If you are ready to start your business in Estonia, it is time to incorporate your company.
According to Estonian business laws, there are five kinds of company you can incorporate:
- Private limited company;
- Public limited company;
- Limited partnership;
- General partnership;
- Commercial association.
Alternatively, you can be a sole trader (FIE or sole proprietor), with the clause that if your turnover is higher than 40,000 euros you have to register as a VAT payer.
The most popular form of company is the OÜ, i.e.: the private limited company.
What is an OÜ company
A private limited company is only liable for a fixed sum, which is the share capital. Shareholders are not personally liable.
The minimum share capital required by the law is 2,500 euros. For share capitals of up to 25,000 euros, shareholders can decide to pay their share immediately or at a later time, however, until they pay their share, they will be personally liable for the obligations of their company.
Shareholders can nominate the members of a management board who will be made of individuals who will legally represent the company. Members of the management board do not have to be shareholders as well.
If more than half of the management board members do not live in Estonia, the company must appoint a representative who permanently resides in the country.
The incorporation of a private limited company
First of all, in order to incorporate an Estonian company, you have to be either an Estonian resident or an e-resident.
If you meet this requirement, the next step is reserving your trading name.
Just like any other bureaucratic procedure in Estonia, this is simple and can be done online: all you have to do is submit your application with at least three name proposals. The order does matter: put your favourite on top.
Once your application is approved, you will receive a reservation certificate from the Companier Register. You will need this document for the incorporation.
Another requirement is the address: you need an Estonian address. It can be a property you own or rent or a virtual office. Of course, we can help.
Once you have all the necessary documents, you can go on with the incorporation of your Estonian company in two ways:
- The traditional way, with an Estonian notary;
- The digital way, entirely online.
If you opt for the traditional way, you have to appoint an Estonian notary in order to file the petition to the Commercial Register. The notary will read and approve your document and will submit your request.
If you can not do it with a notary, a legal firm with power of attorney can follow the incorporation for you.
This procedure usually takes up to five days.
If you choose the digital way, the whole process can be done online and all the documents can be uploaded and will be verified automatically.
In this case, the incorporation of the company only takes up to two days.
Obviously, in both cases we can provide assistance in any phase of the process.
Opening a business in a country you do not know, even if it is as avant-garde as Estonia, can be difficult. Every jurisdiction has its peculiar rules and regulations, after all. We can take care of the incorporation of your Estonian company while you focus on getting ready to do business.
Contact us for more information.