Company registration in Estonia

What to decide before registering a company

Registering an OÜ is technically a simple procedure. It is far more important to get the company structure right in advance: who will own it, who will sit on the management board, where the business will be managed from and how the company will operate after registration.

We check these questions before the application is filed, so the registered company does not have to be restructured right away.

1. Who will own and manage the company

The founder and the management board member do not have to be the same person. Before registration you need to determine:

• the shareholders and the size of their holdings;
• the management board members and how the company is represented;
• the ultimate beneficial owners;
• whether additional agreements between the owners are needed.

If there are several shareholders, we recommend agreeing in advance on decision-making, profit distribution, sale of shares and exit from the business.

2. What share capital to declare

The law allows an OÜ to be registered with capital starting from 0.01 € per shareholder. But minimum capital does not suit every company.

The amount of capital affects not only the registry entry, but also the founders' liability, how partners perceive the company and its future corporate procedures. We help choose a sensible amount instead of simply entering the minimum.

The capital contribution must be made when the company is founded. If the capital does not exceed 50,000 €, the founders confirm the contribution in the registration application (official e-Business Register rules).

3. Address and contact person

Every Estonian company must have a registered address. If the management board is located outside Estonia, depending on the chosen address the company may need a licensed contact person. The contact person receives official documents from the Business Register, the Tax and Customs Board, the courts and other state institutions and forwards them to the company. The contact person does not manage the business and does not acquire the right to sign documents on behalf of the company (official e-Residency explanation).

Our services:

• legal address in Estonia — 200 € per year + VAT;
• contact person — 300 € per year + VAT;
• legal address and contact person — 400 € per year + VAT.

4. Financial year and reporting

The financial year is usually set from 1 January to 31 December, but a different twelve-month period can be chosen if needed.

The annual report must be filed within six months after the end of the financial year. This obligation remains even for a company that was temporarily inactive and earned no income.

Accounting starts not with the first tax return or the first income, but from the moment the company's first transactions and documents appear.

5. Taxes and VAT registration

Registering a company does not automatically register it for VAT.

The obligation to register usually arises when the company's taxable turnover in Estonia exceeds 40,000 € from the beginning of the calendar year. In certain cases the obligation may arise earlier — for example, due to the nature of the transactions, intra-EU acquisition of goods or a foreign entrepreneur operating in Estonia. Voluntary registration is also possible, but the tax authority may ask for proof of real economic activity (Estonian Tax and Customs Board).

That is why we check the VAT question against the specific business model instead of ticking the box automatically.

6. Where the company will actually operate

Estonian registration by itself does not create a real business presence in Estonia and does not guarantee that a bank account will be opened. For the company to operate, you may need:

• an actual office;
• employees hired and registered directly by the client’s company;
• local management;
• accounting and tax records;
• contracts and corporate documents;
• licences or notices of economic activity;
• proof of the origin of funds and the economic substance of transactions.

We can not only register the OÜ but also build the company’s working infrastructure in Estonia. Employees are hired directly by the client’s company, and the company itself pays the salaries and related taxes.