Estonia is a small country in northern Europe with a large reputation among entrepreneurs. It is a member of the European Union and of the euro area, it has one of the most digital public administrations in the world, and its company law is straightforward. This guide gives an overview of why people choose Estonia, what kinds of companies they set up, and where to find our more detailed guides on each topic.
Why entrepreneurs choose Estonia
An EU company
An Estonian company is an EU company. It can trade across the EU single market, use the euro as its currency, and, once registered for VAT, trade with VAT-registered businesses in other member states under the common EU VAT rules. For entrepreneurs from outside the EU, an Estonian company is a practical way to operate within the European market.
A digital state
Almost all dealings with the Estonian authorities can be done online: the Commercial Register, tax returns and annual reports are filed electronically, and documents can be signed digitally. For many people abroad this is the most important advantage, because a company can be managed without regular visits.
The Estonian government also runs the e-Residency programme, which gives non-residents a digital identity for signing and for using Estonian e-services. e-Residency is a government programme with its own application process; it is not a service we provide, and it is not required for buying a ready-made company from us.
A simple corporate tax model
Estonia is known for its corporate income tax model, in which a company's profit is generally taxed when it is distributed, for example as dividends, rather than when it is earned. Profits that stay in the company and are reinvested are, in general, not taxed at the company level. The details, rates and exceptions change over time, and your own tax position also depends on where you live, so the model should always be checked with a tax adviser for your case.
A transparent register
The Estonian Commercial Register is public and up to date. Anyone can check a company's registration date, owners, managers and annual reports. This transparency helps you when you deal with Estonian companies, and it helps your partners trust yours.
The main routes to an Estonian company
Most entrepreneurs use the private limited company (OÜ). There are two ways to get one:
- Buy a ready-made company. An existing, unused OÜ with its original registration date, available with or without an active EU VAT number, bought in person at a notary office in Tallinn or remotely by notarised power of attorney. Read Ready-made Estonian company with EU VAT.
- Form a new company. A newly registered OÜ, with VAT registration as a separate step. Read New Estonian company formation.
Every Estonian company needs an address in Estonia, and a company whose management is abroad needs a contact person in Estonia. Both are included in our ready-made and formation packages for 12 months.
Regulated activities
Some businesses need more than an ordinary company. If you plan to provide payment services, issue electronic money, organise gambling, manage investment funds, collect debts, lend money or carry goods by road for others, the company must meet additional requirements and obtain a licence or registration from the competent authority before it starts. Our guides describe each of these in general terms:
- Estonian payment institution licence
- Estonian e-money institution (EMI) licence
- Estonian casino and gambling licence
- Estonian fund structure
- Debt collection, lending and transport licences
These services are requested through the quote request form on our licensed companies page. State fees are charged separately, and licensing decisions are made by the authorities.
Running and closing a company
An Estonian company must keep accounts and file an annual report every year, even when it has no turnover. When a company is no longer needed, it can be deleted from the register if it never traded, or closed through liquidation if it did. Read Annual reports, company deletion and liquidation in Estonia.
Things to consider before you start
- Banking. Opening a business account is a decision of the bank or payment provider, which will carry out its own checks. We offer assistance with Revolut Business and Wise applications as an add-on, but the provider decides.
- Taxes where you live. Owning or managing an Estonian company can have tax consequences in your country of residence. Check this with a tax adviser there.
- Substance. For regulated activities, and often for VAT registration, the authorities expect a real business with a real connection to Estonia, not only an address.
- Due diligence. Every serious provider must identify its clients. We are licensed by the Estonian Financial Intelligence Unit (licence FIU000117) and ask for identity documents and information about your plans.
About us
LexorCorp Global OÜ is an Estonian company at Punane 6, Tallinn, licensed by the Estonian Financial Intelligence Unit (licence FIU000117). We offer ready-made companies, company formation, licensed and regulated companies and accounting, reporting and closure services. Our prices are published on the service pages, and all communication takes place by email, so everything is documented in writing.
This guide is general information. It is not legal or tax advice for your specific situation.