Learning About Company Incorporate in Estonia

Sitting in the Northern part of Europe, Estonia is a small country that has over a million people. Make no mistake in thinking that it is tiny – this country has a thriving economy and is a popular destination for startups and entrepreneurs. Thanks to its strategic location, tax-friendly environment, and robust e-government infrastructure, Estonia has become an attractive choice for individuals looking to establish their companies. If you are looking into starting a company in Europe, Estonia might just be the right place for you.

Known for its innovative and entrepreneurial spirit, this country has a strong startup ecosystem. Plus, there are several government programs and initiatives that support entrepreneurs. In this article, we will explore in depth how Estonia offers a conducive business environment and outline the process of incorporating a company in the country.

 

The Benefits of Incorporating a Company in Estonia

Thriving Economy

Estonia has experienced significant growth and development since gaining independence, back in 1991. The country has successfully transitioned to a market-based economy, attracting both domestic and foreign investments.

Strategic Location

Estonia’s geographical location in Northern Europe provides strategic advantages. It serves as a gateway between East and West, offering access to both European Union (EU) and non-EU markets. This makes Estonia an attractive base for companies looking to expand their operations across Europe and beyond.

Tax-Friendly Environment

Estonia has implemented a unique tax system known as the “Estonian model” or “E-residency.” It features a simple and transparent tax regime, including a corporate income tax on distributed profits and a progressive personal income tax. The system encourages entrepreneurship and investment by offering favourable tax rates and incentives.

Robust E-Government Infrastructure

Estonia is renowned for its advanced e-government infrastructure. The country has embraced digitalisation and offers a wide range of e-services, including digital signatures, e-residency, and online business registration. This efficient and streamlined e-governance framework facilitates company incorporation and other administrative processes.

Startup Ecosystem

Estonia has cultivated a vibrant startup ecosystem, fostering innovation and entrepreneurial activity. The country has produced several successful startups, particularly in the fields of information technology, e-governance, and fintech. Supportive startup programs, accelerators, and incubators provide valuable resources and networking opportunities for aspiring entrepreneurs – like yourselves.

Government Programs and Initiatives

The Estonian government has implemented various initiatives to support entrepreneurs. These include grants, funding programs, and business development support. The government’s proactive approach to creating a favourable business environment has contributed to Estonia’s reputation as a startup-friendly nation.

 

What Are the Types of Companies Available Here?

In Estonia, two main types of companies can be incorporated: Osaühing (OÜ) and Aktsiaselts (AS). OÜs are limited liability companies, where the shareholders’ liability is limited to their investment in the company. This means that the shareholders are not personally liable for the company’s debts. OÜs are the most commonly chosen company type in Estonia.

On the other hand, ASs are public limited companies, with their shares being traded on a stock exchange. While less common than OÜs, ASs offer the opportunity for public trading of shares. The different ways to incorporate a company in Estonia. You can incorporate a company in Estonia online, through a notary, or with an e-Residency.

 

What Are the Steps Involved in Incorporating a Company in Estonia?

Here are a few steps to start your journey to company incorporate in Estonia:

Pick a Name for Your Company

The first step is to choose a company name. The name must be unique and cannot be the same as any other company name that is already registered in Estonia. You can check the availability of a company name on the Estonian Business Register website.

Reserving the Name

Once you have chosen a company name, you need to reserve it with the Estonian Business Register. This will prevent anyone else from registering the same name. You can reserve a company name online or by mail.

Drafting the Articles of Association

The articles of association are the governing documents of your company. They set out the company’s purpose, structure, and rules of operation. For reference, you can find a template for the articles of association on the Estonian Business Register website.

Appointing Directors and Shareholders

You need to appoint at least one director and one shareholder for your company. The directors are responsible for the management of the company, and the shareholders are the owners of the company.

Register the Company With the Estonian Business Register

Once you have completed all of the above steps, you need to register your company with the Estonian Business Register. This is the final step in the process of the company incorporate in Estonia.

The time it takes to incorporate a company in Estonia really varies depending on the method you choose. The fastest way to incorporate is online, which can take as little as one full working day. If you choose to incorporate through a notary, the process will take about five working days. And if you incorporate with e-Residency, it will take up to seven days to complete a company incorporate in Estonia.

It is important to note that these are just estimates. Therefore, the actual processing time may take longer, depending on the workload of the Estonian Business Register.

 

Other Helpful Resources to Look Into

In Estonia, the government provides various resources through official websites such as the Estonian Business Register, the Estonian Ministry of Economic Affairs and Communications, and the Estonian Chamber of Commerce and Industry. These websites serve as valuable sources of information regarding registered companies in Estonia. They also offer guidance on the necessary steps involved in incorporating a company, such as selecting and reserving a company name, drafting the articles of association, appointing directors and shareholders, and ultimately registering the company.

 

How We Can Help You

We at 3E Accounting are here to expedite the company incorporation process for you! With our experienced team of experts, we have overcome numerous obstacles and challenges in the industry. Let us assist you in setting up your company while you focus on your core competencies. Start your entrepreneurial journey today by contacting us today!