Many Indian entrepreneurs form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from India. Three sets of rules meet: Estonian company law and tax, Indian income tax, and India's foreign exchange rules on overseas investment. Estonia and India have a tax treaty. This guide sets out what we could read in the official texts, and what we do on the Estonian side.
The guide is general information, not tax or legal advice. Indian tax residence rules, the Estonia–India tax treaty and India's rules on overseas investment can apply to you as the owner; check them on the Indian side with a chartered accountant or an Indian lawyer before you form or buy the company. We read the treaty in Riigi Teataja, the list of Estonia's tax treaties of the Estonian Ministry of Finance and the Reserve Bank of India's Master Direction on Overseas Investment on 4 November 2026; the English wording of the treaty is the official one.
In Estonia: an Estonian company is Estonian
A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.
In India: the company side
Indian income-tax law has its own rule on when a company is resident in India. We could not read its current official text on the sites of the Indian government on 4 November 2026, so we do not state it here. If the company is managed from India, ask your chartered accountant whether that makes it resident in India, or makes part of its business taxable there.
The Estonia–India tax treaty
- In force. The Agreement between the Republic of India and the Republic of Estonia for the avoidance of double taxation was signed on 19 September 2011 and entered into force on 20 June 2012; it applies in Estonia from 1 January 2013 and in India from 1 April 2013 (Estonian Ministry of Finance, list of tax treaties).
- A company resident in both countries. The competent authorities endeavour to resolve the case by mutual agreement, having regard to its place of effective management or any other relevant criterion; without such agreement the company is not considered resident of either State for the purposes of enjoying benefits under the Agreement (Article 4(3)).
- Dividends. Dividends paid by a company resident in one State to a resident of the other may be taxed in the other State; the State of the paying company may also tax them, but if the beneficial owner is a resident of the other State, the tax may not exceed 10 per cent of the gross amount (Article 10(1) and (2)).
- The Multilateral Instrument. The OECD Multilateral Instrument applies to the treaty — in India from 1 July 2022 and in Estonia from 1 January 2023 (Ministry of Finance list); it can change the wording of treaty articles. The articles above are quoted from the treaty as published in Riigi Teataja.
In India: the owner side — investing abroad
- Overseas investment rules. Investing from India in the shares of a company abroad falls under India's foreign exchange rules on overseas investment (the OI Rules and the OI Regulations). The Reserve Bank of India's Master Direction says: “A resident individual may make overseas investment in accordance with schedule III of OI Rules.”
- Reporting. “A resident individual making overseas investment must comply with the reporting requirements as provided under the OI Regulations and reporting shall also be done as provided under the LRS where such investment is reckoned towards the LRS limit.” (Master Direction – Overseas Investment, RBI/FED/2024-25/121, updated as on 1 April 2026.)
- Your bank. The Master Direction is addressed to the authorised dealer (AD) banks in India — ask your bank which forms apply to you.
What to decide before you form or buy the company
- Where the company is managed. Under the treaty, the place of effective management is the starting point when a company could be resident in both countries.
- How you pay for the shares. The overseas investment rules and your bank's forms come before the payment, not after it.
- How profits reach you. Dividends fall under Article 10 of the treaty and your Indian return.
Documents from India: the apostille
India is a party to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention); it has applied there since 14 July 2005. A public document from India — for example a power of attorney certified by a notary or a company register extract — is accepted in Estonia with an apostille; consular legalisation is not needed.
In India the apostille is issued by Ministry of External Affairs of the Government of India.
The Convention does not apply between India and Germany, which objected to its accession; Estonia did not object.
Source: the HCCH status table of the Apostille Convention (hcch.net) and the HCCH status table of the Apostille Convention (hcch.net), read 4 November 2026.
What we do on the Estonian side
- for your own company, a written analysis of its tax residence and permanent establishment under Estonian law and the treaty — an analysis, not tax advice;
- online formation for an e-resident — €0.01 (required with it: registered address and contact person for the first 12 months €250), or formation by power of attorney — €1,250;
- a ready-made company bought remotely — €1,200, with an apostilled English registry extract as an add-on — €550, sent by courier — €100; Registered address and contact person service for one year are included.
- accounting — from €150 / month and the annual report — from €450;
- the registered address and contact person after the first 12 months — €350 / year.
New Estonian company formation: in person at a notary office in Tallinn €950; remotely, by notarised power of attorney €1,250. Registered address and contact person service for one year are included.
Ready-made Estonian company: in person at a notary office in Tallinn, without a VAT number €900; in person at a notary office in Tallinn, with a VAT number €1,150; remotely, by notarised power of attorney, without a VAT number €1,200; remotely, by notarised power of attorney, with a VAT number €1,450. Registered address and contact person service for one year are included.
Our accounting covers the Estonian company's Estonian obligations. Indian tax returns, Indian foreign exchange filings and Indian advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.
Prices exclude VAT. All communication takes place by email.
Ready to start? A ready-made Estonian company bought by power of attorney, with an apostilled English registry extract and a sworn translation; Indian tax advice is not included. Order.
Official sources
The laws this article names, each linked to its 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.
- Income Tax Act — Riigi Teataja, English translation
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Frequently asked questions
Does running an Estonian company from India change its Estonian duties?
No. A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6) and keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia. Whether India also treats it as resident is a question for your chartered accountant.