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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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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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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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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