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In Estonia, which is one of the Baltic countries, the most common trade is done through private limited companies. Setting up such a company usually takes less than 24 hours. The application to set up a company takes only 5 minutes. In the rest of our article, you can find detailed information about the procedures and facilities to be followed to set up a company in Estonia.
Where to Start to Set up A Company in Estonia?
Setting up a company is a process consisting of different stages. The most important stage is finding a business idea. Matters such as the nature of the business, its analysis, and the capital required for its establishment should be considered in detail. At this point, getting help from an expert can make your job easier and save time.
Almost all entrepreneurs get excited at the beginning of the company establishment process in Estonia. This excitement should continue after the company is established. Otherwise, there is a possibility that business that is not done with the same enthusiasm will lead you to failure!
It should not be forgotten that there are different options in the company establishment process. There are generally six different types of entrepreneurship and these are;
- >>> Ordinary partnership,
- >>> Self-employed,
- >>> Trade association,
- >>> Public limited company,
- >>> Limited partnership,
- >>> Private limited company.
As stated above, the most preferred among these are private limited companies, while the least preferred are limited partnerships. If you have not yet decided to invest in one of the Baltic countries, you can also take a look at our company registration content in Latvia.
Experts focus more on the performance of the company after its establishment than on the timing of establishing a company in Estonia. Some even say that it is not important who starts first, but who progresses faster.
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Determining the Company Name
Another stage of the company establishment process in Estonia is finding the name. Although it may seem like a simple stage at first, sometimes it can get quite complicated. Because many companies have been opened and closed down until today and continue to be opened. Accordingly, it can be said that many company names have been registered. Therefore, there is a possibility that the company name you have in mind has already been taken.
Before determining the company name, the EMTAK code should be selected according to the field of activity. With this code, it can be checked whether an operating license is required or not before the company application.
After choosing the company name and EMTAK code, the setup phase can be started. Mobile identity PIN codes or an identity card will be sufficient for this. At this point, it is checked whether the company requires capital during the establishment phase. If capital is needed, the establishment of the company must be done in a notary or Enterprise Portal. It should be noted that if one of the founders is a foreigner who does not have an ID card of Estonian residency, the establishment must be done in a notary.
It is extremely easy and short to establish a company in Estonia via Enterprise Portal. This process takes only 5 minutes, as stated above.
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If there is a capital requirement for the company establishment, Enterprise Portal will guide you at this point. After the establishment application is filled and the articles of incorporation are prepared, the system guides about depositing the capital and paying the fee to the state. The minimum capital amount for a private limited company is set at 2.500 Euros. The amount to be paid to the state for company establishment is 190 Euros.
Opening a Bank Account to Establish a Company in Estonia
It is possible to establish a private limited company with or without a capital contribution through the Enterprise Portal. The initial account is required at this point for the cash capital contribution.
To establish a company in Estonia, after the initial account is created, the founders must deposit the amounts specified in the contract into this account. While depositing money into the account, an explanation such as “Capital Contribution” should be used. After these transactions, a payment order approved by the bank must be sent to the trade registry. Thus, information about the company will be registered in the trade registry.
In case the company is established in a notary, it is necessary to come to the office for the initial account. One of the founders or board members must apply for the initial account with the founding documents. Again, the capital transfer is made to the account opened in this way and sent to the trade registry.
After the company is on the trade registry, the account opened is converted into a customer contract. At this point, those with e-signature authority do not need to come back to the office. However, those who are not authorized must come to the office and sign the relevant documents.
The processes mentioned here usually take less than 24 hours. Once registered, the company can start paying employees’ salaries by concluding an e-tax contract with the tax office. Employees will also need to be registered in the registry.
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Setting up a company in Estonia is generally like this. If we reorder the stages briefly:
- >>> Finding the business idea
- >>> Choosing the company type
- >>> Determining the business/company name
- >>> Establishment
- >>> Job notifications and licenses (where required)
- >>> Registration with the tax office (mandatory if the annual turnover is over 40,000 Euros)
Although it is easy to establish a company in Estonia, additional documents may be required for foreign investors. Some procedures may require expert knowledge. Our experts, who have mediated the establishment of numerous companies in the Baltic countries, can provide you with professional service and perform all procedures on your behalf. You will save time and be protected from any bad surprises that may arise.
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Igors Krumins continues his activities as a commercial and international lawyer within the body of “Jurmala Invest”. He has more than 10 years of experience, especially in the investment sector, and has provided consultancy services to numerous companies with his legal expertise. He successfully completed his undergraduate studies at Baltic International Academy and graduate studies at Latvijas Universitate. Apart from his native Latvian language, he can also speak Russian and English fluently.