In Estonia, a business establishment is not a big thing. This country is being 99% digitalised; therefore, the process of company formation and development is as simple as it could be.
Numerous advantages — favourable tax system, friendly environment, talent pool, fintech opportunities attract entrepreneurs from around the world, and thus they face a choice — to what legal entity to choose.
According to the Commercial Code, there are 6 forms of business in Estonia:
- Limited Liability Partnership or Private Limited Company (OÜ)
- Public Limited Company (AS)
- General Partnership (TÜ)
- Limited Partnership (UÜ)
- Commercial Association
- Sole Proprietor (FIE)
Foreign companies can also offer their goods or services by opening a branch in Estonia. It should be noted that the branch is not a form of entrepreneurial activity, and the foreign company is fully responsible for the obligations arising from the activities of the branch.
Limited Liability Partnership (OÜ)
- The most common type of legal entity in Estonia
- Minimum share capital 2,500 EUR
- Ruled by management board (at least one member)
- Shareholders are not personally liable for the obligations of such a company
- Perfect for small to medium-scaled businesses
- Set up online (Estonian citizens or e-Residents)
Public Limited Company (AS)
- Minimum share capital of 25,000 EUR
- Must have management and supervisory board and an auditor
- Works for large-scale businesses
- Ability to attract a wide range of shareholders
- Possibility of listing the company on the stock exchange
- Shareholders are not personally liable for the obligations of a PLC
- Cannot be registered online but at a notary
General Partnership (TÜ)
- No minimum for share capital
- Based on the association agreement concluded between partners
- Board members are liable for all assets
- All partners share an equal amount of responsibility
- Does not require notarisation or registration to the Commercial Register
Limited Partnership (UÜ)
- At least one general shareholder and one limited shareholder
- General partner will be solely responsible for the legal obligations of the company
- The limited partner is liable up to the amount of the investment
- Establishment online or through a notary
Commercial Association (Tulundusühistu)
- Company aimed at supporting and promoting the economic interests of its members
- No minimum share capital
- If there is no personal liability of the members, the amount of the authorised capital is at least 2,500 EUR.
- At least two founders
- Registration only through a notary
Sole proprietor (FIE)
- Individual entrepreneur
- There are no requirements for the minimum amount of capital
- Individual entrepreneurs are not required to have articles of association
- Simple registration (online or at a notary)
- Bank account and an Estonian legal address required
- No need to draw up a memorandum or articles of association
Whatever business form suits you best — Service will be happy to consult and assist you.