Estonia

Estonia offers excellent opportunities for extension of market share in Baltic countries and provides possibilities for further development into Scandinavian countries. Estonian tax system is favorable for business development, as far as the profit, refinanced in business and undistributed into dividends, is not subject to income tax.

Main requirements for company registration in Estonia (LLC, Estonian – OÜ):

• Minimum 1 director (board member) must be in Estonian company
• Board member of Estonian company must be a private individual
• Board member of Estonian company may be a resident of any country
• Minimum number of founders (shareholders) in Estonian company is 1
• Both private individuals and legal entities from any country may be shareholders of Estonian company
• The amount of registered share capital in Estonia is 2500 EUR (in certain cases such registered capital is not required to be paid before registration of the company)
• The registered (legal) address of Estonian company must be in Estonia.

If necessary, UniverseLAW will provide you with a legal address.

• No undistributed profit taxation
• No taxation for salary paid to a nonresident of Estonia, if such nonresident’s place of business is not in Estonia
• No inheritance tax
• No real estate tax
• No capital gains tax
• No hidden taxes

For today, Estonia is an unprecedented EU jurisdiction concerning taxation. Estonia may be undoubtedly defined as an “onshore”, where the companies are subject to a 0% income tax.

Obtaining a taxpayer status (VAT number)

Similar to Latvia and Lithuania, in order to obtain a taxpayer status (VAT number), it is obligatory to submit information regarding future business partners and provide project agreements with potential business partners. In most cases it is required to arrive to Estonian tax office in person for the interview.

Taxes in Estonia

Social tax rate is 33%

Tax (VAT) reports must be filed on a monthly basis, until the 20^th day of every month. Reports on the company’s business activity must be filed on a yearly basis.

Required documents:

• International passport of the founder;
• International passport of the board member;
• Excerpt from the official companies registry from the country of registration and memorandum and articles of association of the company, which is a founder of the Estonian company (both the excerpt and memorandum must be properly legalized)

Time required for company registration: 5 working days.