When you have settled on a suitable form of business, selected a busineess name and area of activity, you can begin registering the company.
There are two ways of doing so:
- electronic registration via the e-Business Register
- through a notary.
Electronic registration via the e-Business Register
Electronic registration is the most convenient and quickest way of establishing a company. In order to log in to the the e-Business Register portal and perform the registration procedure, you need an Estonian ID-card, Mobile-ID or Smart-ID.
You can register a business electronically in the e-Business Register only in the case all persons related to the establishment (members of the management board, founding members, members of the supervisory board etc.) are able to sign the initial entry application and establishment documents digitally.
For a foreign citizen who wants to start a company in Estonia, it is useful to become an e-resident. Holders of e-resident's digi-ID-card can sign documents digitally and digi-ID provides access to all Estonian e-services.
If the company is located in a foreign state, the company must designate a contact person.
The e-Business Register portal can be used to register private limited companies, general partnerships, limited partnerships and non-profit associations, and enter business as a self-employed person. Commercial associations or public limited companies cannot be established electronically.
Upon the electronic registration of a private limited company, one must enter data concerning the founding members and the company to be established; enter the business name; design a template for articles of association; pay the state fee; and make a share capital contribution.
Begin electronic registration of a company in the e-Business Register
In the best case, electronic registration will take only a few hours but still it is advisable to budget one business day.
Registering a company through a notary
If you do not have the option of establishing the company electronically or do not wish to do so, you can use the services of a notary.
You will have to do so in case if:
- the contribution of the company’s share capital is not monetary but rather a monetarily appraisable thing or proprietary right to be transferred to the private limited company (such as equipment, software etc);
- the founders of the company cannot digitally sign documents.
First make the contribution of share capital and pay the state fee. Then, with the assistance of a notary, prepare and file the following documents with the Commercial Register:
- memorandum of association;
- articles of association;
- application;
- information on communications devices;
- bank certificate regarding deposit of share capital;
- certificate regarding payment of state fee.
The notary will prepare the necessary documents for you. The notary’s office will have all of the samples of documents and templates necessary for founding companies.
Find a suitable notary and contact information
Registering a company through a notary will usually take 2-3 days.
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.
Registration as a VAT payer
If the taxable annual turnover of your company exceeds 40,000 euros per calendar year, you are required to register the company with the Estonian Tax and Customs Board as a VAT payer. The registration application must be submitted within three business days from the moment at which the 40,000-euro turnover threshold was reached. If the turnover is below that limit, registration is not obligatory.
Transfer and sale of non-current assets are not included in taxable annual turnover. Nor will you incur the obligation of registering as a VAT payer if the entirety of the taxable turnover consists of turnover taxable at a 0% rate.
NB! In the Company Registration Portal, the company can register as a person liable to value added tax and register their employees when founding their company.
Registering as a VAT payer in the case of lower turnover
Companies that have an annual turnover of below 40,000 euros should still register as a VAT payer if they plan to buy costly fixed assets or raw materials for manufacturing products or providing services (computers, equipment, production lines etc). Registering as a VAT payer gives you the right to receive from the state refunds of input VAT paid on goods and services. The amount of input VAT depends on the amount in which you bought the goods and services and the nature of the purchases. In such a case, you would have to substantiate that you are engaged in business in Estonia or are going into business in Estonia.