Groups with companies in several countries often add an Estonian private limited company (OÜ) — as a holding, as a service company for the group or as the company that sells in the European Union. This article sets out the Estonian rules that shape that part of the structure: when companies form a group under the Commercial Code, which companies are associated persons for income tax, how prices between them are taxed, and what the Estonian company must be able to show the Tax and Customs Board.
The article is general information, not legal or tax advice. How the group as a whole is taxed depends on the law of every country in it; ask a tax adviser in each of them.
When companies form a group
- Parent and subsidiary. A company that is a shareholder of another company and owns a majority voting interest in it is its parent undertaking, and the other is a subsidiary; a company in which a subsidiary has a majority voting interest is also a subsidiary of the parent (Commercial Code § 6(1)).
- Control without a majority. A company is also a subsidiary where the parent has control as a shareholder, with or without an agreement (§ 6(2)). A parent undertaking and its subsidiaries form a group (§ 6(3)).
Associated persons and prices between group companies
- Who is associated. For income tax, companies of one group within the meaning of Commercial Code § 6 are associated persons, and so are, among others, a company and a person holding at least 10% of its share capital, votes or profit rights (Income Tax Act § 8(1) clauses 2 and 3).
- Market value. If the price of a transaction between an Estonian company and an associated person differs from the market value, income tax is charged on the amount the company would have received as income, or would not have incurred as expenses, at a market price (Income Tax Act § 50(4)).
- Information on request. To apply that rule, the Tax and Customs Board may ask the Estonian company for additional information on its transactions with associated persons, on the activities of the group companies and on the structure of the group, and must give it at least 60 days to answer (§ 50(7)).
Prices for services, loans, licences and goods between group companies are therefore set and recorded from the start, in agreements that say what is supplied and how the price is set.
Dividends from subsidiaries
An Estonian company pays income tax when it distributes profit (Income Tax Act § 50(1)), but not on a dividend paid out of a dividend received from a subsidiary of an EEA Contracting State or of Switzerland, liable to income tax, in which it held at least 10% of the shares or votes when it received the dividend; for subsidiaries elsewhere the subsidiary's dividend or profit must also have been taxed (§ 50(1¹) clauses 1 and 3). Companies in a non-cooperative jurisdiction for tax purposes are excluded. The article Estonian holding company: formation and restructuring explains the holding side.
Running the Estonian company from abroad
Group companies are often managed from another country. In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6), and if its address is abroad it needs a contact person in Estonia (Commercial Register Act § 24). Whether the country where it is managed also counts it as resident is set out in our country guides — see Estonian company run from abroad.
What we prepare
The service International group structure setup with an Estonian company, from from €2,500, covers the Estonian part of the structure: the plan of that part, the formation or register documents and articles of association of the Estonian companies, drafts of the agreements between the group companies, and the Estonian commercial register filings. The starting price is for the Estonian part with one company; more work is agreed in writing before it starts.
- Not included: tax advice, the formation of companies outside Estonia — they are formed under their own law by providers in their countries — and notary and state fees.
- Who decides: the commercial register registers the entries, and the tax authorities of each country decide on tax.
Prices exclude VAT. All communication takes place by email.
Ready to start? The Estonian part of the structure: companies, articles, draft group agreements and register filings; not tax advice. Order.
Official sources
The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.
- Commercial Code — Riigi Teataja, English translation
- Income Tax Act — Riigi Teataja, English translation
- Commercial Register Act — Riigi Teataja, English translation
Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.