Estonia LLCFormation of Private Limited Company in Estonia
Estonia is considered as the most appropriate corporate structure for tax optimization in the EU. An Estonian LLC is the ideal corporate entity for a European trading company, since the profit can be accumulated tax-free. Estonian companies are also frequently used for tech startups where the business can be done remotely from any part of the world due to a wide range of internet-based services.
Recurring Maintenance Fees as from the 2nd year - $ 1200
Please note: If applying for a corporate bank account outside of Estonia you will need to order a full set of apostilled company documents duly translated and certified in English.
Facts & Info for Estonia LLC
The most common form of legal entity in Estonia is a limited liability company (Osaühing - OÜ) which is suitable for most kinds of activities. The advantage of a limited company is that the shareholders are responsible for the obligations of the company only for the value of shares they hold.
An Estonian company name can be in any language but must be unique. A registered name can be changed upon request and certain names are prohibited by the Estonian Company Law. Once you confirm that your chosen name is available in the Commercial register, you will be provided with a Certificate of Name Reservation.
MEMORANDUM AND ARTICLES OF ASSOCIATION
A company is incorporated in Estonia by an application submitted to the Commercial register. The Memorandum and the Articles of Association must be lodged with the Registrar. The memorandum specifies the activities in which the company may engage and the Articles of Association specifies the rules governing the internal management of the company.
Shareholders can be legal or physical persons of any nationality and residence. The minimum number of shareholders is one. No upper limit to the number of shareholders.
The minimum share capital required to establish a limited liability company is EUR 2500 which shall be contributed by shareholders in cash or in kind before a company registration with the Commercial register. The minimum nominal value of a share is EUR 1.
It is possible to establish a company without prior payment of contribution since January 2011. However, the share capital mentioned in the Articles of Association should be paid at a later stage at a specific period of time. OÜ without contribution is not a new form of Limited Liability Company and the regulation for general OÜ will apply. The Commercial Register will make a notice in the company's official extract that the company is established without contribution.
Requirements for LLC without contribution:
1. Shareholders may be natural persons only.
2. Articles of Association shall include the term during which the share capital is covered.
3. Until the contribution is made - the shareholders are personally liable for the company's activities.
4. Until the contribution is made – it is not possible to distribute dividends.
5. The maximum share capital of an OÜ without contribution is 25 000 EUR.
DIRECTORS AND SECRETARY
Only physical persons can be appointed as directors of the company and directors do not have to be shareholders. At least half of the management board of the company must be residents of Estonia or any other EEA member country or Switzerland.
There is no requirement to appoint a local secretary.
Every Company must have a registered office and address in Estonia which should be notified at the Commercial Register.
Board meetings can be held anywhere as per the convenience of the board.The articles of association or a resolution of the management board or the supervisory board may prescribe that the meeting shall be transmitted in full or in part in real time via the Internet, using two-way communication or any other technically secure manner.
It is usually takes 1 - 2 weeks.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
- Provision of Registered address and registered agent.
- Annual Government Fees.
BASIC TAX PRINCIPLES
Corporate Income Tax: The rate of corporate income tax is 20%. Residents are taxed on worldwide income. Non-residents are taxed only on income derived from Estonian resident companies and to permanent establishment of foreign companies. Estonian levies a corporate income tax on company’s distributed profits (in lieu of an annual corporate tax). Retained earnings are not taxed until profit distributions are made. Profit distributions may be specific (i.e. dividends, share buybacks or profit distributions via capital reductions) or deemed (which include expenditure and payments unrelated to business activities, as well as gift and donations).
Incoming Dividends: Dividends are treated as regular income and is taxed upon distribution.
Capital Gains Tax (CGT): Capital Gains are treated as regular income and is taxed upon distribution.
Withholding Tax: As Corporate Tax applies only upon distribution of the profit, there is not separately charged Withholding Tax.
Value Added Tax (VAT): EU VAT regime. The standard rate for inland sales is 20%.
FINANCIAL STATEMENTS AND AUDIT
Accounting and audit are obligatory for all Estonian companies. After the termination of the business year, the board prepares the annual accounting report and the business activity report in accordance with the Law on Accounting Financial Reporting, which should be submitted to the Auditor. The report for the business year approved by General Meeting should be submitted to the Estonian Business Register not later than 6 months from a business year-end.
- Name check and approval
- Preparing company registration forms and translation services
- Provision of registered address and registered agent for one year
- Provision of virtual office for one year
- Notary Public fee
- Government licence fee
- Provision of a bank account
- Submission of monthly report - TSD Form (for 12 months)
- Submission of annual report (for 1 year)
- A standard set of apostilled originals of corporate documents in German language:
- Articles of Association
- Extract from Commercial Registrar in Estonian language
- B-card (an Extract from the Estonian Commercial Register, containing the main details on the company)
- Bank account details including digipass (pin calculator)
- Rubber stamp
DOCUMENTS REQUIRED FOR THE COMPANY FORMATION
Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:
- Notarized copy of valid passport.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
- Original or certified copy of Banker’s reference letter (dated within 3 months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and can vary from USD 75 to USD 95. The fees depend on the jurisdiction of your ordered company, the country where the bank is based as well as your destination country.