Most important issue before company formation in Estonia 🚀

Selecting your business name is a crucial first step! A unique and memorable name can boost your company’s reputation and success. Remember! The company name must end with ‘OU’ or ‘osaühing’ for companies.

Don’t register a company in Estonia without following good practice rules. 🚫

📋 Include Legal Form (like ‘OÜ’ or ‘osaühing’) for companies.

👤 Sole Proprietorships: Use the proprietor’s first and last name.

🚫 Avoid Non-Partners: Don’t use names of non-partners or conflicting names.

🔍 Be Distinct: Ensure your name is distinct from existing names in the business register.

™️ Trademark Consent: Get consent for using trademarked signs or choose another name – Commercial Register may ask you for a change of company name if the name is connected with a trademark.  Do you want to register a trademark with the company? See Trademark Registration Service in Estonia.

🌐 Alignment Matters: Align your name with your business activity and location.

*** Check pronunciation 🧐

Ensure your name stands out. Even small differences in spelling or pronunciation count. It should also reflect your main activity and location.

*** Check the name before starting a company in Estonia. 🔍

Verify your preferred name in the e-Business Register. Compare it with existing names. The register makes the final call.

*** Check the Trademark Registration before registration ™️

Query the trademark database on the Patent Office’s website to avoid trademark conflicts it! Follow these steps to choose the perfect business name in Estonia. Good luck! 🍀👍

Why You Need a Contact Person 🇪🇪

If your company’s management board is abroad, you must have a contact person in Estonia, as per the Commercial Code.   The service is available through virtual office providers in our Marketplace.
Who Can Be a Contact Person? 📜

Who Can Be Your Contact Person? 🤝

Designated contact persons can include notaries, advocates, sworn auditors, audit firms, or licensed trust and company service provider like Eesti Consulting – jump here to our contact person service in Estonia.
If someone within your company resides in Estonia, they can also serve as the contact person.

Requirements for Non-Resident Companies 🌍

When registering as a non-resident company, you must specify the location of your management board (if it’s outside Estonia) in the Commercial Register.

Separation of Legal Address 🏢

Starting from February 2023, you have the flexibility to separate your legal address from your contact person’s address.    While not mandatory, most e-residents prefer a single service provider for both.
Responsibilities of Your Contact Person 📬

For foreigners and e-residents, company formation in Estonia is made easier with these guidelines, catering to e-Residency company needs.

Designated contact persons can include notaries, advocates, sworn auditors, audit firms, or licensed trust and company service providers. If someone within your company resides in Estonia, they can also serve as the contact person.

Requirements for Non-Resident Companies 🌍

When registering as a non-resident company, you must specify the location of your management board (if it’s outside Estonia) in the Commercial Register.

Separation of Legal Address 🏢

Starting from February 2023, you have the flexibility to separate your legal address from your contact person’s address. While not mandatory, most e-residents prefer a single service provider for both.

Responsibilities of Your Contact Person 📬

Your contact person handles essential documents and letters. Even in Estonia’s digital era, some legal documents are still received in paper form. When your contact person receives such documents, they are considered delivered to your business. No need for them to be a shareholder, board member, or employee, and they don’t require special rights to act on your company’s behalf.

For foreigners and e-residents, company formation in Estonia is made easier with these guidelines, catering to e-Residency company needs.

1. Apply for e-Residency Card 📨

Begin by applying for an e-Residency card through the Estonian Police and Border Guard Board (PBGB) website.

2. Collect Your e-Residency Card 🏢

Once approved, collect your e-Residency card from the Estonian embassy or pick-up location.

3. Verify Identity 🔑

Use your e-Residency card to access secure Estonian government services online.

4. Choose Your Company Name 📛

Select a unique and suitable name for your company.

5. Prepare Necessary Documents 📄

Gather the required documents, including your business plan, legal address, and contact person.

6. Register Your Company Online 💼

Visit the Estonian Business Register’s website and complete the online registration process.

7. Pay State Fee 💳

Pay the state fee for registering your company.

8. Obtain VAT Number (if needed) 💰

If applicable, register for VAT and obtain a VAT number.

9. Set Up Legal Address and Contact Person 🏠🤝

Ensure you have a legal address and contact person, either by yourself or through a service provider. Learn More

10. Open Bank Account 🏦

Choose a suitable Estonian bank and open a business bank account.

11. Explore Financial Services

Consider services like Payoneer and Wise for international financial solutions.

12. VAT Registrations

Learn more about VAT registrations in Estonia here.

Congratulations! 🎉 Your Estonian company is now registered and ready for business.

Imagine Markus, an IT programmer, decides to set up a private limited company in Estonia. According to the rules, he is required to contribute a minimum share capital of €0.01 per shareholder. Since Markus is the sole shareholder, he needs to invest at least €0.01 as the share capital.

However, understanding the value of a strong financial foundation for his business, Markus chooses to invest a higher amount as his share capital. This decision not only shows his commitment but also enhances his company’s capital base, which could prove beneficial for future growth.

During the company registration process, Markus confirms the payment of his chosen share capital amount. Once the funds are successfully transferred to his company’s bank account within the EEA and registered in the Estonian Business Register, Markus can allocate these funds for various business needs, such as equipment, software, and operational expenses.

In the long run, by adhering to the requirement of declaring his share capital to the Estonian Tax and Customs Board, Markus positions himself to potentially access tax advantages if he decides to close his company down the road.

Importantly, Markus learns that he won’t be able to distribute dividends directly from his share capital contribution. Dividends can only be shared among shareholders from the company’s generated profits after the share capital has been paid and registered. This insight encourages Markus to plan his business finances prudently to ensure future profitability and returns for himself as the shareholder.

Gather and submit vital documents such as shareholder and director identification, articles of association, and the completed registration application.

Cover the state fees associated with the registration process. These fees contribute to document processing and entry into the Business Register. Registering a private limited company (OÜ) online incurs a state fee of €265

Await the approval of your registration application. The processing duration varies and is influenced by the workload of authorities.

📊 VAT Registration in Estonia 🇪🇪

So, you’ve set up your consulting company in Estonia, and it’s thriving. But as your business grows, there’s an important consideration: Value Added Tax (VAT). Here’s a friendly guide to understanding VAT registration with emojis to make it simple! 🤗

1. VAT Basics 🧾

When you establish a company in Estonia, you aren’t automatically liable for VAT or entitled to deduct input VAT. VAT registration becomes mandatory when your total taxable sales exceed €40,000 from the beginning of the calendar year.

2. Optional Registration 📈

Before reaching the threshold, you have the option to register for VAT. It depends on the VAT amount on goods and services you buy and the VAT status of your clients.

3. Plan Ahead 🗓️

Once you foresee reaching the threshold, initiate the registration process. You must register within three business days of crossing the threshold.

4. Voluntary Registration 📝

You can register voluntarily before reaching the threshold by providing evidence of your business intentions.

5. Estonian VAT Number 🆔

The Estonian VAT number starts with a prefix EE, followed by nine digits (e.g., EE123456789).

6. VAT Rates 💼

Services to Estonian companies and individuals typically have a standard 20% VAT rate. A reduced 9% VAT rate applies to certain services. If you serve customers in other EU Member States or third countries, a 0% VAT rate often applies.

7. B2B Transactions 🤝

For B2B transactions in other EU Member States or third countries, include the customer’s VAT registration number and “reverse charge mechanism” on invoices.

8. B2C Transactions 🧑‍🤝‍🧑

B2C transactions outside Estonia may be subject to Estonian VAT, or you may need to register in the customer’s country and follow local VAT rules.

9. Verify VAT EE Number ✅

You can verify the VAT EE number on the VIES website or the Estonian Tax and Customs Board’s KMKR website.

For comprehensive VAT registration services in Estonia, visit this link. Make informed choices to ensure your consulting business thrives in Estonia! 🌱💼