Estonia is a small nation-state situated in Northern Europe. Despite its size, the country has managed to build a strong and stable economy, making it an attractive destination for businesses. The business climate in the country is favorable, with a low tax rate and a highly skilled workforce.
In Estonia, establishing a company is comparatively simple and easy. The nation’s trade registration procedure is simplified, and the authorities offer several incentives to promote entrepreneurship. Furthermore, it has a strong digital infrastructure that facilitates firm operations online. Continue reading to find out more about starting an establishment and registering a firm in the nation.
Laws regarding company registration
Estonia is a modern, forward-thinking country that has established a comprehensive set of laws and regulations for registration.
The primary law governing firm registration in the nation is the Commercial Code. This code outlines the legal requirements for registering a company, including the types of business entities that can be registered, the procedures for registering a syndicate, and the requirements for maintaining a firm’s legal status.
In addition to the Commercial Code, the government has also created several other laws and regulations to ensure that businesses are compliant with the country’s laws. These include laws regarding taxation, accounting, and business operations.
Types of corporate structures
In Estonia, there are three types of corporate structures: sole proprietorship, private limited firm, and public limited firm.
Sole proprietorship
The sole proprietorship is the simplest type of corporate structure. It is owned by a single person who is responsible for all the firm’s debts and obligations. This type of corporate structure is suitable for small businesses with low risk and low investment.
Private limited company
A private limited company is the most common type of corporate structure. It requires at least one shareholder and a minimum share capital of 2,500 euros. The accountability of the stockholders is restricted to the sum of their shares.
Public limited company
A public limited corporation is the most complex type of corporate structure. It requires at least one shareholder and a minimum share capital of 25,000 euros. The responsibility of the investors is restricted to the number of their assets.
10 steps to registration
Company registration in Estonia involves 10 main steps that must be followed.
- Choose a unique name for the company and reserve it with the Commercial Register.
- Draft the articles of association.
- Appoint a management board.
- Open a bank account for the enterprise and deposit the minimum share capital.
- File for taxes with the Tax and Customs Board.
- File for social security contributions with the Social Insurance Board.
- Obtain any necessary licenses or permits for the corporate’s activities.
- File the employees with the Estonian Tax and Customs Board.
- File the syndicate with the Commercial Register.
- Obtain any necessary business insurance.
Requirements for registration
To be registered, a corporation must have a legal address in Estonia. This can be either a physical address or a virtual address provided by a service provider. Secondly, the firm must have at least one shareholder and one director. The director must be a natural person and can be of any nationality, while the shareholder can be either a natural or legal person.
In addition to these main requirements, several other steps must be taken to file a firm in the country. These include submitting the necessary documents to the Business Register, obtaining a tax ID number, and registering for VAT if necessary. It is also important to note that the registration process can be completed entirely online, making it quick and convenient for those looking to start a business in the nation.
