According to the Commercial Code, there are five forms of business entities in Estonia:
In addition to the possibility of establishing a business entity, it is possible for any natural person to conduct business as a sole proprietor who must be entered in the Central Commercial Register before commencing with permanent business activity.
Foreign companies can also offer their goods or services by establishing a branch. The branch must be registered in the Estonian Commercial Registry by submitting an application and other required documentation. It should be considered that a branch is not a business entity and the foreign enterprise is liable for obligations arising from the activities of the branch.
Most common forms of business entities in Estonia are private limited company (OÜ) and public limited company (AS). Detailed information about other company types is available in the Commercial Code.
Holders of an Estonian ID card or e-Residency card and a growing number of holders of EU member states’ ID cards can establish a private limited company fully online. If an ID or e-Residency card is not available, a visit to a notary in Estonia is needed to verify the foundation documents.
Establishing a private limited company is as easy as ABC:
You will have to register the company through a notary if:
Remote authentication and facial recognition
Remote authentication enables the conduct of notarial acts via a video bridge created between the notary and the customer. Such authentication is equivalent to authentication at a notary’s office. Remote authentication is an opportunity, not an obligation.
In order to conduct an act by using remote authentication and be given the relevant advice, you should first contact a notary’s office. You can also carry out the required act via the self-service portal of the Chamber of Notaries at iseteenindus.notar.ee (EE). A Republic of Estonia ID card, digital ID, mobile ID, or e-Residency card can be used to log in to the portal and to sign documents to be authenticated.
At the same time, it is possible to establish a company in Estonia by authorizing a representative abroad who can come to a notary in Estonia, or if the representative has a digital identity card issued by the Republic of Estonia, he or she can establish the company via remote authentication.
Though the process is fairly simple, there are also several private companies that can help you through all the steps. A list of companies offering company registration services is available here. If using e-Residency, you can also turn to a more specific step-by-step guide aimed at e-Residency users.
* – minimum time needed to complete the process of registering a company and receive a confirmation; actual registration times may vary. When registering with the help of a notary, a delay of up to 3 days is expected and a notary fee has to be paid.
At the end of each financial year, an accounting entity is required to prepare an annual report that consists of the annual accounts and the management report. The auditor’s report (if compulsory) and the profit distribution proposal for the financial year should be annexed to the annual report. The financial statements have to be audited for all public limited companies and foundations. All 350+ certified auditors are members of the Board of Auditors.
Annual report should be filed at the Commercial Register within six months after the end of the financial year.
Almost all Estonian companies can choose whether to prepare their consolidated and annual accounts in accordance with International Financial Reporting Standards or in accordance with the Estonian accounting standards.
e-Financials is a simple web-based accounting software that assists companies to manage their book-keeping themselves. The software is located in the Company Registration Portal and both entrepreneurs and authorized persons (e.g. accountants) can use it.
Estonia is the first country to offer e-Residency, a government-issued digital ID available to anyone in the world. E-Residency offers the freedom to easily start and run a location-independent business online using the convenient digital business services of Estonia.
The digital ID card and e-services are built on state-of-the-art technological solutions, including 2048-bit public key encryption and a two-stage PIN system. The digital ID card is not a physical identification or a travel document and does not display a photo.
The average number of startups in Europe is 5 per 100,000 people. Estonia ranks 6 times higher than the European average, taking the third place in Europe.
Below is an overview of the advantages of starting up in Estonia by Startup Estonia, the organization taking care of the startup ecosystem. Contact them if you have any questions or simply take a look at the Estonian startup database to find possible partners.
These websites can be useful when planning to establish a company:
Request e-Consulting for more specific information.
What is it like to run a business in Estonia? How to benefit from the e-solutions and the efficiency of our business culture? What are the opportunities in specific sectors? Who to partner up with?
The Estonian Investment Agency’s team is happy to help you via its complimentary e-Consulting service, organize online or offline follow-up events such as virtual investment visits and guide you through the fairly simple process of investing in Estonia.