Europe · Company formation
Company formation in Estonia
An EU operating or holding company that defers tax on reinvested profits. Well suited to digital-first, non-resident founders.
At a glance
- Entity
- Osaühing (OÜ) — private limited company
- Corporate tax
- 0% on retained/reinvested profit; 22% (levied 22/78 of the net) on distributed profits (from 2025, the reduced 14/86 regular-dividend rate having been abolished)
- Incorporation time
- ~1 business day online, often the same day; allow a few days more if banking is arranged in parallel
- Minimum capital
- None since 1 February 2023 (minimum EUR 0.01; formerly EUR 2,500)
- Resident director
- Not required; but if no management-board member resides in Estonia, an Estonian-resident contact person and a local legal address must be appointed
- Audit
- Small-company exemption; statutory audit only where two of three thresholds are met — revenue EUR 5m, assets EUR 2.5m, or 50 employees (thresholds raised in 2025)
- Remote set-up
- Yes, fully remote via an e-Residency digital ID; no notary is needed for a standard OÜ
- Government fee
- EUR 265 state fee (e-Business Register, online). The e-Residency card is separate (~EUR 100–120 plus courier), as of 2026
- Best for
- An EU operating or holding company that defers tax on reinvested profits. Well suited to digital-first, non-resident founders.
The process
- Obtain an e-Residency digital ID (or use another EU eID): apply, then collect the card at a pickup point
- Check and reserve the company name in the e-Business Register
- File the incorporation petition and articles of association online, appointing the management board and, where no board member is Estonian-resident, a local contact person and legal address
- Confirm the share-capital contribution (from EUR 0.01) within the application
- Pay the EUR 265 state fee; the registrar typically enters the OÜ within one business day
- Register for VAT with the EMTA if turnover exceeds EUR 40,000 (or voluntarily), and open a business or EMI account
What can go wrong
- Non-residents must maintain an Estonian contact person and a registered legal address — an annual service cost, not a state fee
- Opening a traditional Estonian bank account remotely is difficult; most e-resident founders rely on EMIs such as Wise, which some counterparties treat cautiously
- The 0% rate holds only while profits are retained — distributions, fringe benefits and certain expenses trigger the 22% charge, and place-of-management or CFC rules abroad can pull profits into home-country tax
- The 2% defence/'security' tax on corporate profits was cancelled by Parliament in June 2025 and never took effect; but standard VAT rose to 24% in 2025 — confirm current figures before relying on them
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Form a company in Estonia?
One named person on the file, an honest read on tax and substance, and a fixed quote before you commit.