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FAQs of Estonian E-Residents

We have collected the most popular questions that Estonian E-Residents have asked in the Facebook community. These in-depth answers should give you a clear picture of what E-Residency is all about – and also what it’s not.

What is Estonian E-Residency?

E-Residency is your digital identity and enables you to open and manage Estonian company – 100% online. It’s a perfect solution to minimise costs and bureaucracy of running a business.

What is the price of the e-residency card?

100€

Where can i apply it?

How long does it take to get my e-residency card?

It’s usually 4-6 weeks.

Do you assist with visa's and residence permits?

We do not assist with visa nor residence permits. Our services are only for businesses.

What services do you provide?

Our Zero to Scale subscription includes everything that you need to run your business – virtual office, contact person service, accounting, compliance, banking marketplace, and growth lab to build a successful e-residency business.

What kind of businesses can you do?

You can do all kinds of businesses with the e-Residency company, but it’s the most suitable for online businesses. Brick and mortar stores, construction companies and other offline businesses will likely not able to extract benefits from this opportunity.

How can I register for a new company?

Company registration is part of our Zero to Scale subscription. It’s a quick, fully online process. If you don’t have an e-Residency card yet, you have to start from applying for the card first.

I am not sure about my subscription?

No problem, get in touch with us and our dedicated support will help you to figure out the most suitable Zero to Scale subscription.

How much does it cost to register a company?

We charge 350€ (+ VAT 20% if applicable) for onboarding to Zero to Scale, which also includes the state fee (190€). This is a one-time cost.  Pricing of registering a Public Limited Company in Estonia and incorporation without the e-Residency card is given on request.

How long does it take to register a company?

Once you have the e-residency card, it takes 1-2 days to register a company via Zero to Scale subscription.

Do i need an address in Estonia?

You don’t need a personal address. Your company, however, has to have a legal address in Estonia. Legal address is part of the Zero to Scale subscription.

Getting Estonian phone number?

There are multiple ways to get the Estonian phone number:

TravelSim, Skype, MessageBird.

How to manage the Estonian company?

Managing the Estonian company is simple. In the case of the Limited Liability Company (OÜ), you have two legal functions: Shareholders and management body members. Shareholders appoint the board members and have the power to call back the board members. However, the board member is the one who is liable for company activities and who has representative rights for the company. The management board is the governing function of the company. All your company management functions can be carried out through Zero to Scale and our support team.

Is my name public in the Estonian company registry?

Yes, it is. Estonian business registry is very transparent and nominee directors are not allowed.

Who can be a board member of the Estonian company?

Only physical persons can be members of the management board. You can’t be politically exposed person nor have any business restrictions from other countries.

Can I change my Estonian company name?

Yes, you can change your company name anytime on Estonian business portal or via Estonian notary.

How to close my company?

The company can be closed by appointing a liquidator. From there, the liquidator is responsible for closing the company. The liquidator has to be an Estonian resident. Read our article on how to appoint a liquidator here:

https://e-resident.me/dissolving-estonian-company-appointing-liquidator/

What is auditing and inspection and when is it mandatory?

If you opened an Estonian company via your e-residency card and business has grown, then you might need to look upon your financials – if they exceed a certain threshold you might need to be inspected or audited.

Auditing is the review of the company’s annual report, provided that the information that it provides is correct and reliable.

Inspections is the same as auditing but it’s more of a summary assessment. The inspection is less costly.

Audit needs to be done by a sworn auditor and it can’t be done by the same firm or person who does your books i.e. he/she needs to be independent.

Auditing is mandatory if certain measures are meant. Also, the audit can be done before the measures are met if the company decides so.

The audit is mandatory if two of these measures are met

  • Revenue 4 000 000 €
  • Assets value 2 000 000 €
  • Average no. of employees 50

The audit is mandatory if one of these measures are met

  • Revenue 12 000 000 €
  • Asset value 6 000 000 €
  • Average no. of employees 180

Inspection is mandatory two of these measures are met

  • Revenue of 1 600 000 €
  • Asset value 800 000 €
  • Average no. of employees 24

Inspections in mandatory if one of these measures are met

  • Revenue 4 800 000 €
  • Asset value 2 400 000 €
  • Average no. of employees 72

Estonian company taxes?

Estonian company corporate tax rate is 0%. The dividend tax rate is 20% on gross dividends. Salaries are taxed in the country where the employee/recipient of the salary resides. Board member salary is taxed with 20% income tax and 33% social tax. Find more information on taxation from our blog.

What are the accounting costs of the Estonian company?

Zero to Scale subscription which includes monthly accounting, tax compliance and an annual report starts at 89€ (+ VAT 20% if applicable) per month.

Do I need to submit annual reports?

Yes, an annual report is submitted once a year. It’s mandatory for all Estonian companies.

What is the VAT rate in Estonia?

The VAT (Value Added Tax) rate in Estonia is 20%. Please use the search function on our blog for more information on the VAT rules in Estonia and Europe.

How to open a bank account?

Zero to Scale has an integrated banking marketplace with more than 60 banks and Fintechs. Currently, you still need to travel to Estonia for identification, if you want to open an account in Estonia. It’s not easy though, as if the business has no connection to Estonia, then banks may decline to open an account for you. You can open an account in your own country (for the company) or use Fintech companies, such as Transferwise Borderless, Paysera, Payoneer, Revolut, SatchelPay, Pervesk, etc.

Do you allow multiple shareholders?

Yes, we allow multiple shareholders. We allow most company structures, and we can help to create documentation to manage the relationships between the shareholders.

Can Estonian company be a shareholder in another company?

Yes, Estonian company can be a shareholder in other companies as well. Depends on the jurisdiction of the other company, but it’s likely you’ll need to extract the relevant information from the Estonian business registry, apostille it and post it to the country where you’re buying shares. In general, these documents cannot be older than 3 months.

Can I add shareholders in the future?

You can add more shareholders in the future.

Can I remove shareholders in the future?

Yes, you can remove shareholders from the Estonian company.

Do I have to have the shareholder agreement?

It’s not mandatory to have a shareholder agreement, but it’s strongly recommended. Please read our article here:

https://e-resident.me/shareholder-agreement-for-e-residency-companies/

Can legal entity be a shareholder of the Estonian company? Can it be a foreign company?

Yes, the legal entity can be a shareholder of the Estonian company, and it can also be a foreign company. In this case, e-residency card cannot be used, and we have to register the company via notary using the power of attorneys. You need to extract relevant data about the legal entity from the registry, apostille and translate the company documents, and deliver them to us by post. You can also visit Tallinn. The exact process is described on a case by case basis upon request.

How to add new board members to Estonian company?

You can add new board members via Estonian e-business registry if the new board member has the e-residency card. If the new board member does not have an Estonian e-residency card, then we’ll need to use notary services.

What is the liability of the board member?

Board members are liable for all company activities. If you are appointing a different board member as a shareholder, you need to have full trust in this person.

Do all board members have to be shareholders?

No, a board member does not have to have any shares in the company.

Can I invest into other companies and assets?

Yes, you can. You can invest in startups, crowdfunding platforms, cryptocurrencies, stocks, bonds, gold, silver and so forth – it’s up to you how you want to diversify your investments and grow company assets.

Can I loan money to the company?

Yes, you can loan money to the company.

Can I loan money from the company as a shareholder?

No, it’s not allowed to loan money from the company to the related persons.

What’s the required share capital?

2500€ for LLC (OÜ), and 25 000€ or Public Limited Company (AS). For LLC, you can postpone paying the share capital.

How can I pay share capital?

Share capital can be paid via Estonian credit institutions or using online banks like TransferWise Borderless. It’s important that the bank can provide a digitally signed proof of payment. You can also do a non-monetary share capital contribution, which can be Bitcoin, laptops or any other asset which value can be assessed.

How to pay dividends and how much?

Dividends can be paid from previous years profits and distribute as often as you like. But we would suggest paying dividends a few times a year (for example 1-4 times a year)

There is a regular dividend distribution law in Estonia which enables the company to pay only 14% income tax if dividends are distributed every year. This law benefits companies where another legal entity is a shareholder.

Regular dividends are taxed with 20 % income tax from the gross payment. If you decide to pay out 10 000 € in dividends, you would need to pay 2 000 € of income tax and you would get 8 000 € net payment.

Can I pay out money from the account when closing the company?

Yes. You can either distribute dividends, pay liquidation proceeds (taxed as dividends) or pay salary to yourself. Please note that if you have paid in the share capital, you can withdraw the share capital tax-free.

How to receive money from your Estonian company?

There are to options to distribute money from your Estonian company:

Receive a salary
Receive dividends

Salaries are usually taxed in the country of the residency of the employee/recipient of the salary. You as a shareholder can also be an employee in the company simultaneously.

Dividends are taxed in Estonia.