Company in Estonia OÜ

Legal Services in Estonia Company in Estonia OÜ offers legal services to companies owned by non-residents of Estonia. Legal support of international business is the key to the effective functioning of your company. Legal advice provided by Company in Estonia OÜ is subject to strict confidentiality regarding organisation, documents and information. Professionals of Company in Estonia OÜ will be glad to provide you with detailed information regarding various legal aspects current in Estonia. Some potential topics to be discussed during the consultation: Drawing up legal documents of the company Advice on trade/financial licenses Sale, reorganisation and winding-up of companies Drawing up agreements (loan, purchase and sale, employment, rental) Registration of a trademark VAT and EORI numbers registration We also note that legal advice provided by Company in Estonia OÜ is subject to strict confidentiality regarding organisation, documents and information. We can provide legal advice on: Taxation Corporate law Company structure/establishment of holding company Accounting Options Moreover, our specialists can assist your company and prepare essential documentation such as agreements and contracts. Some examples of documents we help to draft: Company internal rules Individual company charters Proxy texts/ Power of Attorney Legal opinion Company in Estonia OÜ is happy to accompany your project in the necessary legal procedures and can help prepare a legal opinion in Estonia.

Annual Report for an Estonian Company Within six months after the end of the financial year, each company registered in Estonia shall submit an annual report to the Commercial Register. The annual report shall be drawn up in Estonian and in the official currency of Estonia (Euro). Annual reporting is mandatory for all companies registered in Estonia, even for companies that had no activities during the financial year. The annual report shall be submitted within six months after the end of the financial year of the company. Thus, if your financial year ends on December 31, you shall submit the report no later than June 30 of the next year. All accounting procedures shall be completed before drawing up the annual report. Mandatory components of the annual report include the management report on the activities of the company, the balance sheet, the profit and loss statement of the company, and the capital statement of the company. Scroll through the carousel to know more.

Turnover of Estonian Startups Exceeded 1.5 Billion Euros The total turnover of Estonian startups for the three quarters of this year increased by 64% year-on-year to 1.5 billion euros. Estonian startups also attracted record investments – a total of 1.2 billion euros, including 40 transactions worth more than one million euros. In 2021, the total turnover of the startup sector in Estonia amounted to 1.4 billion euros, i.e. in the nine months of this year, startups have already exceeded the last year’s result. Since at the end of the third quarter 2022, the total turnover of startups amounted to 927 million euros, there has been 64% growth year-on-year. The managing director of Startup Estonia, Eva Peterson, said that although global markets are now suffering, Estonian startups continue to grow rapidly. “Estonia has a very good international image, and the foundation that we laid in difficult times over the years is working in our favor“ Peterson said. The highest turnover at the end of the third quarter of this year was posted by Bolt (775.3 million euros), Veriff (50.5 million euros), Swappie 47.6 (million euros), Comodule (27.8 million euros) and Starship Technologies (24.6 million euros). Data on turnover of startup enterprises are based on quarterly data on turnover tax provided by the Tax and Customs Board, which are based on VAT declarations. According to Startup Estonia, 1446 startup companies have been registered in Estonia at the moment, of which 418 or 29% have been operating for five years or more. Estonian startups raised 1.2 billion euros in investments in the three quarters of this year, in a total of 61 deals. The average size of the investment was 19.3 million euros, while 40 investments were worth more than one million euros. A year ago, the volume of funding raised amounted to 870 million euros in 66 transactions, and the average size of the funding transaction was 13.2 million euros, 34 transactions amounted to more than 34 million euros. Startup Estonia is funded by the European Regional Development Fund.

Affiliate/Branch of a Foreign Company in Estonia A foreign business association may register its branch in the Estonian Business Register. The branch is not a separate legal entity, and all responsibility for the activities of the branch and its obligations is borne by the foreign company. In order to open a branch in Estonia, it is necessary that the foreign enterprise select the head of the branch and authorize him to open a branch in Estonia. If the branch has several managers, the branch can represent each of them. The branch should also select an activity according to the Classification of Economic Activities in Estonia. The branch can be registered in the Estonian Commercial Register through a notary or electronically in the electronic business register. A branch of a foreign commercial partnership is entered into the commercial register on the application of the branch manager. The following documents should be attached to the application: Official certificate of the parent company (extract from the business register or copy of the certificate of registration) Permission to establish a branch office if required by law Power of attorney confirming the authority of the branch manager, or copy of the decision on appointment of the manager A copy of the Articles of Association of a Commercial Association or the Agreement of an Association certified in accordance with the laws of the country of the location Communication data (phone numbers, homepage address, e-mail address) Notarised signature samples of executives Documents must be submitted in Estonian and the translation must be certified by a sworn translator. If necessary, documents submitted to the registration department must be certified by an Apostille or legalized. Please contact us and request a consultation from us today

Ready-Made/Shelf Companies in Estonia Ready-made companies are inactive corporate organisations that have passed the state registration and have all the necessary details for the implementation of their activities. Purchasing of a ready-made/shelf company should be a balanced decision in order to protect you from unreasonable risks. Company in Estonia OÜ offers ready-made companies for sale (see table below). It is important to mention that all listed Estonian shelf companies have submitted annual reports and have a transparent history. WHY CHOOSE ESTONIA FOR YOUR BUSINESS Purchase of an Estonian shelf company can be an excellent solution to optimise your business in the European Single Market. Company in Estonia OÜ highlights the following advantages of Estonian jurisdiction when purchasing a ready-made/shelf company: Favorable taxation: income tax – 0% Integration into EU jurisdiction and the European Economic Area (EEA) Online business management using an e-Resident card Low maintenance costs Simplified Commercial Code and accounting rules Lack of exchange controls ADVANTAGES OF A READY-MADE COMPANY IN ESTONIA Company with a history A company with a history will add credibility to your business. The number of years that the company has been on the market can provide advantages in the business projects you carry out. Reputation The established reputation of an enterprise is certainly important when concluding deals, searching for new partners, and can also influence the decisions of potential investors or partners. Trustworthiness A ready-made/shelf company with a history in the business register will contribute to a more professional image and therefore appear worthy of the trust of service providers. Registration complete A ready-made/shelf company already has a registration number and, therefore, on its behalf, you can start a business immediately. Company in Estonia OÜ will be happy to consult and assist you.

Amendments to the Estonian Commercial Code in 2023 Minimum capital requirement for companies to be abolished When establishing a company in Estonia without paying the authorized capital, the current Economic Code does not set a term for making a contribution to the authorized capital, but leaves it to the discretion of the shareholders, which leads to a situation where the authorized capital is not contributed. Thus, a limited liability partnership may be established with a minimum authorized capital (1 euro). Maintenance of the list of shareholders of a private limited liability company in the commercial register From 1 September 2023, the list of shareholders of the limited liability partnership will be kept in the commercial register, which means that the data on the list of shareholders will be registered in the commercial register. Failure to submit the annual report of the Estonian Company The new provision of the Act allows for the imposition of a fine on a legal entity that has not submitted an annual report within the prescribed time limit, without a warning. When imposing a fine, the registrar is given a great deal of discretion, so a fine may be imposed repeatedly until the annual report of the Estonian company is submitted. Possibility of entering an entry in the commercial register at a certain date From 1 January 2024, companies will be able to reserve one brand name for up to six months. When reserving the brand name, it is necessary to specify the scope of the company for which the brand name will be used, as well as the organizational and legal form of the company, which cannot be changed in the future when reserving. Reinstatement of a person from the Estonian Register Under the changes in force, the registrar may remove a legal person from the registry in a simplified and faster manner than before, for example, in the case of failure to submit an annual report or absence of a contact person. If you have any questions, please contact us.

Taxes in Estonia in 2023 Tax rates in Estonia in 2023 will remain the same as in 2022, and this can be considered a great achievement of the Estonian government, since in most other Euro countries tax rates will be increased due to the increased level of inflation Turnover tax Turnover tax rates: 20%, 9% and 0% Income tax Income tax rates: 20%; 14%, 10%, 7%, 0%, 20/80, and 14/86 Social tax Social tax rate 33% Unemployment insurance payments The unemployment insurance payment rate in 2023 will be 1.6% for an employee and 0.8% for an employer. Contribution to the funded pension The funded pension contribution rate is 2%. The funded pension taxation payment applies to residents of Estonia who are obliged or voluntarily joined the second stage. Payment is made by withholding the payment amount from the employee’s payment amount by the employer. Excise taxes Estonia has established excise taxes on alcohol, tobacco products, fuel, and electricity, as well as on packaging. It is planned to increase the excise tax on tobacco and tobacco products by 5% in 2023. Land tax The land tax is paid by the owner of the land or the user of the land in the cases specified in Article 10 of the Law on Land Tax. The amount of land tax depends on the current local government land tax rate and the land value. Heavy vehicle tax The accountants and tax consultants of Company in Estonia OÜ will be happy to advise you on tax issues related to your Estonian company and provide accounting services in Estonia

Permit / License for Crowdfunding Activities in Estonia In line with the rationale for the Regulation, crowdfunding is increasingly an alternative means of financing for startups and small and medium-sized enterprises. Crowdfunding is considered a good opportunity to improve the availability of financing, and it has also become one of the opportunities for financing the entrepreneurial activities of individuals and legal entities. Such financing is provided via online platforms, and funded projects usually attract a large number of private and corporate investors. This includes startups that often raise the necessary funding through crowdfunding In December 2021, the provisions of the Securities Market Act that apply to crowdfunding service providers within the meaning of the Regulation entered into force. These provisions foresee that crowdfunding service providers will be under the supervision of the Estonian Financial Supervisory Authority (FSA) The procedure for processing a crowdfunding permit application is similar to that for other areas of the financial sector. An entrepreneur applying for a crowdfunding permit must collect the required information and submit it with the application to FSA. One important difference is the timing of the so-called preliminary assessment of the application Currently, more than 400 Estonian companies are providing crowdfunding services. The experts of Company in Estonia OÜ will assist you in setting up your company in Estonia and can support you in preparing documents for filing an application and obtaining permission for crowdfunding activities in Estonia.

Financial Licenses in Estonia Filing an application and obtaining a financial licence is a consistent procedure established by law, requiring strict compliance with specific formal and material requirements arising from the relevant legal acts It should be considered that in the case of financial activities, obtaining a license is mandatory regardless of where the Estonian company operates. The necessary financial permit must be obtained in the country of registration in order to avoid possible complications and fines from the regulator in the future An application to obtain a financial licence is considered by the regulator from 60 to 180 days from submitting all necessary documents. An initial response to accept your application will be received no later than three working days after its submission If the circumstances under which the financial licence was issued have changed, the regulator must be notified at least 30 days before the planned changes. Company in Estonia OÜ can provide full legal support for obtaining a financial licence in Estonia and advise on all requirements established by law for the applicant company. Our lawyers will prepare and submit to the regulator an application with all supporting documentation necessary for the successful completion of the licensing procedure.

Advantages of Establishing a Company in Estonia 0% company income tax (tax on retained earnings). Founders and Board members may be non-residents of Estonia (there is no need to have a local Director). There is no mandatory condition to pay a salary to the company’s director and there are no salary requirements. There is no need to contribute the authorised capital when establishing a company. Possibility of fully remote management of the company if the owner has an e-Resident card. In case of doing business in Estonia, a Board member has the right to apply for a residence permit for up to 5 years. Possibility to purchase transport and real estate in the ownership of an Estonian company without taxes. Estonia has entered into the Convention for the Avoidance of Double Taxation with 62 countries. Estonia has a transparent and clear tax system without progressive taxes. The team of Company in Estonia OÜ will be happy to provide all the necessary information and help with the establishment of a company in Estonia in the shortest possible time.