How to set up an OÜ Company in Estonia

The OÜ company in Estonia is a legal structure that allows owners to separate personal assets from business risks. In other words, the shareholders are not individually accountable for the company’s obligations. An OÜ company in Estonia can be established by anyone, both Estonian resident and non-Estonian resident. The biggest advantage of running company in Estonia is no corporate income tax on retained and reinvested profits. It is also worth noting that companies registered in Estonia are considered transparent and trustworthy by the Estonian authorities.

Shareholders and board members of OÜ company in Estonia

There are currently no restrictions on the number of shareholders in OÜ company in Estonia, although at least one founder is required to establish a company in Estonia. The stakeholders of a company may include people from outside Estonia. Same applies to the board, which must consist of at least one member. It also may comprise both shareholders and people who are not affiliated with the company in Estonia. If a given person performs the function of a board member solely on the basis of a resolution of appointment, he or she is not covered by obligatory social and health insurance in this respect.

If the company in Estonia intends to increase or decrease its capital, amend its articles of association or appoint a new board member, it should hold a general meeting of shareholders. We would like to emphasize that the crucial decisions for the company should be made in Estonia, so that the national tax authorities have no doubts about its actual tax residency.

Share capital of the company in Estonia

When it comes to OÜ company in Estonia the minimum share capital is 2.5 thousand euros and it has to be paid up in full. It is quite an advantage when the shareholders are natural people because the deadline for paying up the capital is extended to 10 years or when the first dividend is paid.

The registration as a VAT taxpayer

According to Estonian tax law, a company in Estonia is required to register as an active VAT payer when the turnover exceeds 40 000 euro. There is also a possibility to register as a VAT taxpayer from the beginning of the Estonian company’s operations, which is widely used by entrepreneurs.  It is worth mentioning that the VAT refund does not entail obligatory tax office inspection and takes place within a few days.

Ways of establishing a company in Estonia

People who want to start a company in Estonia, without travelling there, can use two ways of registering company in Estonia. One of them is the establishment of a company by e-residency card. Second one, registration by power of attorney given to e.g. a law firm. Irrespective of your choice, establishing a company in Estonia with our help is a relatively easy process and allows to avoid additional costs associated with traveling to Tallinn. The most important factors are time of registration and company structure.

• Registering a company in Estonia by power of attorney

If you want to set up a company in Estonia quickly, choose power of attorney. This process, from the moment we are granted the power of attorney to register the company in Estonia, takes a maximum of two weeks when you choose our law firm. It is also the only way (except personal visit to Tallinn) which allows to register the company OÜ in which shareholders are the legal persons.

• Registering a company in Estonia by e-Residency card

This solution is beneficial for people who want to set up a company but are not in a hurry. The average time to register a company in Estonia in this way is usually 30 to 40 days. All this is related to the process of applying for an e-resident card. It is important that the card must be picked up in person at the Estonian Embassy. E-residency program allows entrepreneurs manage their companies in Estonia 100% online.

>> You can read more about Estonian e-Residency programme here <<

Register address and Contact Person for a company in Estonia

Every OÜ Company in Estonia must have its register address upon registration. It can be a virtual office. In accordance with Estonian law, every company registered in Estonia, the shareholders or management board members of which are not Estonian residents, must use authorised contact person services. Only a notary, advocate, law office, sworn auditor, audit firm may be design a Contact Person. As a Thompson&Stein we hold a licence for provision of Contact Person services issued by the Financial Supervision Authority in Estonia.