How to Self-Register an Estonian Company

Estonia has become a popular business jurisdiction for location independent entrepreneurs, thanks in large part to its e-Residency program. e-Residency allows participants to directly access government business registration services, negating the need to hire a company formation agent. In this guide, I explain how to register an Estonian company, how to setup banking, payment processing etc and how to handle ongoing compliance.

Step One: e-Residency

Estonia’s e-Residency program is a digital ID program, it enables participants to electronically sign documents and access government e-services. It should not be confused with an actual residency program. It does not grant residency rights to Estonia nor does it confer Estonian tax residency. Importantly, it does not grant access to Estonian and European services on its own (banking, for example).

You must apply via the e-Residency website. The process costs 100 EUR (there is a 20 EUR surcharge if applying outside of Estonia) and takes approximately 3-8 weeks to complete. If approved, you will have to visit the pick up location you selected in your application to get fingerprinted and collect your card. e-Resident cards are usually valid for five years after which the application process must be repeated to order a new card.

Step Two: RIK

Once you have received your e-Resident card, you will need to download and install the e-ID software on your computer. Unfortunately, it is not yet possible to use the e-Residency card with a iOS or Android device.

You will then need an Estonian mailing address and a local contact person. Multiple services providers offer this service, typically for 100-200 EUR annually (search on Google “Estonian address and contact person package”).

Once you have your address and contact person sorted, navigate to and click on “LOGIN”. Select “Estonian ID-card” and follow the instructions. Once logged in, click on “Submission of application” and then select “Private Limited Company” under “Registration of a new enterprise”. Follow the prompts until you are on the company information page. There you can enter your desired business name, address, share capital (the standard amount is 2500 EUR, make sure to tick “Establish the company without making capital contribution”), your details and that of your contact person, the articles of association (the template they provide works fine for most business needs) and details regarding your business activities. Once you have entered all required information, you can complete the registration by signing the petition and submitting it for approval. Before the petition can be submitted, you will have to pay the registration fee. As of 2023, it is 265 EUR. Typically, your company registration will be approved within 1-3 business days.

Step Three: Banking

Banking is Estonia’s Achilles heel, it often is very challenging to open a local bank account, even as an e-Resident. If you are from a high risk country, or if your business is higher risk, it can even be impossible. In my experience, only one local bank will work with Estonian companies owned by non-residents, LHV. In most cases, you will need to travel to Tallinn to open an account with them. You will need to schedule a meeting in advance and you will need to bring along supporting documentation, such as invoices, contracts, details of your products / services etc. Accounts at LHV are not opened on the spot so you will need to wait for a few days / weeks after the meeting until you know if your application has been approved. If it has, your debit card will be mailed to your registered address.

If you do not need an Estonian bank account, or if you cannot open one, you can instead choose an EMI. Wise is the most popular, other options include Revolut, Payoneer and Airwallex.

Another option is to open a foreign bank account, preferably in a Eurozone country (to ensure that you can connect the account to services like Stripe).

Step Four: Share Capital

Once you have completed your company registration and opened a business bank account, you will have to pay in the share capital to complete the process and enable the payment of dividends. Do note that if you selected the standard 2500 EUR (or up to 24999 EUR) share capital contribution at registration and do not plan to pay out dividends, you can delay the payment of the share capital for up to ten years. If you selected a share capital contribution of 25000 EUR or more, you will have to pay it before commencing business.

The easiest method to pay in the share capital is via a bank transfer. Simply transfer the total amount due into your business bank account, from your personal bank account, with “share capital” entered in the description box. Get in touch with the bank and ask them to provide you with a share capital payment letter in Estonian. All local Estonian banks will be able to provide you with this document, as well as Wise. For other non-Estonian banks / EMIs, you will have to ask for a letter confirming the share capital payment in English and then have an Estonian certified translator translate the letter into Estonian (the final file will have to be contained within a .bdoc). Once you have the letter, log into RIK and select your company. Click on “Start the petition for an entry regarding alteration” and then “Alter the capital” in the Capital section. Untick the “Established without making a contribution” box, click on “Save the changes” and then “Check the details of the entry petition”. Confirm your details and upload the bank letter in “Additional documents to be submitted with the entry petition”. Click on “Check the details of the entry petition” again and the on “Confirm the petition”. You will need to pay a small fee before being able to complete the submission.

An alternative method to pay in the share capital is with physical cash. You can use this template in lieu of a bank letter (you will have to have it translated into Estonian), the rest of the process is the same.

Step Five: Services

Stripe, PayPal and Mollie are all available in Estonia. You do not need to have a physical establishment in Estonia nor an Estonian bank account to apply, although you will need a traditional business bank account for Mollie. You can sign up directly on their respective websites, the process is similar to that in other countries.

Step Six: Ongoing Compliance

The only filing you will have to complete to keep your Estonian company compliant is the annual report, assuming you do not have Estonian resident employees, do not pay yourself a board member salary and have not registered for Estonian VAT.

As the name implies, the annual report is filed on an annual basis. More precisely, it is filed in the six months that follow the end of every fiscal year for your company (that is usually the calendar year, unless you have elected to use a different period). The annual report can be filed electronically via the Company Registration Portal.

To begin the filing, navigate to the login page of the Company Registration Portal. Click on “Login” in the top right corner. You can login via Smart-ID (recommended) or via your e-Residency / resident card. Once logged in, click on “Annual reports” in the top menu.

On the Annual Reports page, click on “Add new report”, select your company in the dropdown menu, make sure the dates shown are accurate, select “Annual report” in the “Type of report” dropdown menu and then click next. On the next page, make sure that “Consolidated report” is set to “No”, “Category of reporting forms” is set to “Mikroettevotja”, “Selection of standard” is set to “Estonian financial reporting standard”, “Compile annual report also in English” is set to “Yes” and then click on “Add new report”. If you filed an annual report for the previous fiscal year, the system will ask you if you wish to use it as template for this year, select “Yes” in the dropdown menu and re-click on “Add new report”.

On the report page, click on “Filling in reporting forms”. Navigate to the “Selection of reporting forms” tab and make sure that “Statement of financial position”, “Income statement”, “Accounting policies”, “Labor expense” and “Related parties” are selected.

Once that is done, navigate back to “Main reports” and click on the “Enter” button right next to “Statement of financial position”. In “Current assets”, enter the total cash the company holds (minus the share capital). In ”Non-current assets”, enter the share capital (unless you elected to issue more capital, that will be 2500). In “Current liabilities”, enter the total debt the company owes. In most cases, you can enter “0” in all the other liabilities boxes. In “Total equity”, enter the difference between assets and liabilities (”Total assets” – “Total liabilities”). In “Incl. issued capital”, enter the same amount. In “Incl. unpaid capital”, enter the amount of paid in share capital. For example, if you have issued 2500 of share capital but have not yet paid any in, enter “-2500”. If you have paid in all issued share capital, enter “0”. Do not fill in the bolded categories as they will automatically be filled in when you click on the “Save and calculate totals” button. Once you have saved the form, click on the “Back to the view of reporting forms” button.

Once you are done, click on the “Save and calculate totals” button, then on the “Back to the view of reporting forms” button. Click on the “Enter” button next to “Income statement”. In this form, enter the totals for each relevant categories. Enter “0” when not applicable. If you use your company as a partner / member in a foreign transparent entity (CA LLP / LP, US LLC, UK LLP), enter any profits (or losses) attributed to the Estonian company in the “Profit (loss) from subsidiaries” box. Again, do not fill in the bolded categories as they will automatically be filled in when you click on the “Save and calculate totals” button. Once you have saved the form, click on the “Back to the view of reporting forms” button.

Navigate to the “Notes” tab and click on the “Enter” buttons next to each of the notes. In note 1 you must ensure that “Yes” is selected, in note 2 you should enter “0” in every boxes (assuming you have no local employees), in note 3 you should enter “0” in every boxes. Once you are done (make sure you saved every forms), click on the “Back to the main view of the report” button.

On the main view of the report page, navigate to the “Breakdown of sales revenue” section. Here you must breakdown your revenue using activity codes. Distributions received from a CA LLP / LP, US LLC, UK LLP should be attributed to the 64201 activity code. Once 100% of your revenue is attributed, return to the main view of the report page. Navigate to the bottom of the page and click on the “Continue to the next step” button.

On the report review page, click on the “Send the report to signing” button. On the next page, click on the “Digital signing of the report” button.

It is now time to plug in your smart card reader, and to insert your e-Resident / resident card in it. Once that is done and the card has been detected, click on the “Add a digital signature to the report” button. On the Digital signature page, click on “Sign the document” button. Leave the “Role in terms of signing the annual report” box as is and click on “Please sign the report”. This will prompt you to enter your PIN2 code.

Once you have signed the report, you should download copies in both Estonian and English for your records. Before you can submit it, you must inform the registry of your intentions regarding the distribution of dividends. You can do so by clicking on the “Enter” button next to “Profit distribution proposal”. Do note that there is no requirement to distribute dividends, you can indefinitely retain earnings within the company. Once you have completed the profit distribution proposal, you can go ahead and submit the report by clicking on the “Submit the report to the register” button. Once submitted, the registry will process it within a few business days. You will receive a notification once that is complete (usually from the courthouse in Tartu). Congratulations, you are now good to go for another year!

Other considerations

EU VAT may be an important consideration, depending on what you sell and to whom you sell it to.

If you operate from a country other than Estonia, permanent establishment rules will be an important consideration. CFC rules are unlikely to be a consideration, in most cases, but it is nonetheless a good idea to familiarise yourself with them by reading my guide here.

For reference, you can access the full list of tax treaties signed by Estonia here.

If you wish to dissolve your Estonian company, I recommend reading this guide for details on the procedure, timeline and cost.