Doing business in Estonia

The ease of doing business ranking by doingbusiness.org has listed Estonia as number 17 out of 189 ahead of many countries known for their strong economies, which means that the regulatory environment is more conducive to the starting and operation of a local firm.

Company in Estonia

Establishing a company in Estonia is simple – it requires company registration on the commercial register, which is free of charge and is done on the basis of a personal ID, however a notarised application is required and a state fee must be paid. An expedited process is also available, where applications will be reviewed in the next working day at the latest. Holders of the Estonian ID can set up their company online via the Company Registration Portal.You can read more about it here.

Companies and registered sole proprietors do not need to register separately as persons liable for social tax. Non-residents not on the Commercial Register however need to register as taxable persons with the Tax and Customs Board.

Certain activities also require licences, classification for which may be found here: http://mtr.mkm.ee/default.aspx?s=info, however these areas are few and licences are not necessary for most types of economic activity.

ID card holders are able to conduct most of the business administration online as e-services allow them to change data in the business register, file annual reports and complete other tasks through the e-Business Register.

Dissolution process

Dissolution of a company is also simple – it is done by a resolution of the shareholders or a judicial decision. For the former, a shareholders’ meeting must be held, where at least 2/3 or participating shareholders need to approve of the decision after which a request, the resolution and the minutes of the meeting must be submitted to the Commercial Register. This may be completed online, simplifying the process.

Due to European Union requirements in the Services Directive, the EUGO Network, the Point of Single Contact has been created to facilitate starting businesses in the EU. It eliminates unnecessary bureaucracy and simplifies business formalities. The website, where more information on the procedures can be found on is located at https://www.eesti.ee/eng.

Foreign investments

A great benefit of doing business in Estonia is that foreign investors have equal rights and obligations with local entrepreneurs – this means they can establish a company in Estonia exactly as locals without any special restrictions. Foreign investments are also protected by both internal law and international agreements. The latter have been concluded for the protection of investments with several countries including the US, Germany, France, Finland, Sweden, Norway, Switzerland.