It is believed that advantages of Estonia are stability and simplified tax system. In 1999, Estonia joined the World Trade Organization in 2004, joined the European Union. Major trading partners – Finland, Sweden, Germany and Russia. The official language is Estonian, also is widespread the Russian language, that is very convenient. Thinking about current trends in the globalization of business, many businessmen are considering or probably in the future will consider entering the Baltic area. We offer a wide range of legal services to support business in Estonia.
Our company offers almost all services for organization your business. From company establishment or purchase ready-made companies to its liquidation or sale of developed business. Also, we maintain the company’s activities, providing legal assistance and accounting services. We can guarantee best quality and successfully resolve difficult and unusual situations carefully delving into the matter. For our clients in Estonia, we offer:
• Legal services (corporate, civil, administrative, labor, immigration law)
• Support of real estate business
• Incorporation and administration of companies
• Merger, division and liquidation of companies
• Accounting and auditing services
• Tax advices • Protection of trademarks, patents, utility models
• Assistance in visa applications and residence permits
For small and medium business with number of up to 10 owners fit a limited liability partnership (LLP). This is the popular form of companies in Estonia (information about other incorporation is available on request). The founders are legal and natural persons, residents and non-residents. LLP is a company with limited liability, with simple structure and minimum size of authorized paid-in capital 2 500 EUR. From 2011 possible to establish LLP without paid authorized capital. In this case, owners are liable for the obligations of LLP with their personal property until paid this capital (personal responsibility).
We offer two variants – purchase ready-made company and incorporate of a new LLP. Standard order involve one founder (one board member). For paperwork to come to Estonia is not necessary because everything can be done remotely. The most convenient and fastest is registered company. Variants offered by us without a business activity history.
Information and documents required from client:
1. Versions of company name.
2. Copies of passports, proof of residence address of the owners, details of nominal value of shares. If the founder a legal entity, requires name and registration number, also appropriate resolution.
3. Copies of passports, proof of residence address of members of the Board.
With provided information we prepare required forms, which client must be notary certify at their location, and then sent originals to Estonia. If all documents is correct, changes in companies (including a change of ownership) made within 5 working days from date submit to Commercial Registrar. Registration of deadline for new company up to 10 working days from date of filing.
The decisions taken at meetings of founders, the Board convened. The Board shall convene a meeting to approve financial statements for year and profit sharing, as well as in other cases provided by law. The Board organizes accounting in accordance with the Law. For example, account of current activity, salary (if necessary), preparation and filing of tax returns, preparation and submission of annual report at end of fiscal year.
Audit review required, if have the following conditions (in accordance with the Law on Accounting § 3, p.14 (3)):
1. at least two of the three points in the financial statements exceeds the following figures:
– Income from sales or profit over 1 000 000 EUR
– Assets at December, 31 of the year
– 500 000 EUR
– Average number of employees 15.
2. at least one of the three points in the financial statements exceeds the following figures:
– Income from sales or profits of more than 3 000 000 EUR
– Assets at December, 31 of the year – 1 500 000 EUR
– Average number of employees 45.
Taxation of Estonian companies is quite low and simple. Tax on undistributed profit is 0%. Since 2000, Estonia has introduced a 0% rate of income tax (tulumaks) to legal entities. This is only for retained profit. If founders decide to distribute profits as dividends, company pays for them additional income tax of 21/79 (around 25.6%). If profit is not distributed, and for example, to refinance a business, then there is no tax.
VAT (käibemaks) in Estonia is 20%. This tax for sale of goods and provision of services for business in the territory of Estonia and imports of goods and services to Estonia. In some cases, sales tax rate is 9% (books, medicines, tickets to concerts), and sometime 0% (exports of goods and services from Estonia). If businessman providing services or selling goods outside Estonia, they are not subject to VAT.
Registered in Estonia employers (including foreign legal entities) are required to pay special social tax on all payments to employees, except in cases established by law. Employees themselves do not pay social tax, for its payment responsibility of employers. If company has no other employees, except the board member, he takes his own decision to pay his salary or not.
To freedom Estonian companies from income tax without distribution of profits was to increase domestic and foreign investment to economy. Essentially, it is a significant advantage in competition for foreign capital. Another attraction is fact that now Estonia has signed more than 40 agreements on the avoidance of double taxation (Kazakhstan, Ukraine, Belarus, Latvia, Lithuania, etc.). At movement of capital to and from Estonia there are no restrictions. Estonian companies are increasingly having a role of parent companies and investors in development of business in other countries as holding structure. So, almost all opportunities for needs of your business.