Features of doing business in Estonia

Registration of a company must be done in the Commercial Register of Estonia. A registered business must have a legal address in Estonia. The authorized capital is at least €2,500. It can be paid at the stage of registration if the owner of the company is an individual.

Before starting registration, open an account in an Estonian bank to complete the online registration.

To register a company, you do not have to go to a notary or stand in line at the doors of state bodies. You can set up your business online in a matter of minutes. You will need an electronic identity card, which looks like an ID card, a laptop and the Internet. So:

1. Register in the Estonian commercial register using an ID card.
2. Fill in your personal information.
3. Put an electronic signature on the documentation.
4. Make the registration fee and share capital through internet banking.
5. Submit an electronic application.

After registering a company, you will have to keep accounting records, prepare tax reports on turnover and paid wages once a month. Prepare the annual financial report for the previous year once a year and submit it to the Commercial Register by 30.06.

Failure to provide documentation may result in fines. And although tax inspectors in Estonia are loyal, it is better not to tempt fate and submit documentation on time and correctly. Learn more about taxation in Estonia.

Forms of business in Estonia

In Estonia, you can register as an individual entrepreneur, general or team partnership, joint-stock company or limited liability company.

The sole trader is the simplest form of business where you have full control over all payments and make transactions yourself. An interesting fact is that in Estonia even an underage teenager who is 15 years old can become an FOP.

A general partnership is a commercial organization, it can be led by 2 or more partners. In this case, the name of the company will be common, and the distribution of capital investment and disposal of assets can be established in the partnership agreement.

A limited partnership is an organization of 2 or more partners, with a general partner who bears all financial responsibility and a limited partner who simply invests money. A limited partner may not take part in the work of the partnership, his main task is a financial contribution.

Limited Liability Partnership – in this form, the authorized capital is divided into parts, the minimum share capital investment is 2,500 euros. In the partnership, a board is formed, which may consist of 1 or 2 people who organize all the work. The chairman of the board is elected by vote and, in some cases, may not be a shareholder of the partnership.

A joint stock company is a company with a minimum investment of 25 thousand euros, which is registered by 1 or 2 individuals (or legal entities). All JSC shares are registered in the Central Securities Register. The company elects a board and a special supervisory board, whose members (as in the previous form) may or may not be members of the joint-stock company.

Positive factors for doing business in Estonia

1. Estonia is a rich country. GDP per capita is more than $13,000. The state is in the top 10 richest countries in the post-Soviet space.
2. In terms of purchasing power parity in dollars, Estonia ranks 4th and pleases with $20,200.
3. In the index table of the World Economic Forum on the fact of competitiveness, the country ranks 30-35th.
4. The World Bank ranks Estonia as one of the top countries in the world for doing business and ranks it 17th out of 175 countries in terms of ease of doing business.
5. Estonia has practically no debts. Public debt is less than 7% among the countries of the European Union.
6. Constant investments from Sweden and Finland keep the economy in balance, opening up new prospects for businesses large and small.
7. Unlike Ukraine, Estonia has a low level of corruption, and pricing is more fair.
8. Estonians are known for their good purchasing power.
9. The developed infrastructure of the state, tolerable geolocation and European-oriented residents in the complex give rise to a close emotional connection: comfortable conditions for business = comfortable life.
10. Estonia is actively implementing the electronic registration of an enterprise and thereby reducing administrative costs and time for registering a business from several days to several hours.
11. Electronic company registration is called e-Business Register and is actively promoted among Estonian and foreign entrepreneurs.
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What does an entrepreneur get when registering a business in Estonia

There are many advantages in Estonian business, you get access to a market of 300 million people and a comfortable transport corridor that works around the clock and all year round without interruption. You have a favorable geolocation, access to the sea and ports, excellent European infrastructure. Unlike other Eurozone countries, there are almost no strikes in Estonia, so when you open a restaurant, you are not afraid that employees will run away to strike during lunch. By registering a company in Estonia, you will be able to move your capital freely and not be limited to one type of transfer.

Optimal types of business for Ukrainian entrepreneur

There are two types of business in Estonia - with a compulsory license and without it. Licensed businesses include:

• • medical practice;
• pharmacies;
• production of medical preparations;
• sale of alcoholic beverages;
• іnsurance companies;
• travel companies;
• trading in securities.

A licensed business is more complex in terms of obtaining a license and paperwork. Therefore, if you are not sure what exactly you want to do in Estonia, start with an easier option, with a business that does not require a license.

Unlicensed cases include:

• restaurant activities;
• purchase of real estate;
• rental of premises;
• press kiosks;
• fitness clubs and gyms.

Estonian legal system

Like all legal systems in continental Europe, the Estonian legal system is based on the principle of priority of legislative acts as a source of law over any other sources such as jurisprudence, doctrine or custom.

When starting work in Estonia, keep in mind that there are certain areas of activity that require a license or in which only a specific type of organization can operate, as well as areas of activity in which activity is prohibited by law.

There may also be special requirements arising from the law regarding the obligations of companies that depend on the field of activity (for example, banking, investments, insurance, lending, sale of fuel or alcohol, etc.).