Company in Estonia

Types of companies

In Estonia, it is possible to register companies of any legal form. However, for foreign investors, two types of companies may be of particular interest:

✓ Limited Liability Company (OU)

✓ Public Joint Stock Company (AS)

In practice, most companies are registered as limited liability companies. However, the law allows for the reorganization of a limited liability company into a public joint stock company and vice versa.

Company Registration

When registering a company (OU), in which the sole member of the board will be a non-resident, it is necessary to have a contact person in Estonia to receive the relevant documents from government agencies after the company is registered. Company registration usually takes no more than 7 days.

The following steps are used to register a new company:

• Preparation of documents indicating the necessary information (company name, types of company activities, legal address of the company, personal data of shareholders/managers), as well as the company's articles of association;
• Opening a special bank account and depositing the company's authorized capital into this account (in the case of making a non-monetary contribution, a corresponding agreement is drawn up, and a bank account is not opened);
• Notarization of the necessary documents;
• Submission of documents for company registration to the registration service.

It is possible to register a company by proxy without the presence of shareholders.

Authorized capital

For an OU, the minimum authorized capital is EUR 2,500, and for an AS – EUR 25,000. When registering an OU, direct actual contribution of the authorized capital is not mandatory; it can be contributed later (but must be made before the payment of dividends). Contribution of capital in non-monetary form is also permitted.

If the company's authorized capital exceeds EUR 25,000, and (i) the non-monetary contribution exceeds 1/10 of the authorized capital, or (ii) the sum of all non-monetary contributions exceeds 1/2 of the authorized capital, the results of the assessment of such non-monetary contributions are verified by an auditor.

Requirements for the management/owners of the company

The minimum number of shareholders for both an OU and an AS is one. There are no restrictions on non-resident shareholders. The minimum number of directors (members of the management board) is also one. Only natural persons can be directors.

Half of the total number of directors (members of the management board) must be residents of countries that are members of the EU or EEC. If this ratio is not met, the company appoints a contact person residing in Estonia, who is authorized to receive documents and correspondence from government agencies.

Information about directors (members of the management board), together with the annual financial statements registered with the registrar, is freely available. Information about shareholders is also publicly available. However, information about the company's beneficiaries (if they differ from its shareholders) is not disclosed.

Opening a company bank account

If funds are deposited as share capital into a special account, such an account can be activated after the company is registered, which will allow the company to use it as a settlement account.

As a rule, the procedure for opening a bank account in Estonia for a legal entity whose beneficiary is a non-resident of Estonia is longer than in the case of an Estonian beneficiary. Thus, for a company with a resident beneficiary, it takes one to two days to open an account, and for a company with a non-resident beneficiary, it may take 7-10 days.

An Estonian company has the right to open bank accounts abroad. In some banks, bank accounts can be opened remotely.

Liquidation of a company

Before liquidation, the company must notify its creditors (a notice of liquidation is published in the official printed publication), who are given 4 months to present their claims against the company. The company is also required to undergo a tax audit to ensure that there are no outstanding debts. As a rule, liquidation of a company takes at least 6-8 months.

Residence permit

After establishing a company in which at least 65,000 EUR is invested and which operates for at least four months, the founder, upon fulfilling certain other requirements (having a place of residence, a diploma, a business plan, etc.), has the right to obtain a temporary residence permit in Estonia (residence permit or RP).

A residence permit is issued for a period of up to 5 years. The period for reviewing documents for issuing a RP is no more than 4 months. The number of permits issued to foreigners is subject to a quota (in 2014, the quota was about 1,000 people).