[vc_row][vc_column][vc_column_text]According to Treasury Minister Kate Pentus-Rosemannus, the income tax rate could be reduced to between 13 and 15 per cent, with all income tax going to local governments. The Minister asserts that this will help to reduce taxes on labour and facilitate local government funding for care.
Pentus stated that labour taxes in Estonia are too high, but at the same time health and social costs have to be covered in an ageing population.
“This can be done by reviewing the tax system as a whole, rather than pecking individual taxes,” wrote by Pentus-Rosemonnus in social networks. The care and funding of older persons is a major concern. As Pentus-Rosemonnus noted, instead of proposing a tax to pay for care services, the problem had to be addressed before the collapse of the second pension.
“Financing care services is only a part of the growing costs of social services and health care associated with population ageing and requiring a holistic approach”, she noted.
According to the Minister of Finance, it would be possible to finance the care service by increasing the share of income tax paid to the local government at the taxpayer’s place of residence, while eliminating the share paid to the State.
“We could discuss how to increase the income base of local governments so that they can provide their people with care for the elderly and cover the growing burden without introducing a new tax. One option – to increase the income of local governments through the State’s share of income tax” – explained Pentus-Rosemannus.
Pentus-Rosemannus also believes that with rising health-care costs, in addition to revising the tax system, there is a need to increase investment in mental health.
LKS Consult OÜ provides accounting services and legal advice on taxation. Please contact us and present your enquiry.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]In the first quarter of 2021, Estonia’s gross domestic product (GDP) increased by 5.4% compared to the same quarter of the previous year. In current prices, GDP amounted to 6.9 billion euros in the first quarter, the Department of Statistics reported on Monday. Compared to the first quarter of last year, GDP, adjusted by the number of days worked, increased by 5 per cent and by 4.8 per cent compared to the last quarter of 2020.
According to analysts, almost half of the growth of the economy is due to the influence of taxes, especially the turnover tax (value added tax) and good excise revenues. “However, this does not mean exceptionally high tax receipts, but that the comparative base of the first quarter of last year was unusually low. Now we are back to the level of 2019,” explained Robert Muirsepp, the lead statistician of the Department of Statistics.
Trade, information and communication, as well as financial and insurance activities, had the most positive impact on economic growth. As with taxes, the positive impact of trade is visible against the backdrop of the recession that occurred at the same time last year. Coronavirus expenditures in the health sector and the energy sector in the colder winter also contributed to the growth of the economy.
Among the major industries, the manufacturing and construction sectors continued to have a negative impact on the economy, with coronavirus crisis a little later. Accommodation and food services were also in decline due to coronavirus restrictions.
Private consumption continued to decline throughout the year, with a decline of 3.3 per cent in the first quarter. Excluding the costs associated with tourism, consumption showed modest growth. As in previous periods, there was an increase in expenditures related to home lifestyles, communications, home furnishings and household goods. Expenditure on meals outside the home, leisure, transport, clothing and footwear continued to decrease. At the same time, spending on health increased, which was also supported by growth in the government sector.
In foreign trade, growth started late last year and continued in the same direction. Merchandise exports increased by 5 per cent and imports by 12 per cent. Imports and exports of wood products, electronics and motor vehicles contributed to the increase in trade. In services, computer services have had the most positive impact. External trade in tourism services continued to decline, but transport services are gradually recovering.
An investment fund (AIF) is a specially constituted entity whose assets can be invested in accordance with a predetermined investment policy. The purpose of an investment fund is to generate profits from the investment of its assets.
AIF is the most convenient structure for collective investment. Investors’ assets are attracted to their further use and placement in their interests following a predetermined investment policy under the company’s guidance that managed the fund.
An Alternative Investment Fund is the best solution for making collective venture capital investments and organizing investor funds in stocks, bonds, commodity indices, derivatives, currencies, cryptocurrencies, real estate, and other financial assets.[/vc_column_text][/vc_column][/vc_row][vc_row height=”auto” css=”%7B%22default%22%3A%7B%22padding-bottom%22%3A%2240px%22%7D%7D” bg_type=”bg_color” bg_override=”full”][vc_column][vc_column_text el_class=”padding”]
Requirements
An investment fund in Estonia requires two structural units — the fund itself as a holder of property assets and the fund manager — the legal entity that manages one or more funds.
Fund manager
The fund manager manages the assets of a fund company or a contractual fund. It is important to note that one management company can manage several funds.
It is required to obtain a license to operate as a fund manager in a management company. Fund managers who want to manage euro funds and large-scale alternative investment funds also need to obtain a license.
In a small fund, a fund manager should apply for an operating licence as a small fund manager or register its activities with the Estonian Financial Supervision Authority (EFSA). This kind of manager can only manage non-public investment funds, meaning their business is primarily aimed at professional investors.
If a small unlicensed fund management company does not wish to apply for a licence as a small fund manager, they have to register their activities with EFSA. EFSA’s supervision over registered unlicensed small fund managers is limited to the registration and later data collection.
The decision by EFSA is usually made within two months of documents submission.[/vc_column_text][/vc_column][/vc_row][vc_row height=”auto” css=”%7B%22default%22%3A%7B%22padding-bottom%22%3A%2240px%22%7D%7D”][vc_column][vc_column_text el_class=”padding”]
Fund types
There are several types of funds. The type of investment fund chosen depends on the activity, the target investors and the amount of capital raised/assets managed:
A joint-stock fund (aktsiaseltsfond) — a fund established as a joint-stock company, its property cannot be divided into structural elements (sub-funds)
participation in the fund in the form of ownership of shares
can be closed and open
limited scope for stock types and securities (no predominant shares, no debt receipts)
upon establishment — the management and deposit contract is signed. The charter is agreed with FIE
includes shareholders, board members and the council.
Contract fund (lepinguline fond) is a legal entity, the holder of property assets, which is formed from payments received by the sale of shares or other property or funds/property from investments and which belongs to the holder of the shares. The assets of the fund can be divided into structural elements, each of them must have a different investment policy (relevant if the fund consists of different types of property – real estate, securities, other assets).
An investment prospectus is obligatory
the fund cannot be reorganized into another fund
the shareholder can always demand the redemption fund
shares may contain different specific conditions (e.g. right of exchange, terms of ransom, voting rights, etc.)
upon establishment – the fund manager and the depository shall be specified. The charter shall be agreed with FIE
ruled by the meeting of the owners.
The limited partnership fund (usaldusfond) can manage its property or enter into a management agreement with the fund manager. Only a fund manager who is licensed to operate under the Investment funds act can act as a limited manager of a limited partnership fund or a general partner of a limited partnership fund that manages its assets.
The share in such a fund is freely alienated unless the agreement states otherwise. Equity holders should contribute to the fund.
The Estonian Real Estate Area provides fund managers with the possibility to organize the collection of investments and further management of collective assets within the framework of the simplified regulation of the manager of small alternative funds (small alternative fund manager). This regime makes it easy to create an investment fund in Estonia and allows partners to form flexible relations between themselves within the framework of the limited Partnership Agreement «LPA». The small alternative fund manager has the right to control several funds. Still, the total assets of the managed funds may not exceed €100 million, or in the case of investments of long duration (from 5 years or more) and no financial gain is used (credit arm), the total assets of the funds can reach 500 million euros.[/vc_column_text][/vc_column][/vc_row][vc_row height=”auto” css=”%7B%22default%22%3A%7B%22padding-bottom%22%3A%2240px%22%7D%7D” bg_type=”bg_color” bg_override=”full”][vc_column][vc_column_text el_class=”padding”]
Registration process
As we already mentioned, cryptocurrency fund registration is not a difficult process. It consists of the following steps:
Registration of the alternative fund management company, the fund manager (AIFM). You can easily do it using your e-Resident card, or by the power of attorneys, or by a visit to Estonia
Registration of the fund’s management company with the Estonian Financial Supervisory Authority (EFSA)
AML license from the Financial Intelligence Unit (FIU), which usually takes up to 60 days
Registration of the fund. Once you succeeded with the first step, this process takes up to 5 days.
LKS Consult OÃœ assists in registering alternative investment funds in Estonia. We accompany and assist our clients in managing investment and financial structures from idea discussion until the project’s launch. Any collaboration usually starts with a consultation to discuss main principles and decide on the future company’s structure. During the next stage, we prepare a legal opinion on the subject of the fund’s activity and make a circulation map for registration. Preparations usually take up to 3 months. We also provide accounting services in Estonia.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]IVP and Accel have invested €58 million in the Estonian technology startup Veriff, and their representatives will be on the company’s board. Veriff offers a computer solution that allows identifying a person from 9,000 different types of documents in 36 languages in almost all world countries. The identification procedure takes only a few seconds.
The resulting investment will allow Veriff to continue developing its product and strengthen its position in the rapidly growing US market for this service. The total investment in the startup is now €78.6 million.
Our team can help with the development of your startup in Estonia and offer 4 options for establishing a company in Estonia.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]According to the Department of Statistics, merchandise exports in April increased by 54% compared to the same month and imports by 51%. Both the low comparative base of the previous year and the increase in exports and imports of mineral products, electrical equipment and vehicles have had a significant impact on trade growth.
The increase in foreign trade was affected by the poor performance of last year’s trade and the rise in sales of mineral products, electrical equipment, and vehicles. Mineral exports increased by 185 per cent. According to the central bank, foreign trade turnover is growing for the second consecutive quarter and has already reached pre-crisis levels. Exports of goods are becoming increasingly diversified.
“We predicted that the volume of the commodity market should return to the level of 2019 by this time. Now we see an increase in activity everywhere, and in this sense, Estonian exports are even slightly ahead of forecasts. The Bank of Estonia’s economist Mari Rell noted that it keeps up with imports – businessmen are actively replenishing their warehouses”. In addition to solid growth in merchandise exports, services exports, particularly in info-technology, have also grown over a long period.
According to Luminor’s chief economist, Tindu Palma, Estonia was the fastest-growing exporting country in Europe in the first quarter after Slovakia. He noted that export growth in April had depended not so much on the increase in material prices and the increase in sales. “The entire European economy will also perform well in the coming months. We see that confidence in the export of services is also improving, so next month we can expect a good performance of Estonian exports,” said Luminor’s chief economist Tynu Palm. Palm added that the growth in trade shows that Estonia’s economy will grow faster this year than initially anticipated.
We offer 4 options for establishing a company in Estonia.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]Estonia is internationally acknowledged as an e-country. A digital society built by Estonians has no equal in the world. The uniqueness of the Estonian digital ecosystem attracts more and more people every year. Entrepreneurs and professionals from around the globe come to Estonia to either invest and start a business or take advantage of the career opportunities that the Estonian market is happy to offer.
Being a small Northern European country, Estonia has built a digital society over a couple of decades. So far, the country with less than 2 million is leading in the IT sector and is referred to as a 99% digitalised European country. Hence, unlimited tech opportunities have contributed to the fact that Estonia has drawn more and more attention as a prominent European entrepreneurial hub over the years.
LKS Consult OÜ is happy to shed some light on the term and look at some leading aspects of e-progress.
The actual ‘e-Estonia’ term refers to a movement started by the government to simplify the lives of the country’s citizens. In fact, the government seek to use IT to help people initiate contact with the government authorities themselves.
Starting from some minor but significant for its time solutions, Estonia has progressively developed fantastic innovations.
History
Digital reform followed through to the present took place in the second of the 1990s. Interestingly, during the reform, Estonia refused an offer from Finland that wanted to give Estonians its old analogue telephone exchange for free. Estonian government instead decided to build its digital phone system — and as we the results now, it was a proper decision.
Another idea to provide schools with computers was successfully implemented, and every school in the country was supplied with internet access by 1998. That was the fundamental initiative that established the path to e-Estonia. Since then, the process of e-reform has been initiated.
Let’s look at some of the most notable e-achievements.
1996
e-Banking
It was when private banks decided to act to attract people and make them go online. The first banks to introduce Internet banking services in Estonia were Eesti Forekspank and Eesti Hoiupank.
The idea worked excellently, and as a result, most of us now have a banking app on the phone.
2000
e-Tax system
The launching of the e-tax board allowed thousands of citizens to declare online many times faster than they used to. Now, 98 per cent of the Estonian population declare their income electronically.
Using a secure ID, a taxpayer logs onto the system, reviews the data using forms, makes any necessary changes, and approves the declaration form. The process usually takes three to five minutes.
2001
x-Road
It should be considered one of the significant achievements that enabled Estonia to become a digital society. x-Road is a technological and organisational platform enabling secured Internet-based data exchanging between information systems that runs the entire infrastructure.
x-Road connects the systems and allows the secured connection, encrypted and digitally signed. A good example for x-Road could be the opportunity for police to check driving licenses in the database. As new e-services emerge, they become part of the x-Road infrastructure.
2002
e-ID
The electronic ID now is something that nearly every Estonian has. What is more important – it forms the basis for many e-solutions currently existing in the digital society. In other words, they would be impossible or more complicated to use without e-ID.
So, e-ID is a digital form of the Estonian ID that enables online portals starting from e-banking and e-tax system and continuing with the internet provider.
The physical Estonian ID itself is more than just an identity document. It is also used as a health insurance card and passport equivalent. The digitalisation of the ID has added more functions – e-voting, e-document signing, e-prescriptions, e-banking and many more.
The main idea behind the e-ID – accessing different kinds of personal data and services, and as of today, 99 per cent of such public services for citizens are available online.
“Estonians trust e-solutions. This trust is based on practical experience and the knowledge that a citizen’s digital identity grants that person the necessary rights and freedoms in e-environments. A citizen can, for example, see what queries concerning them have been made from Estonia’s national information systems. However, the main thing is that Estonians have experienced that e-solutions do make their lives easier and more convenient,” said Eliisa Sau, Chief Expert of the Police and Border Guard Board.
2007
Cyber security
Since 2007, Estonia is leading international cybersecurity efforts. Since 2008, Estonia has been at the centre of global cybersecurity argument when NATO Cooperative Cyber Defence Centre of Excellence (NATO CCDCOE) was established in Tallinn, the capital.
NATO CCDCOE is a military think-tank that formed outleads the world in crafting cyber defence solutions through a multinational and a NATO-accredited knowledge hub. Its main task is the analysis of various cyber issues.
The CCDCOE is ALSO responsible for identifying and coordinating education and training solutions in cyber defence for all NATO bodies across the Alliance. NATO Cooperative Cyber Defence Centre of Excellence is a group of international specialists in cyber security. They include legal scholars, policy and strategy experts as well as technology researchers with political backgrounds.
As of today, Estonia is hosting both European and NATO cyber security centres.
2008
Blockchain technology
This year, Estonians have designed KSI – a blockchain technology providing high-speed and real-time authentication for global web assets. Blockchain technology makes it impossible to change the data already on the blockchain.
In Estonia, KSI is used by the government to protect government e-services and prevent cyber attacking. KSI secures the information stored in the cloud so that no one, even the government, could manipulate it.
Among the services, there is also an e-Business register that contains information regarding companies based in Estonia
2014
e-Residency
Among other e-Estonia achievements, the e-Residency programme launched in 2014 has mostly to do with the business sector and eventually has changed the Estonian business world forever.
e-Residency provides a digital ID to users, which allows them to log into different online services in Estonia, such as online banks and government portals. The primary motivation to apply is to create and run an EU-based company 100% online. This gives entrepreneurs from all over the world the opportunity to run a business remotely.
In that way, it allows every willing foreigner to set up a company in Estonia remotely by applying online. e-Residency will help those who are not Estonian citizens but want to enter or invest in the Estonian market.
So far, nearly 80,000 entrepreneurs have already joined the digital nation, many of whom successfully develop their businesses in Estonia with e-Residency.
e-Residency is a crucial thing when speaking of the country’s attractiveness to foreign entrepreneurs. Being the first digital nations for the world’s citizens, e-Residency helped thousands of entrepreneurs, therefore, contributed to the development of the Estonian business environment by attracting minds and talents worldwide.
Company formation by a foreigner has never been that easy – still, you may need professional assistance. The application is submitted remotely with the payment of a state fee in the amount of 100-120 EUR. The e-Residency kit itself is issued to the applicant personally at one of the approved points of issue. At LKS Consult OÜ , we are happy to guide our clients and help in obtaining an e-Resident card.
There are much more achievements of e-Estonia and, within this article, we haven’s covered things like e-health, e-prescription, m-parking or i-voting that, in fact, are innovative and deserve attention. However, the main focus is e-Estonia and its connection with the business sector.
As you can see, many e-solutions have contributed to the development of the Estonian business sector. Whilst some e-services as e-Residency has directly affected the growth of a business community, the development of KSI technologies and overall IT progress also played a significant part.
The most advanced digital society
As we have already mentioned, Estonia is a 99 per cent digitalised country. The list of e-solutions that country has come up with over the past decades is long and fascinating. All of that contributed to the development of e-society, and within this article, e-business.
E-business and e-company are widely and fairly used terms when speaking about doing business in Estonia. Starting from the first steps made online and continuing to a company’s fully remote management, we may say that any business established in Estonia is e-business. Let’s consider the main distinctive attributes of the e-Estonian business environment.
FinTech
We are starting with the most essential part of e-Estonia society – financial technology. FinTech intends to describe the evolving intersection of financial services and technology. Its primary purpose is to improve existing on the financial service market products and services.
By using modern technologies, applications, and software, FinTech products and services are helping companies manage their business’s financial aspects.
FinTech can be found almost everywhere: banking, management, retail, catering, hospitality, crypto industry and many others.
Gradually built unique environment of e-Estonia enhanced the rise of FinTech. The development of e-ID and blockchain makes it possible to use the financial technologies we are now using.
Estonian financial technology experts have over 20 years of greenfield development experience. They have experience in the establishment of a high-level functional financial system from scratch. FinTech products and services in Estonia are highly innovative combined with user-friendliness and simplicity.
Considering all of the above, it becomes clear that within the Estonian 99% digitalised society, most of the financial transactions occur digitally. Thus, most of the innovativeness is found within banking.
There a few globally successful startups:
Wise is an online bank/exchanger, which is also one of the four Estonian unicorns.
Monese is another popular mobile alternative to a traditional bank which turnover for the first quarter of 2021 amounted to 221,7K EUR.
Paxful is a P2P platform to make payments, transactions and send money using cryptocurrencies as a means of exchange.
Fortumo is a digital enablement platform for telco bundling, carrier billing and messaging in 80+ countries.
Estonian FinTech is the most advanced globally, and it continues to evolve, so far, containing more than 150 startups.
Startups
Proceeding with the consideration of innovative technologies, we present another figure reflecting the global success of e-Estonia – startups. By means of a joint effort of the government, financial services and IT specialists, the unique e-environment contributed to the current startup bloom.
The Estonian startup scene is enthusiastic and actively developing, welcoming new ambitious individuals to its community with its very favourable conditions.
The sustainability of the market and friendly regulations attracts both smart people and smart money. As Estonia is part of the European Union, entrepreneurs can take advantage of EU funding and banking. Estonian startups have enormous opportunities for raising capital.
A quick reminder that this country with its population of 1.3 million is home to 4 billion-dollar unicorns: Skype, TransferWise, Playtech, Bolt. You may also have heard of Monese, Pipedrive, and Skeleton Technologies – every Estonian startup has something unique to offer.
Talent pool
Another distinctive feature of e-Estonian society – talent pool filled up with different specialists. Yet, nothing is surprising – advanced technologies, favourable conditions, and business opportunities attract more and more foreign professionals.
Estonia, in its turn, seeks to attract highly qualified specialists from all over the world to strengthen the IT industry with skilled professionals and the economy with high-tech companies. As the IT sector is growing, more hands are needed.
Furthermore, the startup scene in Estonia is vibrant and constantly evolving, looking for investors and ways to develop; startups need creative and intelligent people to survive in such a lively environment.
For sure, the most demanded are experienced IT specialists who are motivated enough to contribute to e-Estonia development, and they are going to be rewarded accordingly.
Our team of LKS Consult OÜ offers recruitment services – we can find proper professionals for your business to grow and develop.
To conclude
e-Estonia has built an innovative digital society and has achieved international success as a global hub for enterprising. Its startup friendliness, internet freedom and vibrant entrepreneurial environment have attracted brilliant minds from around the globe, therefore, enhancing the country’s position on the global market as an e-country.
Whether you are an investor or intend to start a business – LKS Consult OÜ is glad to offer its services.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column][vc_column_text]Last week Estonian startup Veriff received 58 million EUR from investors. In the Coronavirus era, the need for non-contact facial recognition is very high both in banks and other institutions worldwide. Therefore the growth of Veriff was active.
“Today, we can identify more than 9,200 national documents in more than 190 countries, our largest and fastest-growing market is the United States,” said Veriff founder Kaarel Kotkas.
The company was able to fundraise a further 58 million euros from investors. The Estonian unit of Veriff employs more than 250 people, and it is planned to hire 150 more next year. Veriff grew from a startup.
“In the area of technology and startup, it is crucial to identify the problem and solve it ten times better than before and then enter the world market”, Kotkas explained.
Banks often do not finance startups. That’s why business angels come to the rescue, who are ready to support potential startups both financially and by the council.
Superangel venture partner Velojo Otsason was also involved in the creation of Veriff during the first round of investments. “I think we have something to celebrate. Our investors have something to celebrate,” he said.
Superangel portfolio companies made 37 investments in three years.
“In fact, Estonia has an excellent reputation in the world. Estonia is now considered the European Silicon Valley. This helps the company grow and raise funds. Many foreign funds are interested in Estonian companies,” Otsason emphasised.
Fundraising is the key
“There are five unicorns or startups in Estonia whose value exceeds the magic limit of a billion dollars. In relation to population, Estonia ranks first in the world,” said Otsason.
Most new Estonian startups are born in the Tehnopol startup incubator, from which 350 companies have grown over the years.
The opportunity to enter the world market made startups the fastest growing industry in Estonia. Last year the sector’s total turnover increased by 43 per cent and investment by a record 440 million euros. The startup companies employ 8,000 people.
“This, of course, is not the limit of the sector’s ambitions. If today the sector’s contribution to GDP is around 3%, then in the coming decades, the volume should increase approximately tenfold,” noted the incubator Tehnopol Kadri Tammai. In comparison, manufacturing accounts for 14 per cent of GDP.
The specialists of LKS Consult OÜ will be happy to assist with company registration in Estonia.[/vc_column_text][/vc_column][/vc_row]
It is common nowadays to buy someone else’s business and adapt it to preferable realities — let’s consider the facts and opportunities of obtaining a shelf business.
Estonia is gaining more and more popularity as the most favourable jurisdiction for starting a business, and that’s for specific reasons. ‘Friendly’ taxation and legislation attract people and are good enough motives to start a company in this North European county. Following up on the idea, we discover even more bonuses offered by the Estonian business sector. As we consider purchasing existing businesses, this blog article mainly explores the subsidiary advantages of having a company in Estonia. These are primarily intersected with a friendly business environment well-established here, in Estonia.
We kindly note that this article does not focus on a traditional way of purchasing a ready-made company. That way of starting a business is indeed efficient and worth it, but first, you need to consider that in this case, the process takes the same amount of time and money to be implemented as when building up a company from scratch. Once obtained, shelf companies need to undergo a re-registration procedure to be in the ownership of a new owner. LKS Consult OÜ can assist you in this matter and offer a ready-made company.
Purchasing an existing business, however, is a slightly different process. Obtaining such businesses is a fast way to become a part of the Estonian business market.
An existing business is a pre-owned business that put up for sale by its owners or state agents. Such businesses have and come with commercial areas or/and rental agreements and all their possessions.
Main advantages of business takeover:
Quick process
Low set-up cost
No hassle
Reputation
Trustworthiness
Good for foreigners (not so well familiar with local legislation)
Ability to adjust
LKS Consult OÜ offers business takeover service — professionals of our company will assist you in finding the right business and accompanying the whole administration process. We note that professional legal help enables us to carry out the process entirely online. In order to obtain a business, you need to register a company, and we are happy to help. Moreover, such way of opening business in Estonia enables businessman to obtain a residence permit.
Once purchased and all formalities are undergone, the business is subject to change of a new owner’s choice — that is what makes this way of investing stand out among other methods. You can get a business you want in the shortest possible time online and feel as a rightful owner.[/vc_column_text][/vc_column][/vc_row]
Are you planning to open a company in Estonia? Feel free to familiarise yourself with different forms of Estonian business.
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 — LKS Consult OÜ will be happy to consult and assist you.[/vc_column_text][/vc_column][/vc_row]
Are you interested in starting a business but not sure how to make the first steps? Building up a company could be hassle-free, especially in one of the world’s most economy-friendly country. In this blog article, we would like to introduce every possible way to start a company in Estonia.
Starting a business could be challenging as it’s time-consuming and requires responsible efforts. We believe the process of company formation not to be critical, however, it’s all about finding the right approach. Every successful business begins with accurate decisions and thrives in a beneficial business environment. And in this way, Estonia is one of the most favourable places for starting a company, offering nearly unlimited commercial opportunities for doing business.
There should be no doubts regarding the advantage of having business in Estonia — advanced fintech and business-friendly economy provide a number of opportunities. However, if there are still some left, take a look at this article introducing the main benefits of the Estonian market.
In the meantime, let’s get down to business, and consider ways of company registration in Estonia:
Company registration with an e-Residency card
Formation of a company by the power of attorney
Setting up a business by a visit
And last but not least by its sustainability:
An obtaining of a ready-made company
At this point, a reader can choose the way of most interest and just scroll down to its interpretation.
Company registration remotely with e-Residency
E-Residency is a state-issued digital identity providing access to Estonian e-government services and EU business environment for non-citizens. This innovative programme allows every willing to establish and manage an EU-based company 100% online.
Steps to undertake in order to set up a business using e-Residency:
As it is a requirement to have a legal address and a contact person in Estonia in order to start a company, the second option is to open a company by proxy. The process includes finding a legal address as well as an Estonian contact person, submission of all necessary documents in the Estonian language and paying the state fee of 145 EUR. Same as with an e-Resident card, it is not required for an entrepreneur to be present in Estonia when registering a business with a help of mediators.
Many businesses in Estonia delivering their services of opening a company by power of attorney. Our company is looking forward to being your company representative at an early stage. You find more information about the process and costs on our website.
Visiting Estonia to start a company
Coming to Estonia is the fastest way to register a company. That is a standard procedure requiring preparedness of documentation before attending a notary. Upon arrival, you need to possess all the information about your company and fill in the documents required by a notary, which services usually amount to 100 EUR. The state fee is 145 EUR, the same as with the formation of the company by proxy.
Be aware that it is possible to establish a company in one day only if a company has already got a legal address and a contact person in Estonia. That is likely to be achieved with recourse to the services of a company specialising in business development.
Before visiting Estonia in person, our company request the following information:[/vc_column_text][/vc_column][/vc_row][vc_row css=”%7B%22default%22%3A%7B%22margin-left%22%3A%2220px%22%7D%7D”][vc_column][us_iconbox icon=”fal|calendar-alt” title=”Planned date of visit” title_tag=”p” color=”custom” icon_color=”#45b400″ size=”20px” iconpos=”left” alignment=”left” css=”%7B%22default%22%3A%7B%22margin-top%22%3A%2220px%22%2C%22margin-bottom%22%3A%2210px%22%7D%7D”][/us_iconbox][us_iconbox icon=”fal|star” title=”Desired company name” title_tag=”p” color=”custom” icon_color=”#45b400″ size=”20px” iconpos=”left” alignment=”left” css=”%7B%22default%22%3A%7B%22margin-bottom%22%3A%2210px%22%7D%7D”][/us_iconbox][us_iconbox icon=”fal|list-ol” title=”Type of activity of the company” title_tag=”p” color=”custom” icon_color=”#45b400″ size=”20px” iconpos=”left” alignment=”left” css=”%7B%22default%22%3A%7B%22margin-bottom%22%3A%2210px%22%7D%7D”][/us_iconbox][us_iconbox icon=”fal|file-user” title=”Data of the Owners/Beneficiaries of the company (passport photo, email, telephone, residence address)” title_tag=”p” color=”custom” icon_color=”#45b400″ size=”20px” iconpos=”left” alignment=”left” css=”%7B%22default%22%3A%7B%22margin-bottom%22%3A%2210px%22%7D%7D”][/us_iconbox][us_iconbox icon=”fal|clipboard-user” title=”Data of Directors of the company (passport photo, email, telephone, residence address, marital status)” title_tag=”p” color=”custom” icon_color=”#45b400″ size=”20px” iconpos=”left” alignment=”left” css=”%7B%22default%22%3A%7B%22margin-bottom%22%3A%2220px%22%7D%7D”][/us_iconbox][/vc_column][/vc_row][vc_row][vc_column][vc_column_text el_class=”padding”]By providing the above-mentioned information before arrival, you can speed up the process and start up a business in the best possible time.
Purchasing of an existing Estonian company
The last available option is obtaining a ready-made company. Such businesses are inactive corporate organisations that have passed the state registration and have all the necessary details for the implementation of their activities.
Purchasing a ready-made/shelf company should be a well-considered decision in order to protect oneself from unreasonable risks. Nonetheless, obtaining an already registered company has certain benefits. Among which:
Completed process of registration
Appearance of trustworthiness
Established reputation
IMPORTANT!The ready-made/shelf companies listed do not have bank accounts or VAT numbers. All corporate accounts have been closed by their previous owners.
So far, there are 4 possible ways to register a company in the Estonian market. LKS Consult OÜ is certain whatever option you are going for, the Estonian business environment welcomes your company and provide the most favourable conditions for growing your business. For our part, we ensure a smooth and promising start for your company.[/vc_column_text][/vc_column][/vc_row]
IVP and Accel have invested €58 million in the Estonian technology startup Veriff, and their representatives will be on the company’s board. Veriff offers a computer solution that allows identifying a person from 9,000 different types of documents in 36 languages in almost all world countries. The identification procedure takes only a few seconds.
According to the Department of Statistics, merchandise exports in April increased by 54% compared to the same month and imports by 51%. Both the low comparative base of the previous year and the increase in exports and imports of mineral products, electrical equipment and vehicles have had a significant impact on trade growth.
Estonia is gaining more and more popularity as the most favourable jurisdiction for starting a business, and that’s for specific reasons. ‘Friendly’ taxation and legislation attract people and are good enough motives to start a company in this North European county. Following up on the idea, we discover even more bonuses offered by the Estonian business sector. As we consider purchasing existing businesses, this blog article mainly explores the subsidiary advantages of having a company in Estonia. These are primarily intersected with a friendly business environment well-established here, in Estonia.
In Estonia, a business establishment is not a big thing. This country is being 99% digitalised; therefore, the process of 
Starting a business could be challenging as it’s time-consuming and requires responsible efforts. We believe the process of company formation not to be critical, however, it’s all about finding the right approach. Every successful business begins with accurate decisions and thrives in a beneficial business environment. And in this way, Estonia is one of the most favourable places for starting a company, offering nearly unlimited commercial opportunities for doing business.