Establishing Private Limited Company (OÜ) in Estonia
The private limited company (osaühing or OÜ in Estonian) is the most common form of business in Estonia.
The advantages of the private limited company:
- simple and quick registration;
- low share capital requirement (2500 euros);
- shareholders have no personal proprietary liability for the private limited company’s obligations.
- From 01.01.2011 a private limited company can be established without contributing the share capital if the proposed area of activity does not require capital investments. The share capital of such a company will be formed by the liabilities of the founders.
What you should think about before company formation
- What will the company’s business name be?
- What will your initial area of activity be?
- Who are the shareholders and how large are the partner’s share capital contributions?
- What will the private limited company’s place of business and the address of its location be?
- How will the management of the private limited company take place?
How to register a new company in Estonia
You can register a private limited company electronically at the Company Registration Portal of the e-Business Register. You need the technical equipment for electronic registration (ID-card and ID-card reader). To get an Estonian ID-card, you must become Estonian E-Resident (you can apply here).
A private limited company can be registered electronically in the Company Registration portal of the e-Business Register only, if:
- all persons related to establishment (members of the management board, founding members, etc.) are able to sign the application of initial entry and establishment documents digitally;
- the private limited company is established without an immediate share capital contribution or with a monetary contribution made electronically in the course of preparing an application in the Company Registration Portal of the e-Business Register.
It is also possible to establish Estonian company through notary.
What are the costs of establishing company in Estonia
To establish a private limited company, you will have to pay a state fee of 145 euros. If you establish the private limited company electronically, the state fee will be 190 euros. The state fee can later be recognized as a business expense as the costs of establishing the private limited company.
If you are using a notary for the formation of a private limited company, the notary fees will be added. The precise amount depends on the size of share capital and the number of founders. VAT will be added to all of the notary fees.
A private limited company can be established without contributing the share capital if the proposed area of activity does not require capital investments. The share capital of such a company will be formed by the liabilities of the founders amounting to the sum they promised to provide as share capital contribution.
How long will company formation take
If you register electronically, a company can be established in just a few hours in the best case; still, think at least one business day. Registering a private limited company through a notary will take 2-3 days.
What must be done after founding a company in Estonia
Depending on the company’s area of activity and size, a varying number of additional steps must be taken. First you will have to open a bank account, where the company’s share capital is to be deposited. It is not possible to open a bank account without the company’s Commercial Register number.
If you 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 16 000 euros, you will have to register as a VAT payer with the Tax and Customs Board.
If you hire employees, you will have to register them with the Tax and Customs Board.
We can help you with every step in establishing company in Estonia!