Step 1: Selecting the Ideal Company Structure in Estonia Before initiating the process of company registration in Estonia, it’s crucial to determine the most suitable business entity type for your specific needs. A private limited company (PLC) is a popular choice due to its ease of incorporation, continuity, and personal liability protection. The following steps are tailored to starting a PLC company. Similar procedures apply to establishing a public company, but it requires additional steps, including appointing a supervisory board and auditor, and a higher minimum share capital of €25,000.
Fionza Consultants will thoroughly assess your requirements before recommending the optimal company structure in Estonia. Factors considered include the nature of your business activity, tax obligations, and the nationalities of shareholders and directors.
Step 2: Registering a Company Name Your proposed company name must undergo approval by the Estonia company registrar, the Centre of Registers and Information Systems (RIK). The name should use only Latin characters and exclude special characters. Fionza Consultants can assist in ensuring your name is unique and distinguishable by conducting a name search on the Estonia company registration portal to avoid any registration delays.
Step 3: Local Address and Contact Person Your company in Estonia must have a legal address and a local contact person, who acts as a messenger without decision-making authority. For those requiring it, Fionza Consultants can provide both an Estonia virtual address and a local contact person to facilitate the company registration process.
Step 4: Online Company Registration in Estonia You have two options to register your company in Estonia: through the online portal or by having a notary submit the Estonia company registration document on your behalf. The online portal requires either an Estonian ID, e-resident card, or specific EU member states’ identification.
Aside from the ID card, the only necessary documents for business establishment are the completed articles of association, making Estonia one of the most straightforward places to open a company in Europe. The application should also specify the primary business activity expected to generate income.
Step 5: Depositing Paid-Up Capital and Opening a Corporate Bank Account The minimum paid capital of €2,500 for a PLC can be paid after registration, even in installments. You can choose to use bank accounts in Estonia or within the European Economic Area. Fionza Consultants collaborates with a broad network of banks and can assist you in opening a local or international corporate bank account in your preferred jurisdiction. Firms can also opt for fintech solutions, offering multiple flexible payment options for starting a private company in Estonia.
Proof of payment must be submitted to the RIK for verification, in Estonian and digitally signed or notarized. Fionza Consultants can also arrange translation and notarization services for your company if needed. Additionally, firms can apply for any other necessary licenses, such as the Estonia cryptocurrency license, at this stage.
Step 6: Meeting Accounting and Financial Reporting Requirements Estonia’s accounting and bookkeeping standards are primarily defined by the Accounting Act of the Republic of Estonia and guidelines from the Accounting Board. Financial statements should comply with either local Estonian GAAP or the EU’s IFRS.
Annual reports and accounts must be submitted to RIK within six months after the end of the financial year. The specific requirements for annual accounts and auditing or review depend on the company’s size, measured by revenue, employees, and asset value.
Step 7: Tax and Employee Registration Taxation in Estonia primarily applies to distributed profits at rates ranging from 14% to 20%, depending on dividend distribution. Reinvestment of earnings is not subject to taxation.
Fionza Consultants will assist in creating an e-services account with the Estonian Tax and Customs Board, granting online access to the e-Tax and e-Customs portal. Businesses benefit from the convenience of not having to register separately for tax, as their tax identification number corresponds with their company registration number.
Through this portal, you can register your employees in the employment register, apply for value-added tax (VAT) registration if your annual taxable supply exceeds or is expected to exceed €40,000, and manage tax payments and submissions.
Fionza Consultants also offers comprehensive annual accounting and tax solutions to streamline your company’s financial compliance.