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How to start a business in Estonia: Requirements and steps
Look how easy it’s to start a company in Estonia! Do it online without having to travel to this country.
As a foreign entrepreneur considering opening a company in Estonia but unsure where to begin, today we’ll answer every question in this article dedicated to explaining how to expand your business into this destination. Understanding the country’s taxation system and the administrative procedures required for starting commercial activity in Estonia remains essential.
Therefore, we prepared a post where we explain the main costs in detail, which company structures are available, and the requirements you must meet. We’ll also review corporate taxation in Estonia and whether tax benefits exist for attracting foreign talent. Stay with us for an organised overview that helps you launch your business successfully and discover the 100% online e-Residency programme simplifying every procedure.
How Much Does It Cost to Open a Company in Estonia?
The total budget required for opening a company in Estonia varies according to the company structure you choose, the country’s tax obligations, the business activity performed, or whether you manage everything personally or hire an advisor.
Generally, the cost of living in Estonia remains far lower than in other European countries, which also reduces your business expenses. For example, if you open a company independently as a sole trader, your first-year costs may range from €365-600 ($428-700). However, if you hire a consultancy to manage everything, the budget increases to around €1,300 ($1,524) or more, with maintenance costs ranging between €229-3,159/year ($268-3,705) depending on the activity. Below, we explain the main expenses:
- e-Residency application: An online portal created by the Estonian government for simplifying company incorporation, requiring a one-time payment of €150 ($175).
- Company registration: State fee of €265 ($310).
- Minimum share capital: From €0.01 ($0.01) up to €2,500 ($2,926).
- Registered address and contact person: Mandatory if you don’t reside in Estonia, costing between €200-400/year ($235-468).
- Accounting and management: From €50/month ($58) onwards.
Which Types of Companies Can You Open in Estonia?
Estonia may possibly be Europe’s easiest country for foreigners starting a business, because you don’t need residency for opening a company there. You can manage everything online thanks to a digitalisation programme created by the Estonian government for facilitating investment from international entrepreneurs.
You may choose between different legal structures depending on invested capital, although the most recommended and widely used option for foreigners remains the OÜ limited liability company. You may create this company structure entirely from scratch through the e-Residency programme. The following table compares the different company types available in Estonia:
| Company type | Features | Recommended |
|---|---|---|
| Sole trader (FIE) | No minimum capital | Freelancers, although generally not recommended for foreigners |
| Limited liability company (OÜ) | Minimum capital from one cent. You may create it 100% online | Freelancers, ecommerce, startups |
| Public Limited Company (AS) | Minimum capital of €25,000 ($29,266). Allows issuing shares | Large companies, banks, investor-backed projects |
| Foreign company branch | Extension of an existing company | Foreign companies wanting to establish operations in Estonia |
Requirements for Opening a Company in Estonia
Although, as we already mentioned, opening a company in Estonia remains highly accessible for foreigners, certain legal and administrative procedures still apply. Review the following list carefully and ensure everything remains prepared in advance:
- Tax address: If you aren’t a resident, you must provide a registered address in Estonia together with an authorised local contact person acting as liaison with authorities.
- Corporate bank account: This may belong to a local bank or a European fintech institution where you deposit the company’s initial capital.
- Share capital: For a limited liability company, the legal minimum remains one cent, although businesses commonly declare around €2,500 ($2,926). You don’t need to deposit it immediately because authorities only request a declaration initially.
- Registration with the Business Register: You may complete this online within minutes through e-Residency by declaring the company name, activity, and shareholders.
- Ultimate beneficial owner identification: You must declare the company’s real owner as a mandatory requirement under European transparency regulations.
- Licences and permits: Certain activities require licences, including finance, cryptocurrency, and other regulated services.
- Incorporation timeline: Through the e-Residency platform, you may open a company in Estonia within one day. However, completing the process through a notary takes several days longer.
Taxes for Opening a Company in Estonia
The Estonian tax system remains one of the world’s most attractive for digital entrepreneurs because it functions differently from the rest of Europe. In Estonia, companies don’t pay taxes on earned profits until withdrawing them, making it an ideal destination for reinvestment and business growth.
For example, corporate tax remains 0% when reinvesting company profits and 22% when distributing dividends. Regarding VAT, the standard rate has stood at 24% since 2025, with reduced rates of 13% for accommodation and 9% for books and medicines. VAT registration becomes mandatory once annual revenue exceeds €40,000 ($46,826).
If you open a company in Estonia requiring employees, you must pay 33% for corporate social security contributions together with an additional 0.8% plus 1.6% unemployment insurance contribution for every employee.
Unlike most European countries, Estonia doesn’t apply significant municipal corporate taxes because the entire tax system remains centralised, making everything considerably simpler and more streamlined.
Steps for Opening a Company in Estonia
As we already explained throughout this article, the steps for opening a company in Estonia remain relatively simple and fast. Everything works thanks to the digital e-Residency programme designed for foreign investors wanting to establish businesses in the country. Within only a few days, you may complete every procedure from home without travelling. We’ll explain how in the following sections.
1. Apply for e-Residency
If you don’t reside in Estonia, you must apply for e-Residency in order to operate online. This programme provides a digital identity allowing you to sign documents officially and access every administrative procedure necessary for opening a company.
You can manage this application through the Estonian Police and Border Guard Board website. The application costs €150 ($175), and you may collect your e-Residency kit from more than 50 locations worldwide within approximately two to five weeks.
2. Create and Register the Company
Once your e-Residency becomes active, you may incorporate and officially register your company in Estonia. For this process, you must choose the company name, define the activity, identify shareholders, draft the bylaws, and sign everything digitally. The entire process happens online, in English, costs €265 ($310), and usually takes less than one hour.
3. Open a Bank Account
Through the e-Residency platform, authorities recommend opening a bank account with a digital neobank based in the European Economic Area (EEA) for operating digitally from any country. You may open this account online with estimated costs ranging between €0-200 ($0-234), depending on the chosen bank and applied fees.
4. Hire a Registered Address and Contact Person
The next step involves obtaining a registered office address together with a contact person guaranteeing communication between your company and local authorities. This procedure remains mandatory for companies located outside Estonia.
5. Comply with Taxes and Accounting Requirements
As a final step, you only need to register for VAT if you expect annual revenue exceeding €40,000 ($46,826) and hire an advisor helping with accounting. From this point onwards, you may begin issuing invoices, working with international clients, and managing your business 100% online.
Internet for Business Trips to Estonia
If your plans involve travelling regularly to Estonia for managing your company, meeting suppliers or visiting potential investment locations, having global internet connectivity remains essential. Estonia operates as a fully digitalised country, so every payment and administrative process depends on remaining connected to a secure network.
Do you know about Holafly’s monthly plans? They provide the ideal solution for business travellers like you. With a 25 GB or unlimited data subscription, you may connect several devices simultaneously, which remains essential for efficient remote working. Additionally, you won’t need to change your eSIM whenever travelling because it works across more than 160 destinations under the same plan.
However, that’s not all because one of Holafly’s most attractive features remains Always On, providing 1 GB free every month whenever you decide to end your subscription. Consequently, you’ll always stay connected across more than 70 countries during emergency situations.
Frequently Asked Questions About Opening a Company in Estonia
Yes, Estonia remains one of the few countries worldwide where you may create a company 100% online from home thanks to the e-Residency programme.
No, residency isn’t necessary. However, you must hire a registered tax address in Estonia together with a local contact person managing administrative procedures with Estonian authorities.
The most recommended structure remains the OÜ limited liability company because it offers greater flexibility, lower costs, and completely online management.
Once your e-Residency becomes active, you may create a company in Estonia online within approximately 15 minutes. The complete process, including the e-Residency application, usually takes several weeks.
Yes, this remains a mandatory step for opening a company in Estonia, although it doesn’t need to belong to a local bank. In fact, using European neobanks usually works better.
