At one point, there might be a reason you would like to end your business activities in Estonia. Either something did not go as expected, and you need to close your business by liquidation, or there is somebody eager to buy a company from you so you can sell it.

Since Estonia has no way to hibernate or pause the business activities, we give you the 4 most common ways to end your Estonian business with step-by-step process flow.

#1 Liquidation / Dissolution of your Estonian company

The most common option to end business activities of your Estonian company is voluntary liquidation. You can start the liquidation process with the consent of the 2/3 votes of the shareholders and appoint a liquidator to complete the process.

Your company needs to be solvent for liquidation. Otherwise, bankruptcy proceedings need to be initiated.

Preparation for  Estonian Company Liquidation

Before starting the liquidation process, it is necessary to stop all the business activities and settle everything, such as:

• pay taxes
• settle debts and claims
• end contracts
• close business bank accounts.

Accounting must be done up to date and the final accounting report submitted at the beginning of the liquidation. The dissolution process takes at least 7 months, but it is a passive waiting period for the owners if you use our liquidator service for closing your business.

Important: After starting the liquidation process, your company is not allowed to be involved in any business activities, and your company will be shown in the Business Register as “in the process of liquidation” (in Estonian “Likvideerimisel”).

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The process of the voluntary liquidation of your Estonian company. Step-by-step:

1. Ending contracts and business transactions.
2. Settling unpaid invoices and collecting receivables.
3. Paying taxes.
4. Closing the company’s bank account.
5. Signing and submitting shareholder’s resolution for starting the liquidation process. E-residents can sign and submit documents online. Non e-residents will need to sign notarized documents with Apostille, if applicable.
6. Publishing liquidation notice in the official paper.
7. Submitting the liquidation report.
8. Approving the final report after 4 months from the liquidation registration.
9. Submitting a deletion petition after 3 months from approving the final report.
10. The company will be deleted after the tax office has approved the deletion petition.

#2 Selling your Estonian company

Selling your Estonian company is the fastest way to step back from a company once you don’t want to be included in business activities anymore.

The process of selling your company can be a quick and cost-effective way for exit. There are some important things to keep in mind:

• Share transfer must be completed via Estonian notary.
• Share of the company is the joint property of spouses, which mean that if the seller is married, notarized approval from the spouse is required, together with marriage certificate.
• All parties to the share transfer must sign a declaration of beneficiary before signing the share transfer.
• Apostille or legalization is required for documents issued outside Estonia.
• Your income from the share sale is not taxable in Estonia (unless it’s a real estate company), but you may be required to declare this income and pay taxes in your home country.

Selling an Estonian Company – Process flow for E-resident.

1. If you and the buyer are e-Residents, the share sale is done remotely via online e-notary service.
2. We book a notary appointment for you and collect all necessary information and documents for signing the share sale agreement.
3. At the agreed time you and the buyer will need to log into e-notary portal using your e-residency cards and digitally sign the share sale agreement.
4. After the share sale, we will draft and send documents for digital signing and register new shareholder and director in the business register.
5. After updating the information in the business register the share transfer is completed.

Selling an Estonian Company – Process flow non-E-resident.

1. Non e-Residents need to sign a notarized Power of Attorney (POA) for signing the share sale agreement on their behalf.
2. We will prepare documents for you and the buyer to sign in local notary office (and if needed, add an Apostille).
3.  After we have received the original documents, we will book an appointment with the notary and sign a share transfer on your behalf.
4. We will also update the business register with the information about new shareholder and director of the company.

In case Estonian company is owned by another company, or if the buyer of your company is another company, then the share sale process depends on if the representatives of the company are e-Residents or not. The respective process described above will apply.
In addition, you will be asked to present fresh certified registry extracts from the companies.

You can read more about our service and request a quote

#3 Merging the company with personal assets to end business activities

Suppose you are a sole shareholder of your Estonian company and would like to close your company in an easier and faster way than liquidation.

In that case, it is possible to merge the company with your personal assets. This exit option is the fastest as it does not involve a company liquidation as the most time-consuming way to exit from the business in Estonia. Merging with personal assets takes approximately two months.

Merging an Estonian company with your personal assets. Step-by-step guide.

• For e-resident company owner the merging process takes place remotely via e-notary platform.
• For non e-resident the process will be completed by 1Office based on a notarized power of attorney.
• We will book a notary appointment for signing the merger decision, and another appointment after 2 months for submitting merger petition to the business register.
• We will prepare final balance sheet to be submitted to the business register together with the merger petition. All assets and liabilities of the company will transfer to you as the sole owner.
• Merger notice must be published in the official newspaper.
• The company will be deleted after the tax office has approved the deletion petition.

#4 Merging your Estonian companies

If you have two or more companies in Estonia and keeping multiple companies is not fitting your business model anymore, merging them into one company would be the best option for you. Since company registration is fast and easy in Estonia, and you may have registered more companies than you actually need for your business. To close the company you no longer need, you can merge it with the one you wish to keep for the business.

To prepare for the merger, the accounting reports of the company you wish to close must be up to date. You will need to set the balance date, which is the date when all assets and liabilities will transfer to the remaining company. It takes at least 2 months to close the company by the merger.

There are two options for merging your companies:

1. One company merges with another company, so that one of them will be deleted and the other will continue the business.
2. Companies merge to form a new company. Upon the foundation of a new company, the shareholders of the merging companies shall become the new company’s shareholders.

Merging two or more companies. Step-by-step guide.

1-           For e-resident company owners the merging process takes place remotely via e-notary platform.

2-           For non e-residents the process will be completed by 1Office based on a notarized power of attorney.

3-           We will book a notary appointment for signing the merger agreement.

• We will prepare resolution to confirm the merger and book another appointment with notary after 2 months for submitting merger petition to the business register.
• We will prepare final balance sheet to be submitted to the business register together with the merger petition.
• Merger notice must be published in the official newspaper.
• Creditors of the deleted company will have 6 months to submit their claims against the company.

Choose the right service provider.

No matter which option is the most suitable for you, it is crucial to ensure that the company will be deleted from the Business Register at the end of the process. As the methods are rather complicated, we suggest ordering these from experienced service providers.

1Office has over 15 years of experience helping foreigners with selling company shares, merging companies, and providing liquidation services.

Contact us for more information or assistance