Registering the branch of a foreign company
- Requirement for registering the branch with the Commercial Register
- How does the registration of the branch with the Commercial Register work?
- How long will it take to establish a branch?
- Expenses related to establishing a branch
- What must be done after registering a branch?
If a foreign company intends to sell goods or services under its own name on a permanent basis in Estonia, you as the representative of that company in Estonia will have to register the company with the Commercial Register as a branch. A branch is not a separate legal person and the foreign company will be responsible for the branch’s activities and liable for its obligations.
Requirement for registering the branch with the Commercial Register
The requirement for registering the branch with the Commercial Register is that the company has selected a director or directors for the branch to be established and authorized these individuals to open the branch. If more than one director has been appointed for the branch, the branch may generally be represented by any one of them. An area of activity must be selected for the branch based on the classification of Estonian Classification of Economic Activities.
How does the registration of the branch with the Commercial Register work?
The basis for opening the branch is the notarized application of the branch director. The following documents must be appended to the application:
- official certificate regarding the existence of the company in its country of location (extract from the Commercial Register or copy of the registration certificate);
- consent or licence for establishing the branch if required by legislation;
- letter of authorization certifying the authority of the branch director or copy of the resolution appointing the director;
- copy of the company’s articles or memorandum of association certified according to the laws of the country of location;
- contact details (telephone, fax);
- notarized samples of the directors’ signatures.
The documents must be in the required format, certified by apostil, legalized and translated into Estonian. The translation must be notarized or certified by a sworn translator. Legalization is a confirmation regarding the fact that the document you submit is suitable for use in Estonia.
How long will it take to establish a branch?
The time expenditure for the entire process depends on the time necessary for preparing, translating and certifying documents both in the country of location and Estonia. The branch will be entered into the Commercial Register within 5 business days of submission of the registration application.
Expenses related to establishing a branch
The notary fee for notarizing one signature is 12.75 euros. It will cost 18.21 euros to have a notary prepare the draft registration application. VAT will be added to the notary fees. Registration of the branch with the Commercial Register costs 140 euros. Certification of documents by apostil costs 14.70 euros per document.
What must be done after registering a branch?
- If the branch will be operating in an area of activity subject to special requirements, you will have to apply for an activity licence.
- If your annual turnover exceeds 40 000 euros, you will have to register as a VAT payer with the Tax and Customs Board.
- If you recruit employees, they must be registered in the employment register.