JST Legal Alliance

Business in Estonia

Estonia is known as a bridge city between the Baltic and Nordic countries in Northern Europe; it has a border between the Baltic Sea and the Gulf of Finland. Estonia has more than 1,500 islands, and its different region spans rocky beaches, old-growth forest and several lakes
The economy of Estonia has become intensely competitive, which is supporting the large international corporations and as well as newly established companies. During the past few years, Estonia has developed its image as a world-leading leader in information technology, and the country provides the grants so profoundly in this category
The economy of Estonia has become intensely competitive, which is supporting the large international corporations and as well as newly established companies. During the past few years, Estonia has developed its image as a world-leading leader in information technology, and the country provides the grants so profoundly in this category
World-class social capital
Estonia is known as a world-class social capital, and its qualified workforce is identified as a winning advantage for the entrepreneurs who have established the business in Estonia. Estonia is multicultural where the English language is spoken quite broadly in the country
Estonia currently offers one of the most profitable taxation systems
Setting up a company in Estonia has been made incredibly easier than ever in such countries. Estonia is known, the first country in EU which has announced to offers e-residency, which intends that entrepreneurs of across the world can establish and operate the business remotely through e-residency
Estonia has introduced 0% tax rate on profits from legal entities, and companies are not subject to corporate income tax in Estonia; CIT is 0%.
This applies only to the received and undistributed profits of the company if the shareholder's holders decide to distribute profits in the form of dividends, the company subject to 20% income tax
Official VAT in Estonia is 20% and 0% rate is for all goods and services related to International Business
January 1, 2018 – the corporate income tax rate on annual profit-sharing was decreased from 20% to 14%, just in those circumstances where dividends are paid to legal persons. Official VAT in Estonia is 20% and 0% rate is for all goods and services related to International Business

Company Incorporation

The Commercial Code of Estonia governs business establishment in the country. Before beginning business activity in Estonia, it is important to determine what kind of legal entity to establish.

According to the commercial code, there are five forms of legal entities
Company Incorporation

The Commercial Code of Estonia governs business establishment in the country. Before beginning business activity in Estonia, it is important to determine what kind of legal entity to establish.


According to the commercial code, there are five forms of legal entities.


Those are general partnership (TÜ), a public limited company (AS), a private limited company (OÜ), and limited partnership (UÜ). The typical popular forms of business are a private limited company and public limited company.


It is easy to establish a new company in Estonia. There are three ways how to incorporate a company; one is electronic registration through the company registration portal. This opportunity is accessible just for a natural person who is having an e-residency or Estonian ID card. The second way is to do registration through a notary office in Tallinn, and the third is Company incorporation with Power of Attorney.


The share capital for Estonian company is 2500 euros, which does not have to be contributed during company incorporation. It can be contributed during the first year after the incorporation of the company.

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