VAT

When establishing a company in Estonia, you can take advantage of the VAT exemption if you do not exceed a turnover of EUR 40,000 per year.

If you exceed this limit, registration for VAT is mandatory.

You can register for VAT voluntarily on the day of starting your business, however, the tax office in Estonia will want to get confirmation that your business is associated with Estonia, e.g. you have clients, an office or contractors with whom you work.

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What does mean “distributed profits”?

  • Corporate profits distributed in the tax period
  • Gifts, donations and expenses in relation to representatio
  • Private expenses and payments not connected with the business
  • Transfer of the assets of the permanent establishment (PE) to its main headquarter or to other companies
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Income TAX

The most know incentive of the Estonian tax system is shifting moment of taxation to time, where the profit is distributed. If the board of directors decide to not pay out dividends to its shareholders, all profits are re-investment. Therefore company will be not liable to pay Corporation Tax. Some people treat this rule commonly as “Corporation Tax 0%”.

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Become e-resident

Become an e-resident and collect your e-Residency card from your country’s embassy.

You don’t have to fly to Estonia to Tallinn. Thanks to the card you will be able to set up a company in Estonia, a bank account and use it as an electronic signature.

You can do 95% of your business with the e-Residency card without leaving your home.

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MONEY LAUNDERING TERM

Money laundering means:

  • The concealment or disguise of the true nature, source, location, disposition, movement, right of ownership or other rights related to property derived from criminal activity or property obtained instead of such property.
  • The conversion, transfer, acquisition, possession or use of property derived from criminal activity or property obtained instead of such property to conceal or disguise the illicit origin of the property or of assisting a person who is involved in criminal activity to evade the legal consequences of his or her activity.
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HOW LONG TAKES THE PROCESS?

It takes up to 30 days from day of submission to get the answer from the FIU regarding the licenses. Once the licenses have been granted, you have to start providing the services within 6 months.

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COMPANY FORMATION COST IN ESTONIA

Company formation costs in Estonia is divided into fixed costs and monthly costs. Fixed costs are help in obtaining an e-Residency card (100 €) and the cost of the registration address and contact person. State fee for Commercial Register is aprox. 190€ in case of electronic company formation via Company Registration Portal.

Monthly costs are the cost of accounting services or one-time submission of financial statements to RIK. Our company presents 2 kind of incoporation ways:

Opening Estonian company by e-Residency card (cheapeast option) especially for digital nomads

Company registration by Power of Attorney ( usually notarized and apostilled depending on the country of residence – this is exepensive option if you are not e-Residency card holder and you would like incorporate business in Estonia wholly remotely)

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APOSTILLE AND NOTARIZED DOCUMMENTS

Apostille is issued by a local notary public in Estonia. This can be done, for example, in Tallinn or Tartu. If you are a non-resident, we may apply for Apostille on your behalf.

Apostille is an official document that certifies the authenticity of documents and can be used, for example, to set up a bank account abroad for an Estonian company. Additionally, we can obtain for you coporate documents with notarizations.

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ESTONIAN COMPANY, 0% TAX – OFFSHORE?

Not. Estonia has concluded bilateral conventions for the avoidance of double taxation and the prevention of fiscal evasion with countries over the world.

Estonia is a member of the OECD organisation. Moreover, the beneficial owner is visible and published in Estonian RIK – Commercial Register.

Even so – there are a lot of tax and business incentives of running the company through Estonia. The Estonian private limited company is called “OÜ” or “osaühing” in Estonian language.

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