Located in Northern Europe, the Republic of Estonia can offer foreign investors a number of business advantages. If you wish to register a company in Estonia, this country is exactly what you need.
Advantages of Opening a Company in EstoniaThe main advantages are:
- EU membership;
- one of the lowest levels of corruption;
- well-developed banking sector;
- opportunity to open an account with an Estonian bank (only for a resident company that has a registered office);
- opportunity to obtain Estonian citizenship, residence permit, permanent residence and affordable housing;
- stable currency;
- access to the EU market;
- OECD membership;
- reduced tax rates for non-residents;
- well-developed IT sector;
- DTA agreements with 60 countries.
Registration RequirementsIf you are interested in opening a business in Southern Europe, you can set up an LLC in Estonia remotely (OÜ). In this case, you will need to meet the following conditions:
- coming up with a unique name and translating it into Estonian, Russian or English;
- preparing the Memorandum and Articles of Association;
- having at least one founder (can be physical persons and legal entities; there is no residency requirement);
- no secretary required;
- BoD meetings can be held anywhere or via the Internet;
- having a paid up share capital: of 2 500 euros; minimum nominal value of one share is 1 euro;
- conducting an audit, if a company’s annual turnover exceeds 4 million euros; at the end of the fiscal year, the BoD must submit an annual financial statement and business activity report to the auditor.
TaxationThose interested in setting up a company in Estonia should keep in mind the following:
- preferential interest rate (0%) on corporate tax is applied provided that the company distributes its profits at the end of the reporting period (or is its management decides to invest the profits in business development);
- if a company operates in Estonia, it must pay a tax at the rate of 25%;
- VAT is 20% (for some goods (e.g. pharmaceuticals) the rate is reduced to 9%)).
Companies registered in Estonia can obtain a VAT status. Obtaining it requires a company to operate in the European Union and has a turnover of 16, 000 euros.
Considering registering a company in Estonia remotely? Need advice on opening a corporate account with an Estonian bank? Why not contact YB Case?