Company Registration in Estonia

Company Registration in Estonia

Estonia

Estonia is part of the European Union and the Eurozone, as well as a member of NATO. The official language is Estonian. 

Estonia has signed over sixty agreements on avoidance of double taxation prevention treaty. 

The corporate tax rate is 20%, but the tax applies only to distributed profits. That is, if the company’s profit is reinvested, the tax is not paid. 

Since 2019, a reduced rate of 14% on the distribution of 1/3 of dividends come into force. 

In addition, it is possible to obtain e-residency in Estonia, offering the following opportunities: 

  • sign documents and contracts by electronic signature
  • verify the authenticity of signed documents 
  • register companies in Estonia 
  • remotely manage the company 

It is planned in the future to make possible an opening of a bank account remotely for e-residents. 

Today, in order to open a Bank account and meet with representatives of revenue service, a visit to Estonia is required. 

VAT can be registered in Estonia either when the threshold is reached – if the amount of taxable supplies exceeds 40 000 Euros, or by applying for voluntary registration. To do this, the documents, justifying the application for registration of VAT must be submitted to the revenue service. For nonresidents doing business in Estonia, the liability to register for VAT arises from the moment of the first taxable supply. 

Estonian companies must keep accounting records, prepare and submit annual financial statements, as well as submit VAT returns to the revenue service.