Private Limited Company registration in Estonia

It must not contain sensitive words that imply criminal activity or contradict to the standards of public morality. The words such as Assurance”, “Bank”, “Insurance” are the subject of licensing.

The name of the company may not create any associations with governmental bodies, agencies and departments.

The company’s name must not be very similar to existing names on the registrar and it must not contain improper or objectionable words. It must be written in Latin letters and contain the abbreviation “OÜ” which means limited liability.

Estonia PLC is required to have a registered office address in Estonia.

One director is the minimum required. There is no requirement for them to be locals, but there is a requirement to hold the meetings of directors within the territory Estonia.

Corporate persons cannot become directors as well as the shareholders. The directors’ details are registered on the public record and can be accessed by the public.

The appointment of a secretary is not mandatory, but optional.

One shareholder is the minimum required. There is no requirement for them to be locals and corporate persons can become shareholders. There is no requirement regarding the place of the shareholders’ meetings, but the frequency should not be less than 1 year.

The director and shareholder cannot be the same person. The shareholders’ details are registered on the public record and can be accessed by the public.

The beneficial owners’ details are registered on the public record according to the EU legislation requirements.

The owners of an PLC are free to determine any amount as the authorized capital at incorporation, but it should not be less then €2.500 EUR. The authorized capital is the maximum amount of capital that the company is authorised by its constitutional documents.

An Estonia PLC may issue the shares with the minimum value of €1 EUR. The shares may be with or without voting rights, preferential and common.

There is a requirement to have the authorized capital of the company fully paid up. This means that the owners of an PLC are required to pay their contributions during the incorporation. However, this is applicable only when the authorized capital is more than €25.000 EUR.

The incorporation period in Estonia may be 2-3 days.

Ready-made but unused PLCs are available in Estonia, in case you are in need of a quicker incorporation process.

Estonia legislation does contain any requirements regarding the economic substance of the Limited Liability Companies. This means that the company is not demanded to have premises and an adequate number of employees, the number of expenditures to support its activity in Estonia. Private Limited Company must have an address within the territory of Estonia that will be registered as a company’s address.

Private Limited Company incorporated in Estonia is obliged to prepare and file accounting records. Also, a tax return should be lodged to the tax authorities as well. Certain companies with certain turnover should undergo through the audit.

The corporate tax rate in Estonia is 20% but in certain cases it can be reduced to 14%.  Note that this corporate tax rate is to be applied only when PLC is distributing the profits to the owners. All other taxes such as capital gain taxes, taxation of the interests, royalties etc. are included into the corporate tax. In other words, the corporate tax rate is applied to the profits distribution only. Also, Estonia has a huge number of double tax avoidance treaties and due to being a member state of the EU, Estonia PLC is entitled to the tax benefits that are established on the EU level. VAT tax rate is 20% but in certain cases can be reduced to 9% and 0%. The threshold for the VAT registration is over €40.000EUR of turnover.