Estonia is one of the most advanced digital nations in the world and a pioneer in e-governance. Through its unique e-Residency program, Estonia allows entrepreneurs from anywhere in the world to establish and manage a company entirely online. For startups looking to enter the European market with low bureaucracy and cost-efficient structures, Estonia is an attractive option.
Below is a comprehensive, step-by-step guide on how to register a company in Estonia online, along with the benefits, requirements, and practical considerations.
Why Choose Estonia for Company Registration?
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E-Residency Program: Provides a government-issued digital identity to non-residents.
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100% Online Incorporation: No need to be physically present in Estonia.
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EU Market Access: Your company will be legally recognized across all EU member states.
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Tax Advantages: 0% corporate tax on reinvested profits; only distributed profits are taxed at 20%.
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Transparent Legal System: Fully aligned with EU regulations.
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Startup Ecosystem: Strong tech and fintech environment with investor networks.
Step 1 – Apply for E-Residency
The first step is to become an Estonian e-resident.
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Application: Submit an online application on the Estonian Police and Border Guard Board website.
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Requirements: Valid passport copy, digital photo, CV, and motivation statement.
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Fee: Around €100.
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Processing Time: 4–8 weeks.
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Collection: Pick up your e-Residency card from an Estonian embassy or consulate.
The e-Residency card contains a digital ID and PIN codes that allow you to sign documents and access Estonian government portals securely.
Step 2 – Choose the Company Type
The most common business form for startups is the Private Limited Company (Osaühing – OÜ).
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Minimum Share Capital: €1 (recent reforms lowered the previous €2,500 minimum).
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Liability: Limited to the company’s assets.
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Ownership: 100% foreign ownership is allowed.
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Directors: At least one board member; can be non-resident.
Step 3 – Reserve a Business Name
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Search availability in the Estonian Business Register.
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The name must be unique and not infringe on trademarks.
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Suggested to add “OÜ” at the end (required for limited companies).
Step 4 – Register the Company Online
Use the Company Registration Portal (e-Business Register):
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Log in with your e-Residency card.
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Fill in company details (name, legal address, board members, share capital).
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Upload articles of association and other required documents.
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Pay the state fee (around €190).
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Sign documents digitally with your e-Residency card.
Registration usually takes 1–3 business days.
Step 5 – Obtain a Legal Address and Contact Person
Every Estonian company must have:
Several licensed business service providers offer these services for an annual fee (approx. €100–€300).
Step 6 – Open a Bank Account or Fintech Account
While traditional Estonian banks may require in-person visits, many startups use fintech providers:
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Wise Business
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Payoneer
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Revolut Business
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Paysera
These provide IBAN accounts for EU transactions and global payments.
Step 7 – Register for Taxes and VAT (if required)
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Corporate Tax: 0% on retained earnings; 20% on distributed profits.
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VAT Registration: Mandatory if annual turnover exceeds €40,000 in Estonia.
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Apply via the Estonian Tax and Customs Board.
Step 8 – Manage the Company Fully Online
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Use the X-Road digital infrastructure for all reporting and compliance.
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Submit annual reports online via the e-Business Register.
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Hire accountants familiar with e-Residency companies for VAT and payroll compliance.
Advantages for Startups
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Fast Incorporation: Entire process can be done in a few days.
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Low Costs: Affordable setup compared to many EU countries.
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Scalability: Easy to manage remote teams and international customers.
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Credibility: EU-based company improves trust with investors and clients.
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Flexibility: Manage everything remotely without physical presence.
Challenges to Consider
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Banking Restrictions: Some banks require personal visits.
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Substance Requirements: Certain EU clients may prefer local substance (office, employees).
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Tax Residency Rules: Your company may still be taxed in your home country depending on management and operations.
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Competition: Estonia is popular among global startups, meaning more competition for investors and talent.