COMPANY FORMATION IN ESTONIA

Estonia’s economy has boomed in recent years as it has pursued a liberal business agenda in preparation for EU membership which was achieved in 2004. Estonia is in Euro zone since 2011. Peculiar corporate tax system assigns limited companies to pay corporate income tax only when distributing profit, i.e the tax does not apply to accumulated undistributed profits.

POPULAR ESTONIAN COMPANY APPLICATIONS

Estonian Limited Liability Company OÜ is conveniently used for trading purposes. Peculiar corporate tax system assigns limited companies to pay corporate income tax only when distributing profit, i.e the tax does not apply to accumulated undistributed profits.

Key features of Estonian company

1. Income is taxed only upon distribution.
2. EUR-zone convenience.
3. Company is considered to be a resident since incorporation as it is taxed on worldwide income.
4. The minimum share capital for an OÜ (Ltd) is 2500 eur
5. Foreign board members (residing outside European Union) are to have Estonian “contact person” to represent the company at tax offices. EU board members are required to submit to the registrar a residential address, e-mail address and telephone number for communication with tax office.
6. Company formation packages available. Contact us!

ESTOINIAN COMPANY TAXATION

1. CORPORATE INCOME TAX (CIT): The tax applies to an actual distribution of profits by the company, mainly to dividends that have been distributed. The tax payable is at the rate of 21/79 of the actual payment or 26,59%.
2. INCOMING DIVIDENDS: Dividends are treated as regular income and is taxed upon distribution.
3. CAPITAL GAINS TAX (CGT): Capital Gains are treated as regular income and is taxed upon distribution.
4. WITHHOLDING TAX: As Corporate Tax applies only upon distribution of the profit, there is not separately charged Withholding Tax.
5. VAT. European Union VAT regime. The standard rate for inland sales is 20%.

How to register a company in Estonia?

1. Choose a structure, what is appropriate for your business. Need help? Contact us.
2. To find out more, please contact us.