
|---|---|---|---|
| International Tax Competitiveness Index | Tax Foundation | 1st | 2024, Global |
| Ease of Doing Business | World Bank | ~17–18 / ~190 | 2020, Global |
| World Competitiveness | IMD | 33rd | 2024, Global |
| Economic Freedom (Europe) | Heritage Foundation | 5th | 2024, Europe |
| Business Ready — Public Services | World Bank | 1st | 2024, Global |
| Business Ready — Operational Efficiency | World Bank | Top 3 | 2024, Global |
| Business Ready — Regulatory Framework | World Bank | ≈ 11–20 | 2024, Global |
International rankings provide comparative indicators, but the practical advantages are reflected in the day-to-day regulatory and administrative framework. Corporate procedures are standardised and the legal system is designed to ensure predictability for businesses.
These structural elements create a stable environment for entrepreneurship:
- Digital administrative system. Corporate procedures are conducted online through a secure digital ID infrastructure, including company registration, contract signing and tax filing.
- Low share capital requirement. A private limited company (OÜ) may be established with a minimum share capital of €0.01 per shareholder, subject to statutory distribution restrictions.
- Corporate income tax model. Profits are taxed only upon distribution. Retained earnings are not subject to corporate income tax until dividends are declared.
- EU market access. An Estonian company operates within the EU legal framework, enabling cross-border provision of services and VAT registration under EU rules.
- Regulatory environment. Estonia maintains a transparent legal framework and is regularly assessed in international business and tax competitiveness rankings.
- International ownership. 100% foreign ownership is permitted, and there is no requirement for local shareholders or directors.
Estonia combines a digital administrative system, a structured regulatory framework and access to the EU internal market. Its corporate tax model is based on taxation upon profit distribution, which is often described as tax-efficient in comparative discussions.
These features make Estonia a practical jurisdiction for freelancers, digital entrepreneurs and internationally oriented businesses.
Company Formation in Estonia: Procedural Steps
Estonian Company setup is conducted through a largely digital procedure. Most steps may be completed online, particularly where the founder holds e-Residency, Estonia’s digital identification system for non-residents.
Registration Time Example
According to the official e-Residency programme, the fastest recorded company registration through the Estonian e-Business Register was completed in 15 minutes and 33 seconds. Actual processing times depend on the completeness of the submitted information and registry workload.
Source: Estonian e-Residency Programme
The company formation procedure generally includes the following steps:
- Preparation of company details. Select a unique company name in the Latin alphabet and determine the principal activity (EMTAK code). Name availability can be verified in the Commercial Register.
- Registered address and contact person. Each company must have an Estonian registered address. Non-resident founders must also appoint a local contact person, typically a licensed service provider. These requirements are often fulfilled through a virtual office service.
- Submission of the application. The incorporation application is filed through the Estonian e-Business Register using e-Residency or an Estonian ID card. The minimum share capital is €0.01 per shareholder, and the state fee is payable upon submission. Alternatively, registration may be completed before a notary or via a notarised power of attorney.
- Registration decision. The Commercial Register reviews the application and issues a registration decision. Upon approval, the company receives its registry code and may proceed with banking arrangements and VAT registration or EORI application where required.
The procedure is standardised, with processing times depending on the completeness of the submitted documentation.
Key Considerations
Before registering a company in Estonia, it is useful to review several key legal and operational aspects of the system.
e-Residency Programme Statistics
According to official data, more than 126,500 e-residents have been registered, resulting in the establishment of over 36,000 Estonian companies across various sectors.
Source: Estonian e-Residency Programme
The following aspects are particularly relevant when establishing a company in Estonia:
- Minimum Share Capital. A private limited company (OÜ) may be established with a minimum share capital of €0.01 per shareholder. Dividend distributions are subject to statutory capital contribution requirements.
Learn more about share capital.
- Ownership and Management. An OÜ may be founded and managed by a single individual. 100% foreign ownership is permitted, and there is no requirement for shareholders or board members to reside in Estonia.
Explore the duties and responsibilities of board members.
- Corporate Taxation. Corporate income tax is levied upon profit distribution. Retained earnings are not subject to corporate income tax until dividends are declared.
Read more about corporate taxation.
- Banking and Payment Services. Estonian companies may open accounts with local banks or EU-based fintech institutions, subject to internal compliance and due diligence procedures.
Find out how to open a corporate bank account.
These structural features define the legal and operational framework for companies registered in Estonia.
Overview of Legal Entity Types in Estonia
Estonian law provides for several types of legal entities, although a limited number are commonly used in practice. The chart below illustrates the current distribution of business entity forms.
Distribution of Business Entity Forms
This chart shows the current landscape of company types in Estonia, highlighting that the vast majority are OÜs (private limited companies), the most common choice for entrepreneurs starting a business.
The selection of a legal form is governed by the Commercial Code. Below is an overview of the principal legal entity types and their core characteristics.
- Private Limited Company (OÜ – osaühing). A limited liability company in which shareholders are liable only to the extent of their capital contribution. An OÜ may be established by one or more founders. The minimum share capital is €0.01 per shareholder, subject to statutory distribution rules. This is the most frequently used form for small and medium-sized businesses.
Learn more about Limited Liability Companies.
- Public Limited Company (AS – aktsiaselts). A corporate form typically used for larger enterprises. The minimum share capital is €25,000. An AS requires both a management board and a supervisory board. Shares may be publicly offered in accordance with applicable regulations.
- Partnerships (TÜ – general partnership, UÜ – limited partnership). In a general partnership, partners are jointly and severally liable for the obligations of the partnership. In a limited partnership, at least one general partner bears unlimited liability, while limited partners are liable up to their contribution.
Learn more about Partnerships.
- Sole Proprietorship (FIE – füüsilisest isikust ettevõtja). A status available to natural persons conducting business under their own name. The individual bears unlimited personal liability. Registration is required in the Commercial Register.
- Non-Profit Association (MTÜ). An entity established for non-commercial purposes. It has members rather than shareholders, and any surplus must be used in accordance with its statutory objectives.
Learn more about Non-Profit Associations.
In practice, the OÜ is the most commonly used form for commercial activities. The AS is typically selected for larger structures requiring share capital and supervisory governance. Partnerships and sole proprietorships involve different liability considerations and are used in more specific circumstances.
Overview of the Tax System in Estonia
Estonia’s tax system is structured around a distribution-based corporate income tax model and standardised reporting procedures. The framework is designed to provide clarity, predictability and compliance with EU tax principles.
The main elements of the Estonian tax framework are summarised below:
- Corporate Income Tax. Corporate income tax is levied upon profit distribution. Retained earnings are not taxed at the corporate level. The standard rate on distributed profits is 20% (22% from 2025). Dividends paid to non-residents are generally not subject to withholding tax, subject to applicable rules.
- Value-Added Tax (VAT). The standard VAT rate is 22% (24% from mid-2025). VAT registration becomes mandatory once annual taxable turnover exceeds €40,000. Declarations and reporting are submitted electronically.
- Personal Taxes and Payroll. Employment income is subject to a 20% income tax rate (22% from 2025). Employers pay 33% social tax in addition to unemployment insurance contributions. Dividends are not subject to social tax, subject to statutory conditions.
- Filing and Administration. Tax reporting is conducted electronically through the Estonian Tax and Customs Board. While no annual corporate income tax return is required in the absence of distributions, companies must maintain accounting records and submit an annual report to the Commercial Register.
In summary, corporate taxation in Estonia is based on profit distribution rather than annual accrual. VAT and payroll obligations apply in accordance with statutory thresholds and rates.
Eesti Firma: Corporate and Legal Expertise
Although company formation in Estonia is accessible, engaging a local corporate service provider can reduce procedural risks and administrative burden. Eesti Firma provides structured legal and corporate support throughout the incorporation and post-registration stages.
- Proven experience. With more than 10 years of practice and over 3,000 companies registered, our team has handled a wide range of incorporation and compliance scenarios.
- Integrated corporate services. We provide legal services, accounting, and tax advisory within a single service structure.
- Regulatory compliance focus. Our work is aligned with current Estonian corporate and tax legislation, ensuring that statutory requirements are addressed at each stage of the company lifecycle.
- Direct professional communication. Clients work with qualified specialists responsible for their engagement and ongoing corporate matters.
- Ongoing administrative support. We assist with document preparation, notarial procedures, VAT registration, annual reporting and related compliance obligations.
Eesti Firma acts as a long-term corporate and legal partner in Estonia, advising clients on company registration beyond e-Residency and alternative incorporation methods. Our work is carried out by a multidisciplinary team of legal and corporate specialists with experience in company formation, compliance and ongoing advisory services.
Initial Consultation and Engagement
An initial consultation allows founders to assess the appropriate legal structure and procedural requirements for company formation in Estonia. During this stage, we review the intended business model, planned activities and preferred incorporation method, and outline the applicable legal and tax considerations.
Eesti Firma has advised individual entrepreneurs and established companies on incorporation, regulatory compliance and ongoing corporate obligations. Our objective is to ensure that company formation and subsequent reporting requirements are addressed in accordance with Estonian law and registry practice.
FAQ | Frequently Asked Questions
We provide practical information to help you understand the process of establishing a business in Estonia and its regulatory framework. Below you will find answers to frequently asked questions received by our specialists.
- What is the best legal form for company formation in Estonia?
The most common legal form in Estonia is the Private Limited Company (OÜ). It offers limited liability, flexible management structure and relatively low share capital requirements, making it suitable for entrepreneurs and small and medium-sized enterprises.
- How long does it take to register or set up a company in Estonia?
Company formation in Estonia is generally efficient. Applications submitted through e-Residency are processed electronically by the Commercial Register, while notarised incorporation may require additional time depending on documentation and review procedures.
- How to check and reserve a company name in Estonia?
The company name must be unique and comply with Estonian naming requirements. Availability can be verified and reserved in the e-Business Register prior to submitting the incorporation application.
- What is the minimum share capital required and how can it be paid?
The minimum share capital for an Estonian private limited company (OÜ) starts from €0.01. Contributions may be made in cash to the company’s bank account or in kind, such as property or equipment, subject to proper valuation and documentation requirements.
- Can a foreigner register and own a company in Estonia?
Foreign nationals may establish and own companies in Estonia without residency requirements, subject to compliance with applicable legal and identification procedures. Estonia is recognised as one of the accessible EU jurisdictions for cross-border business structuring.
- Do I need to choose a business activity when registering a company in Estonia?
Yes. At least one primary activity must be selected in accordance with the EMTAK classification. This does not restrict the company from engaging in multiple lawful business activities, subject to applicable licensing requirements.
- Can an Estonian company open a bank account abroad or with fintech providers?
Yes. Companies in Estonia may open accounts with EU credit institutions or licensed fintech providers, including Wise, Revolut, Wamo and Paysera, subject to internal compliance and onboarding procedures.
- Is accounting mandatory for Estonian companies and when is the annual report due?
All companies in Estonia are required to maintain proper accounting records. The annual report must be filed with the e-Business Register within six months following the end of the financial year in accordance with statutory requirements.
- What is Estonia’s e-Residency program and how do I apply?
e-Residency is a government-issued digital identification for non-residents providing access to Estonia’s digital business environment. Applications are submitted online, and the card is collected at a designated embassy or authorised pickup location.
- How can I open a company in Estonia online with e-Residency?
With an e-Residency card, documents can be digitally signed and company formation in Estonia completed online. Processing time depends on submission accuracy and review by the Commercial Register.
