Starting a Business in Estonia

This table summarizes the procedures and costs associated with setting up a business in Estonia.

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Standardized company

Legal Form: Private Limited Company (osaühing or OÜ)
City: Tallinn

Registration Requirements Summary:


  Procedure Time to complete: Cost to complete:
1 Check the uniqueness of the proposed company name 1 day no charge
2 Deposit the initial capital in a bank and obtain a bank notice certifying the payment 1 day no charge
3 Submit the registration application to the Commercial Register 1 day State fee of 2200 EEK. If electronic application, State fee of 2900 EEK.
4 Register for VAT at the National Tax Board up to 3 days no charge
5 Register with the Central Sick Fund of Estonia 1 day no charge

Registration Requirements Details

Procedure 1.
Check the uniqueness of the proposed company name
Time to complete:
1 day
Cost to complete:
no charge
Name of Agency:
Comment:
The Commercial Register refuses to register a company if the name resembles an existing company name or registered trade mark. The entrepreneur can check proposed names on www.rik.ee. The law provides that the company business name shall be clearly distinguishable from other business names entered in the Estonian commercial register.
Procedure 2.
Deposit the initial capital in a bank and obtain a bank notice certifying the payment
Time to complete:
1 day
Cost to complete:
no charge
Name of Agency:
Comment:
The full amount of authorized capital must be paid in before registering the company. The bank issues a notice that serves as evidence at the Commercial Registry. After the company becomes registered, the starting account can be turned into the usual account that is available for everyday business. Shares must be paid in cash unless the company’s bylaws permit in-kind contributions
Procedure 3.
Submit the registration application to the Commercial Register
Time to complete:
1 day
Cost to complete:
State fee of 2200 EEK. If electronic application, State fee of 2900 EEK.
Name of Agency:
Comment:
As regards the terms of proceedings the comment shall be as follows:
With the amendment of the Commercial Code (effective January 1, 2007), the management board can submit an application to the Commercial Register within a year (instead of 6 months) of concluding the memorandum of association. Starting with January 1, 2007 the registrar must review the application for registration of the company within 5 working days (instead of 15 days) of receipt. Under extraordinary circumstances this period can be extended to 3 months. The review ends with a judgement on entry or refusal. For positive judgements the registrar must make an entry no later than the fifth working day after signing the judgement
2. As regards the state fees the comment shall be as follows:
A new State Fees Act took effect on January 1, 2007, introducing fixed registration fees. For the entry of private limited companies in the Commercial Register a state fee of EEK 2200 and in case of expedited processing (electronic procedure, where the application is reviewed within a day since receipt) EEK 2900 shall be paid

A separate registration with the National Social Insurance Board, which gets its information from the National Tax Board, is not required. Health insurance in Estonia is through a compulsory scheme under which employers are obliged by law to pay social tax (the source of revenue for health insurance) for their employees. The rate of social tax is 33% of the taxable amount. This tax must be paid by the tenth day of the month following the taxable period, and the corresponding tax return must be submitted to the local tax board office of the residence or seat of the payers of social tax by the same date.
Procedure 4.
Register for VAT at the National Tax Board
Time to complete:
up to 3 days
Cost to complete:
no charge
Name of Agency:
Comment:
The general VAT rate is 18%.

The company’s management board must file an application for company registration, making the company liable for VAT with the Tax and Customs Board, within 3 days as of the date on which the taxable turnover of the company, excluding imports of goods, exceeds EEK 250,000, as calculated from the beginning of the calendar year. Registration shall be completed by the Tax and Customs Board within 3 days of filing the application. Registration may be (and in the practice, often is) effected immediately after establishment because it allows companies to reclaim VAT tax that cannot be offset by VAT charged to purchasers of their goods and services.

Starting January 1, 2009 the application for registration of the company as a taxable person can also be submitted electronically via the electronic system of the Commercial Register.
Procedure 5.
Register with the Central Sick Fund of Estonia
Time to complete:
1 day
Cost to complete:
no charge
Name of Agency:
Comment:
In Estonia, health insurance is provided through a compulsory scheme under which employers are obliged by law to pay social tax (the source of revenue for health insurance) for their employees. The employer is obliged to register all new employees, board members, and contractual workers with the Sick Fund within 7 days of their employment date. The employer must pay social tax of 33% of the taxable amount by the tenth day of the month following the taxable period. By the same date, the employer must also submit the corresponding tax return to the local tax board office of the residence or seat of the payers of social tax