Estonia, a Baltic country located in northern Europe, has become a hotspot for modern digital businesses. Thanks to a business-friendly government and streamlined digital services, it’s quite straightforward for foreign entrepreneurs to set up shop here. If you’re from India and thinking about starting a business in Estonia, you’ll find the process smooth and welcoming as long as you meet the necessary requirements.
How to Register a Company in Estonia from India?
Indian citizens can easily register a company in Estonia using Estonian e-Residency. This program is available to people from all nationalities and is especially great for entrepreneurs, consultants, digital nomads, or freelancers.
The following steps to register a company in Estonia from India includes:
- Apply for e-Residency: You have the option to submit your application for e-Residency online and collect the card in New Delhi.
- Choose a company name and check availability: You have the option to utilize the complimentary tool provided on the e-Business Register‘s website to verify the accessibility of company names.
- Obtain a legal address and contact person: The designated individual facilitates communication between the Estonian authorities and yourself. There are service providers accessible to assist in setting up a valid Estonian address and contact person.
- Register your company online at the company registration portal: You can pay the state fee online when you submit your application.
- Receive confirmation: After your company has been successfully registered, a confirmation notice will be sent to you by the e-Business Register.
- Open a bank account: To effectively manage your local operations, it is essential to open a bank account. In case you are dealing with multiple countries.These accounts can assist you in conducting low-cost international transfers.
Types of Companies in Estonia
Private Limited Company (OÜ):
- The most popular choice for entrepreneurs.
- Requires a minimum share capital of €2,500.
- Limited liability for shareholders.
- Suitable for small to medium-sized businesses.
Public Limited Company (AS):
- Designed for larger businesses.
- Requires a minimum share capital of €25,000.
- Shares can be publicly traded.
- Suitable for businesses planning to list on a stock exchange.
Sole Proprietorship (FIE):
- Ideal for individual entrepreneurs.
- No minimum capital requirement.
- The owner has unlimited liability.
- Simple to set up and manage.
General Partnership (TÜ):
- Formed by two or more partners.
- No minimum capital requirement.
- Partners have unlimited liability.
- Best for businesses where owners want to share management responsibilities.
Limited Partnership (UÜ):
- Consists of at least one general partner with unlimited liability and one limited partner with liability limited to their investment.
- No minimum capital requirement.
- Combines elements of partnerships and corporations.
Branch Office:
- For foreign companies looking to establish a presence in Estonia.
- Not a separate legal entity but an extension of the parent company.
- Must appoint a local representative.
Commercial Association (Tulundusühistu):
- A cooperative formed to benefit its members.
- Members contribute capital and participate in decision-making.
- Suitable for collaborative ventures like agriculture or housing.
Requirements to Incorporate a Company in Estonia from India
- Please ensure that you have all the necessary documents ready for your e-Residency application, including your CV, motivation statement, a copy of your travel document or ID (such as a passport), and a digital passport photo.
- Make the payment online using a Visa or Mastercard, with fees ranging from €100 to €130 EUR.
- Once approved, collect your e-Residency card and kit at the Estonian embassy in New Delhi. Don’t forget to bring your ID.
- Complete the online application process on the Estonian Police and Border Guard Board website.
- Keep track of your application status online, as the decision may take up to a month. You will receive an email if additional information is required.
- Set up your card by installing the provided ID software online. Delivery of the card may take two to five weeks.
After obtaining your e-Residency card, you are able to initiate the procedure of setting up your business in Estonia. If you require assistance in navigating through this process, it is advisable to engage the services of an expert service provider specializing in Estonia. These professionals can offer guidance in various areas such as company formation, international and domestic tax consultation, opening a bank account, providing a legal address, and establishing a contact person.
Cost to Start a Business in Estonia for Foreign Entrepreneurs
The expenses associated with operating a business in Estonia are influenced by various factors, such as the size and nature of the business, the industry it operates in, and its location. Nonetheless, there are standard costs that all Estonian companies are required to cover:
- Government fees: These include charges imposed by the Estonian government, such as the registration fee for companies. Private limited companies are also obligated to pay an annual business license fee of €100 EUR. Refer to the subsequent section for details on the registration costs based on the company type.
- Accounting and tax preparation: It is advisable for all Estonian businesses to engage the services of an accountant for the preparation of financial statements and tax returns. The cost of accounting services may vary depending on the scale and complexity of the business, with prices starting from €50 EUR per month.
- Bank charges: Estonian banks levy a range of fees on business accounts, including monthly maintenance fees and transaction charges. The expenses related to bank fees will be contingent on the bank selected and the specific services required.
- Miscellaneous expenses: Other typical costs for Estonian companies encompass rent, utilities, employee salaries, and marketing expenditures.
Taxation for Estonian Company
The Estonian government imposes a monthly tax that is levied only when profits are distributed. The corporate tax rate stands at a flat rate of 20%. If your annual taxable turnover falls below €40,000 EUR, there is no obligation to register for VAT. The Estonian government’s taxation website provides valuable information to assist in tax payment planning.
Business Immigration Opportunities for Estonia from India
Estonia’s e-Residency program provides a digital identification that allows individuals to start and manage a business remotely in Estonia. Ideal for entrepreneurs, freelancers, consultants, and digital nomads, e-Residency does not serve as a travel visa. Those planning to visit or work in Estonia must obtain the appropriate visa, as tourist and most student visas do not permit earning an income. Indian citizens need specific visas for their activities, and Estonian employers must sponsor employment visas for on-site work.
Additionally, Estonia offers the Digital Nomad Visa for remote workers with an active employment contract and a minimum monthly income of €4,500. This visa supports both short and long-term stays in the country. While e-Residency facilitates digital business operations, obtaining the correct travel or work visa remains essential for those intending to visit or work in Estonia.
