Important steps before starting a business
A successful entrepreneur is characterised by the capability to make decisions and willingness to take risks. They are determined to fulfil their ideas – first consider whether your characteristics are suited to becoming an entrepreneur.
Make sure you understand which duties, rights, and responsibilities come with being an owner.
Once you have found a business idea, try to find out whether there is demand for your goods or services. Who are your potential customers and how to reach them?
Analyse the financial side of your planned business activity. Also find opportunities for additional funding.
Find a business name for your company
A unique and memorable business name can contribute to your company’s fame and success. Limits have been set for business names and you should consider these.
More information on choosing a business name and limits set to it can be found in the State Portal article Selection and Verification of the Business Name. Check the suitability of your chosen business name, using the name query of the E-Business Register.
Choosing an area of activity
Before starting a business, you need to choose an area of activity for your business. Choosing an area of activity is necessary to register your company.
The area of activity is determined based on the Estonian Classification of Economic Activities. You can only choose one area of activity as your planned main area of activity – this is the activity from which you are planning to earn the most income in your first financial year. Determining a main area of activity does not mean that the company cannot be active in other areas.
You should consider that there are areas of activity subject to special requirements that require the application for an activity licence or submission of a notice of economic activities. More information on areas of activity subject to special requirements can be found under the State Portal topic Licences and Notices of Economic Activity.
Whether or not your chosen area of activity falls under areas of activity subject to special requirements can be checked in the Classification of Economic Activities.
Which form of business to choose
You should assess your opportunities and risks when choosing a form of business. First, you need to understand which business form is the best for your chosen area of activity, also considering the goals you have set and your financial options. The most commonly used forms of business in Estonia are sole proprietors (FIE), private limited companies (OÜ), and public limited companies (AS).
The forms of business differ from each other by the size of the necessary start-up capital and number of parties in the company, but also by extent of proprietary liability and management organisation. More information on the differences between different forms of business is available in the article of the State Portal, Comparison of Each Form of Business.
What documents do I need to start a business
Requirements for documents necessary to start a business differ depending on your form of business. More information about each form of business can be found under the State Portal subtopic Establishing a Company.
How can I register my business
There are two options for registering a business: either electronically in the e-Business Register or through a notary. Electronic registration in the e-Business Register is convenient and fast.
Private limited companies, general partnerships, limited partnerships, and sole proprietors (FIE) can be registered electronically. Public limited companies and commercial associations need to be registered through a notary.
More information on registering a company can be found in the State Portal article Registering a Company.
How big are the costs of registering a business
The state fee for electronic registration of a company depends on your chosen form of business.
To establish a private limited company, public limited limited company and commercial association you will have to pay a state fee of 200 euros. To establish a FIE, a general partnership or limited partnership, you will have to pay a state fee of 20 euros.
If you establish the company electronically under expedited procedure, the state fee will be 265 euros.
If you are using a notary for the formation of a company, the notary fees will be added.
If my chosen area of activity falls under an area of activity subject to special requirements
Before you start your activity in an area of activity subject to special requirements, you must apply for an activity licence or licence or submit a notice of economic activities. The notice or application for operating in an area of activity subject to special requirements can be submitted electronically at the Register of Economic Activities LINK or, depending on the area, submitted to the registrar, government authority, or the local government of your place of business.
The state fee must be paid for applying for an activity licence. The size of the state fee depends on the area. State fees have been established with the State Fees Act.
More information on areas of activity subject to special requirements can be found in the State Portal.
How can I register a trade mark
In addition to a company name, you can also register trade marks in your name to help your company and goods or services you offer to stand out among those of your competitors.
Registering a trade mark gives the mark legal protection that limits other companies and persons in using a trade mark identical or similar to your trade mark when labelling similar goods.
After developing a trade mark, you have to register it at the Estonian Patent Office. More information on registering a trade mark can be found in the State Portal article Registration and Protection of Trade Marks.
How can I register a domain name
Registering a domain name upon establishment of a company is voluntary. An application shall be submitted to a registrar to register a domain. A registrar is usually a company that provides Internet connection, website hosting, or virtual server services. The list of registrars has been published on the website of Eesti Interneti SA.
I would like to hire employees
If you hire employees, you have to register them in the employment register on the day they start working.
You also have to notify the Labour Inspectorate that your company commenced activity.
Once an employee starts working, it is your obligation to ensure that they receive a proper working environment, work equipment, and salary from which all taxes and payments paid by the employer are deducted.
Which taxes do I have to pay as an entrepreneur
Ownership, income, or benefits are subject to taxes. Taxes are divided into state and local taxes. The type and size of taxes you need to pay depends on the peculiarities of your company.
Social tax, personal income tax, unemployment insurance premiums, and pension insurance premiums have to be paid to the state from the salary of each employee working under an employment agreement.
More information on taxes of an entrepreneur can be found under the subtopic Taxes and Customs of the State Portal. Due dates for business tax liabilities can be found in the tax calendar of the Estonian Tax and Customs Board.
How to start a business abroad
If you want to set up a new business abroad or expand your services to another EU country, you must find out the rules and formalities in this country. Points of Single Contact provide national information to help you deal with a wide range of practical issues.
Your Europe Business portal offers information on starting up and running a business across the European Union and beyond. This site helps entrepreneurs with practical information on their rights, obligations and opportunities when doing business in the EU. The topics include information about VAT rules and rates in each EU country, E-Commerce, posting staff abroad, product requirements, access to finance, etc.
Enterprise Europe Network helps businesses innovate and grow on an international scale. The Enterprise Europe Network can help your business find international partners to grow and expand abroad. You can get free access to a range of advisory services.
Related articles
References
- Estonian Classification of Economic Activities
- Contact information of notaries
- Registration of employment
- Practical guide to doing business in Europe
- Points of Single Contact
- Enterprise Europe Network (EEN)
Services
- Domain registration
- E-Commercial Register name query
- Electronic registration of a company in the e-Business Register
- Electronic submission of a trade mark application (in Estonian)
- Register of Economic Activities
- Search for areas of activity
- Signing in to e-MTA