Incorporate · Europe

Company Formation in Estonia

Digital-first EU base that taxes profit only when distributed. Review the legal form, tax position, treaty network and indicative cost, then talk to one team that structures it end to end.

Licensed CSP
50+ yrs combined experience
15+ jurisdictions

Corporate tax: 0% on retained profits, 22% on distributed profits
VAT / GST: 24% (raised from 22% in mid-2025)
Formation: 1-5 days (faster with e-Residency)
Foreign ownership: 100% permitted
Tax treaties: 60+
Setup cost: USD 700 - 2,500

At a glance

Common entity: Private Limited Company (OU)
Formation time: 1-5 days (faster with e-Residency)
Setup cost: USD 700 - 2,500
Annual cost: USD 1,500 - 4,000
Foreign ownership: 100% permitted
Tax treaties: 60+

SaaS and technologyE-commerceConsulting and servicesHolding companyIP and licensing

Best for

Bootstrapped SaaS reinvesting profits
Remote-first founders using e-Residency
EU market access with light admin

Less ideal for

Founders needing to distribute profits frequently
Those wanting privacy off a public register

Legal and formation

Legal system	Civil law
Common entity types	Private Limited Company (OU)
Formation timeline	1-5 days (faster with e-Residency)
Minimum capital	EUR 0.01 (no fixed minimum since 2023)
Foreign ownership	100% permitted
Minimum shareholders	1
Minimum directors	1
Local presence	Registered office in Estonia (and a contact person for non-residents) required
Public registry	Directors, shareholders and beneficial owners on the public business register
Audit	Audit only above statutory thresholds

Tax profile

Corporate income tax	0% on retained profits, 22% on distributed profits (from 2025)
VAT / GST	24% (raised from 22% in mid-2025)
Withholding, dividends	0% on regularly taxed distributions
Withholding, interest	0%
Withholding, royalties	10% (treaty reduced)
Capital gains	Taxed only on profit distribution
Territorial system	No
CFC rules	Yes
Participation exemption	Distributions from qualifying subsidiaries can be redistributed tax-free

Every figure above is indicative. Rates, thresholds, minimum capital, ownership rules and timelines change and vary by activity, licence and structure. They are confirmed with the relevant authority and in a tailored quote before you rely on them. This is general information, not legal or tax advice.

How to set up in Estonia

1
Obtain e-Residency (for non-residents) or verify identity locally
2
Confirm the company name and appoint a local contact person
3
Provide an Estonian registered office address
4
Register the OU online through the e-Business Register
5
Register for VAT if thresholds are met and open a banking or EMI account

Banking reality

Local banks are cautious about companies with no Estonian ties and often decline them, so most e-Residency founders rely on fintech and EMI providers rather than traditional bank accounts.