Virtual Office FAQ

Accounting (9)

During the term of the contract, the accountant has the obligation to provide the accounting service in accordance with the applicable legislation, which also implies the obligation to keep the accounting records. After the expiry of the contract, the contracting authority shall have the right to require the accounting officer to keep the documents or to return them, thereby transferring the obligation to retain the documents to the contracting authority.

Specifically for the service we offer, the raw data is stored in web based accounting software from which all parties can check and download it.

 

 

 

Category: Accounting
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Client and accountant together.
The client is responsible for ensuring that the raw data provided is true and the accountant is responsible for ensuring that the raw data has been used lawfully according to law.
Category: Accounting
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It needs to be raised

Estonian Commercial Code states that if a private limited company has less than half of its share capital or less than the amount of share capital specified in § 136 of this Code or the other minimum amount of share capital provided by law, the shareholders shall decide:

1) reduction or increase of share capital, provided that the number of net assets would thereby form at least half of the share capital and at least the amount of share capital specified in § 136 of this Code or other minimum amount of share capital provided by law, or taking other measures as a result of which the amount of the net assets of the private limited company would be at least half of the share capital and at least the amount of share capital specified in § 136 of this Code or other minimum amount of share capital provided by law;

2) the dissolution, merger, division, or transformation of a private limited company, or

3) submission of a bankruptcy petition.

We can help with the terminal liquidation process.

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We accept the source documents in Estonian and English language.

There are certain restrictions for source documents, take a look at information about requirements.

Category: Accounting
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The following information needs to be written on purchase and sales invoices:

  • Title (e.g. “Invoice” or similar)
  • Invoice number
  • Date of issue
  • Description of goods or services purchased
  • Numerical data (amount, price of a unit, total sum)
  • Names of the seller and buyer
  • Addresses of the seller and buyer
  • Seller’s company registration number
  • Seller’s VAT number (in case the seller has it)

 

There are certain restrictions for source documents, take a look at information about requirements.

Category: Accounting
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In most cases, the financial year is the same as the calendar year in which case the deadline is the last day of June.

In special cases, a different period may be set for the financial year.

Submitting an annual report is mandatory for all the companies registered in Estonia, within 6 months from the end of the company’s financial year.

Categories: Accounting, Annual report
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In case the company has employees who are not Estonian tax residents and who live and work outside Estonia, salary payments to these foreign employees are not taxed in Estonia and we do not submit any tax declarations about these employees.

In such case, these foreign employees must declare their income from your Estonian company in the country in which they live and are tax residents.

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No, you don’t.

If the company has employees who are not tax residents of Estonia and work outside Estonia, the salary payments to these foreign employees are not taxed in Estonia, and we do not file tax returns for these employees.

Foreign employees must declare their income on behalf of an Estonian company in the country in which they are taxable.

Category: Accounting
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When conducting business in Estonia, you should comply with the local accounting and legal standards. A company needs to keep its books so that the creditors and business partners may rest assured about the financial position of the company and taxes can be calculated correctly.

There are three main accounting policies to abide by:

  • the Accounting Act of the Republic of Estonia
  • Estonia’s Good Accounting Practices
  • the guidelines issued by the Accounting Board of the Republic of Estonia

 

Category: Accounting
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Address service (6)

Besides, it’s mandatory to have an address for establishing a company in Estonia it also gives you a physical business address and office number for your business cards, website, and email and registering a new company. It increases your professionalism and credibility as a business and makes you more approachable to potential clients.

Also please keep in mind that it’s actually a real physical address not so called imaginary virtual address. We just call it like this

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In Tallinn city center, Juhkentali 8, Tallinn 10132

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It is included with your subscription order confirmation to be automatically downloadable.

Please check your email.

If it is not found, please let us know and we will resend it manually.

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Yes, a state fee must be paid if the state area changes.

A the moment it is 18 EUR.

The state fee must be paid to the Ministry of Finance.

Bank account and reference number information are submitted in the Estonian Business Register e-environment in the final phase of submitting the application.

Without payment of the state fee, the application will not be processed.

If there will be some obstacles, we can help with payment, free of charge, we have special service for that:

State fee for registry entry

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It’s real.

In the steady concrete building.

Estonian Business Registry (and payment solution providers, banks, etc) don’t accept “not real” or “virtual addresses”.

 

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We can help with official registration in the Estonian population registry if there is legal background for obtaining.

Categories: Address service, General
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Annual report (1)

In most cases, the financial year is the same as the calendar year in which case the deadline is the last day of June.

In special cases, a different period may be set for the financial year.

Submitting an annual report is mandatory for all the companies registered in Estonia, within 6 months from the end of the company’s financial year.

Categories: Accounting, Annual report
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Apostille (1)

No.

An unofficial document is not certified by a Notary. In Estonia, the list of shareholders is maintained by board members and has no official meaning. The information provided in the registry card is of official significance for the shareholders.

But we can translate it with the sworn translator.

Category: Apostille
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Background check (1)

e-Residency is a transnational digital identity available to anyone in the world interested in administering a location-independent business online. e-Residency enables to use secure and convenient digital services that facilitate credibility and trust online. Please be aware that e-Residency does not confer citizenship, tax residency, residence or right of entry to Estonia or to the European Union. It is not a visa or residence permit. The e-Resident digi-ID card is not a physical identification or a travel document, and does not display a photo. You’ll find laws and regulations concerning current application here: Identity Documents ActState Fees Act. You’ll find the terms and conditions for use of certificates of personal identification documents of the Republic of Estonia here.

    The state fee for the e-Resident’s digital ID card is 100 euros. Depending on the chosen pick-up location, additional fees apply:

  • if you choose an office in Estonia as the pick-up location there is no additional fee
  • if you choose a foreign representation of Estonia as the pick-up location you will have to pay an additional fee of 20 euros upon applying
  • if you choose Seoul, South Korea; Tokyo, Japan or San Francisco, USA as the pick-up location an additional service fee applies which is to be paid directly to the service provider upon collecting your document (more detailed information about the applicable fee of each location is displayed upon selecting a specific pick-up location)

Please be informed that the Police and Border Guard Board performs background checks on all applicants.

https://apply.gov.ee/

Categories: Background check, General
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Company formation (6)

A) An annual report must be submitted

To the registration department of a country court no later than within 6 months after the end of the financial year. The report can be submitted through the Company Registration Portal. If you do not submit the report in due time, the court maintaining the register may fine both the company and its management board members without advance warning.

The company’s financial year is always the calendar year, starting on the 1st of January and ending on the 31st of December.

B) The company’s business name, registry code and location

Must be stated in the company’s business documents and on its website. The annual report must also state those data and additionally the company’s e-mail address and website address as well as other telecommunications data.

C) Activities

Are presented in the annual report. Enclose up to 10 largest activities by sales revenue as annexes to the report. Activity cannot be freely described but instead must be indicated as the relevant wording in the Estonian Classification of Economic Activities, level 4. Insignificant activities are not required to be stated. The management report provides a more detailed description of the reporting year’s activities and the changes planned for the coming year. Please keep in mind that stating an activity in the Commercial Register does not automatically grant you the right to engage in it if a special law prescribes any additional requirements (for example the Trading Act requires that a place of sale be registered with the local government, the Building Act requires that a building contractor be registered, the Public Transport Act requires a public transport or taxi license, etc.).

D) Changing registry data (company address, management board members, etc.)

A petition for entry of change is filed with the county court maintaining the register. A petition for entry can be filed through Company Registration Portal or a notary. A state fee must be paid when filing a petition for entry (indicating the company’s registry code and the relevant reference code).

Notice of changes to data outside entries must be sent through Company Registration Portal or by post. Data outside entries can be changed without a state fee. A state fee is also not required for submitting a resolution of shareholders or the supervisory board to extend the duration of powers of a management board member entered into the register.

Documents (both on paper and digital) must be submitted as originals (incl. with original signatures) or as notarised copies. A notary may also prepare a digital copy of a document. Documents must be in Estonian or accompanied by a translation made by a sworn translator or certified by a notary. If failing to submit the required data, the company, as well as all its management board members can be fined repeatedly.

E) A person’s address

Is looked up from the Population Register by the county court maintaining the register. But if a company’s management board member, liquidator or the chair of the supervisory board does not have a place of residence registered in the Estonian Population Register, the data of that place of residence must be submitted and any changes in those data must be notified of immediately. Those data are also considered data outside entries so no state fee is required for them.

Every Estonian company must have an Estonian address.

F) The list of shareholders

Is kept by the private limited company’s management board.

If other shareholders have a pre-emptive purchase right, a shareholder selling its share must present the sales contract to the management board so that the management board can inform other shareholders. The notary certifying a sale or pledge of a share will also communicate the transaction to the county court maintaining the register. The management board may assign the list of shareholders to be maintained by the Estonian Central Register of Securities for a fee. In that case transactions with shares are conducted through a securities account opened in a bank. If a company had multiple shareholders and only a sole shareholder remains then the management board must send a notice to that effect to the county court maintaining the register.

Only private persons who have an Estonian personal ID code can register an Estonian company online. If you as a legal entity would like to register an Estonian company, please get in touch with us. We will help you with the registration process.

The company can be registered by one founder. If you have more than one founder, please get in touch with us. We will help you with the registration process.

To register an Estonian company, both the founder and the board member(s) must have an Estonian personal ID code. If the founder and the board member are different persons, both must digitally sign the company registration application. You will be able to download the application after filling out the registration form. Once you have signed the downloaded document, you must upload it to the portal for submission.

The management board of an Estonian company can be located outside of Estonia. In this case it is regulated by the law to provide the address of the board and appoint an authorized contact person.

G) Equity capital level

You must make sure that the company’s net assets (equity capital) do not decrease below one half of its share capital, and never below the lower limit of share capital set forth in the law. Otherwise the management board must summon the shareholders to decide an involvement of new funds, a merger, a reconstruction or dissolution of the company, etc. In the case of long-term insolvency, the management board must immediately present the court with a bankruptcy petition. Failure to react can bring about proprietary and criminal liability for the management board.

The share capital of the company must be at least 2500 euro. The maximum share capital permitted is 25 000 euro. You can register the company without having to deposit the share capital. You can do this later at the bank.

H) The Tax and Customs Board

And other national and local authorities utilise the Commercial Register’s data through a computer network and they are forbidden from requesting you to submit an excerpt of the Commercial Register (§ 541 (1¹) of the Commercial Code). You do not have to register separately as a person paying income tax, social tax and land tax. Still, you have to register as a person paying value added tax (VAT) if your company’s annual turnover exceeds the lower limit set forth in the law. You can register as a person paying value added tax through the website of the Tax and Customs Board.

Category: Company formation
Tags: Company, Estonia
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Allowed are:

  • Estonian, Latvian, Lithuanian and Belgium ID-Card/Estonian e-resident card/Estonian and Lithuanian Mobile-ID
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  1. Private limited company

There is no personal responsibility. Unless the shareholder or member of the management board does something criminally or directly to the detriment of the private limited company. For example, a company takes property. This needs to be done more cunningly.

2. General partnership

The shareholder is fully responsible. One shareholder is also appointed as a member of the management board, while the other shareholder remains anonymous. That must be kept in mind.

3. Non-profit organisation

It shouldn’t be here, but it is. But often the name does not correspond to the real thing. A business can be done that meets business objectives. There is no responsibility until something is done criminally.

 

Categories: Company formation, General
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Estonia has a very transparent tax system and it is easy to understand for the foreigners, because of the flat tax rates. Here are some of the main tax benefits of an Estonian company.

  1. The most important aspect about Estonian company’s taxes is that you only pay corporate income tax when you distribute dividends. If you don’t distribute dividends, then you don’t have to pay corporate income tax. So, you can use all the money that goes to your business bank account for reinvesting and growing the business and you won’t be taxed for that. In that sense, Estonia is the ideal place for growing your business compared to many other European countries where you have to pay taxes as soon as you earn income.
  2. In some cases, you can take out tax-free dividends, for example if you have a permanent establishment or when you receive dividends from a subsidiary. We will discuss permanent establishment separately in the upcoming sections.
  3. And lastly, a unique regulation about the Estonian tax system is that you, as a private person, don’t have to pay personal income tax additionally to the corporate income tax when the company pays you dividends. However, this applies only when you, as a private person, are a tax resident of Estonia. This is unique, because in most of the countries a private persons must pay personal income tax when they receive dividends. Nevertheless, this doesn’t mean that you, as a private person, don’t have to pay the personal income tax in your homeland.

It is very important to understand that there are different taxes for the company, and you as a private person. Therefore, you have to keep your personal and company’s money separate, as these are two independent persons: a natural person and a legal person.

This also means that it is not considered as double taxation when the company distributes dividends and pays corporate income tax, and when a private person receives dividends and pays personal income tax on that. We will discuss how double taxation works in the following section.

Tags: Company, Estonia, Tax
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If an association is established in the e-environment of the Estonian Business Register, no documents will be received on paper immediately. Each founder can download and print copies of the commercial register free of charge.

If there is a need to use these papers abroad, they must be legalized through the apostille. In Estonia, all organizations check the data through the e-environment in the commercial register.

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Single or multiple founders are possible.

All founders must log in to the Estonian Commercial Register with an e-residency ID card and provide their signature.

Category: Company formation
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Company liquitation (8)

Yes, this must be done in the so-called official notices, after the liquidation decision has been submitted to the Estonian Business Registry.

Adding it there or instructing to do it is included in the price of our service.

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It needs to be raised

Estonian Commercial Code states that if a private limited company has less than half of its share capital or less than the amount of share capital specified in § 136 of this Code or the other minimum amount of share capital provided by law, the shareholders shall decide:

1) reduction or increase of share capital, provided that the number of net assets would thereby form at least half of the share capital and at least the amount of share capital specified in § 136 of this Code or other minimum amount of share capital provided by law, or taking other measures as a result of which the amount of the net assets of the private limited company would be at least half of the share capital and at least the amount of share capital specified in § 136 of this Code or other minimum amount of share capital provided by law;

2) the dissolution, merger, division, or transformation of a private limited company, or

3) submission of a bankruptcy petition.

We can help with the terminal liquidation process.

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Estonian notaries have launched an e-notary service so that company owners can visit an Estonian Embassy abroad to transfer shares, instead of at a notary office in Estonia.

You can read more about this on the e-Residency blog here.

You can choose a notary by logging in with your digital ID at notar.ee.

Don’t worry too much about which one to choose, as long as they can conduct the transaction in English and are part of the e-notary scheme. Notary fees are regulated by law and they all provide the same good quality of service.

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The liquidators shall immediately publish a notice of the liquidation proceedings of the private limited company in the official publication Ametlikud Teadaanded.

The notice of liquidation must state that the creditors if they exist, must submit their claims within four months of the publication of the notice.

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The story is that we are offering a faster way to get rid of your business, but that speed will start to run from the moment you reach the first person to be considered a notary. From there, our 24-hour time will run.

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Fastest in 6 months.

After the completion of the liquidation, but not earlier than six months after the entry of the dissolution of the private limited company in the commercial register and publication of the liquidation notice and three months after notification of the final balance sheet and asset distribution plan to the shareholders and provided.

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A private limited company can be dissolved by a resolution of the shareholders, a court decision, bankruptcy or other conditions specially specified for that purpose in the articles of association.

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Yes, it’s possible.

A private limited company or public limited company may, as a company being acquired, merge with the assets of a natural person (acquiring natural person) who is the sole shareholder of the company.

The merger is permitted also in case the shares are in the joint ownership of the spouses. The merger of a private limited company or public limited company with the assets of the company’s shareholder who is a natural person is permitted also in case in addition to this shareholder the shares of a private limited company or public limited company being acquired are held exclusively by the company itself.

The assets of a company being acquired, including its obligations, shall transfer to the acquiring company upon merger.

The merger will take place without liquidation proceedings. So it’s faster than conventional liquidation.

The merger process between a natural person and her/his company takes far less than the conventional liquidation – about 2-4 months.

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Drop Shipping (3)

Yes, it’s possible if you have just one shipment.

Category: Drop Shipping
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A single shipment can be forwarded at the price of a standard product, ie 10 EUR per shipment.

However, if there are several shipments, you must also purchase our Package ONE or address service as a one-time purchase.

 

Category: Drop Shipping
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Yes, they are added.

The whole cost chain is as follows, 1O EUR per shipment, plus postage cost according to where it needs to be sent and what is the size and weight of the shipment.

Category: Drop Shipping
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EORI number (4)

As of 1 July 2009, the EORI number must be assigned to persons whose activities are related to customs activities, ie activities related to the Customs Code and its implementing provisions.

Category: EORI number
Tags: EORI, Estonia, EU
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Allowed are:

  • Estonian, Latvian, Lithuanian and Belgium ID-Card/Estonian e-resident card/Estonian and Lithuanian Mobile-ID
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For this, you have to give us the right of representation in the Estonian Tax and Customs Board.

That is, either by authorizing us directly with the ID card through the Estonian Tax and Customs Board e-environment or giving us the Power of Attorney.

Take a look tutorial video:

https://www.youtube.com/watch?v=uKJ3zgS5oTc

.. and don’t forget to subscribe to our Youtube channel.

 

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An authorization is a collection of rights within the limits of which a representative may act on behalf of the principal. It is essential for the Estonian Tax and Customs Board that the content of authorization would be understandable and the person granting the authorization and authorized person would be identifiable. An authorization may be granted orally or in written form (by a power of attorney).

The Estonian Tax and Customs Board shall accept:

  • an oral authorization – is valid on procedural acts only together with a party to the proceedings;
  • an unattested written authorization, unless the legislation states the different obligatory form of authorization;
  • an authorization attested by a notary;
  • an authorization signed digitally;
  • an authorization granted by the legal representative of a legal person personally via the e-MTA (the menu item ‘Communication’ → ‘Correspondence’);
  • an authorization confirmed by a sworn advocate.
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Formation of a nonprofit association (2)

If an association is established in the e-environment of the Estonian Business Register, no documents will be received on paper immediately. Each founder can download and print copies of the commercial register free of charge.

If there is a need to use these papers abroad, they must be legalized through the apostille. In Estonia, all organizations check the data through the e-environment in the commercial register.

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The foundation cannot be established electronically on the Estonian Business Registry.

Establishing papers must be verified with Public Notary or we must have Power of Attorney.

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General (30)

Estonia is NO. 1 most entrepreneurial country in Europe (World Economic Forum) with the world’s most digitally advanced society

  • The taxation system of Estonia is favourable because the refinanced and retained profit is not subject to the corporate income tax. All taxation can be done remotely. So do company establishment, accounting etc.
  • Secure online access to company data (legal facts, accounting, banking, taxes, etc.), allowing you to operate the company from anywhere in the world without the need for a regular physical presence in Estonia.
  • Member of the European Union
  • Member of the European Monetary Union (currency: Euro)
  • English is widely spoken
  • Transparent and attractive tax system
  • Rapid company registration and business set up
  • Easy business management via innovative e-solutions
  • Pro-business environment
Category: General
Tag: Estonia
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The definition of the beneficial owner is defined in § 9 of the Money Act, according to which a beneficial owner is a natural person who ultimately owns or controls a legal person through the direct or indirect holding of a sufficient number of shares, voting rights, or ownership, including participation in bearer shares or otherwise.

The real beneficiary can be through direct or indirect control. Direct control is when a natural person has a shareholding of more than 25% in a company. Indirect control is when a company that is controlled by a natural person or several companies that are controlled by the same natural person owns more than 25% of the company.

In principle, a situation is also possible where no natural person has a shareholding of more than 25% in the company. For example, it could be a private limited company with 4 shareholders with equal shares, all of whom have a 25% shareholding and the corresponding voting rights. Thus, within the meaning of the Money Act, none of them exercises control over the private limited company and such a legal person has no real beneficiary.

The Manual for adding beneficial owners:

 

Category: General
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A natural person is a resident if one of the following conditions is met:

  • place of residence is in Estonia
  • stays in Estonia for at least 183 days over the course of a period of 12 consecutive calendar months. A person shall be deemed to be a resident as of the date of his or her arrival in Estonia.
  • Estonian diplomats who are in foreign service are also Estonian residents.

Taxation requirements also apply according to residency status.

Corporate tax status is determined by where the turnover is generated, where the profits are distributed, and where the employee is resident in the country.

 

Categories: General, Taxis in Estonia
Tags: Estonia, Tax
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Estonia invites anyone in the world to apply for e-Residency, as long as:

  • You have a reasonable interest in using e-services in Estonia
  • You are not an Estonian citizen or a foreigner residing in Estonia on a residence permit or with the right of residence (you already have a government-issued digital ID)

E-Residency is particularly well-suited for many freelancers, consultants, digital nomads, solo entrepreneurs and other digital entrepreneurs interested in establishing a digital services company they can manage from anywhere.

Category: General
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As a general rule, the bank asks for a certified copy of the shareholder’s and director’s passport (beneficial owner), as well as recent proof of residence which, must be less than three months old. However, the full scope of documents depends on the bank, and on the particulars of each case. If the client goes to the bank in person to open the account, a certified copy of the passport is not required.
We will send you the additional documents necessary for opening the account by email, as an attachment, for you to sign and return to us preferably by special courier ( DHL, FedEx or Chronopost), along with the other documents mentioned above.

Disclaimer:

  • Each bank account application is subject to the bank’s mandatory due diligence requirements and duties under national and international (FATF) standards, in particular, to prevent money laundering, and nothing on this webpage shall be construed as an offer to waive such requirements and duties.
  • Banks are listed as examples only. You will need to confirm your choice of a bank after the registration of your company. You have no obligation to select a listed bank and may propose another bank of your choice. SFM is not proposing bank services. An introduction service includes the preparation of the application form and the submission of the application file. Any application is subject to the acceptance of the client by the bank.
Categories: General, Package THREE
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  • IT IS NOT an actual residency. It does not give you any rights to stay in Estonia, the EU or the Schengen zone whatsoever. Nor any other social rights in Estonia or anywhere else.
  • IT IS NOT a way to avoid paying tax in your actual country of residence.
  • IT IS NOT a citizenship, and you will never receive any consular support from the Estonian government for holding an e-residency.
  • IT IS NOT a travel document. It is not a picture ID. It can not be used as a form for identification in the “real world.”
Category: General
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Mobile-ID allows people to use a mobile phone as a form of a secure digital ID. Like the ID-card, it can be used to access secure e-services and digitally sign documents but has the added advantage of not requiring a card reader.

The system is based on a special mobile SIM card, which the customer must request from the mobile phone operator. Private keys are stored on the mobile SIM card along with a small application delivering the authentication and signature functions.

 

Category: General
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E-Residency enables digital entrepreneurs to start and manage an EU-based company online:

  • Estonia is the first country to offer e-Residency, a government-issued digital identity, and status that provides access to Estonia’s transparent digital business environment
  • E-Residency allows digital entrepreneurs to manage the business from anywhere, entirely online

Note, an e-Residency digital ID card provides access to e-services, but it is not a valid form of physical identification and cannot be used as a travel document. e-Residency does not confer citizenship, tax residency, physical residency or right of entry to Estonia or the European Union.

There are no annual or maintenance fees for the e-Residency digital ID card.

The e-Residency digital ID card is valid for (5) years. The state fee for renewal or replacement is the same.

Business-Guide-for-e-Residents
Category: General
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ID-card and Digi-ID are the easiest, most convenient and most secure methods of using internet banking and other e-services in Estonia.

Digital identity card or Digi-ID is an ID-card like a smart card, that you can use for authentication of the holder and giving digital signatures in an electronic environment. Also encryption functionality is supported.

You can apply for Digi-ID if you are:

  • a citizen of the Republic of Estonia who has a valid ID-card, or if you apply for Digi-ID along with the ID-card
  • an alien with a valid residence card/ID-card, or if you apply for Digi-ID along with the e-residency card

You need the following to use the ID-card and Digi-ID electronic services:

  • ID-card software – download the software at the address installer.id.ee
  • PINs – issued with an ID-card. In the event that you have lost the codes, you will be able to receive new codes from a service office of the Police and Border Guard Board or from Estonian foreign representations.
  • valid certificates – More details on whether your certificates are valid or need updating, as well as how to update the certificates, can be found here.
  • a computer with an internet connection
  • a card reader – ask for one from a computer store or your local bank branch

 

Category: General
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  1. Private limited company

There is no personal responsibility. Unless the shareholder or member of the management board does something criminally or directly to the detriment of the private limited company. For example, a company takes property. This needs to be done more cunningly.

2. General partnership

The shareholder is fully responsible. One shareholder is also appointed as a member of the management board, while the other shareholder remains anonymous. That must be kept in mind.

3. Non-profit organisation

It shouldn’t be here, but it is. But often the name does not correspond to the real thing. A business can be done that meets business objectives. There is no responsibility until something is done criminally.

 

Categories: Company formation, General
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Estonian notaries have launched an e-notary service so that company owners can visit an Estonian Embassy abroad to transfer shares, instead of at a notary office in Estonia.

You can read more about this on the e-Residency blog here.

You can choose a notary by logging in with your digital ID at notar.ee.

Don’t worry too much about which one to choose, as long as they can conduct the transaction in English and are part of the e-notary scheme. Notary fees are regulated by law and they all provide the same good quality of service.

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A Public Notary in Estonia is an intermediary between a physical or juridical person and the Estonian Business Registry.

You have the right to demand that a notary who has certified or confirmed the application for representation represent him or her in the administration of the court registry department, including forwarding documents (see also § 30 (2) – (21) and § 33 (1) of the Notaries Act).

If you want the notary to certify the substance of the application, the certification fee also includes legal consultation, preparation of a draft application, and information on how much you have to pay the state fee.

In addition, at the request of participants, a notary has the right and obligation to prepare and submit to the population register a notice of change of residence data and an application for an activity license, license, and registration specified in Annex 1 to the Notarial Regulations (see § 37 of the Notarial Regulations).

Category: General
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An authorization is a collection of rights within the limits of which a representative may act on behalf of the principal. It is essential for the Estonian Tax and Customs Board that the content of authorization would be understandable and the person granting the authorization and authorized person would be identifiable. An authorization may be granted orally or in written form (by a power of attorney).

The Estonian Tax and Customs Board shall accept:

  • an oral authorization – is valid on procedural acts only together with a party to the proceedings;
  • an unattested written authorization, unless the legislation states the different obligatory form of authorization;
  • an authorization attested by a notary;
  • an authorization signed digitally;
  • an authorization granted by the legal representative of a legal person personally via the e-MTA (the menu item ‘Communication’ → ‘Correspondence’);
  • an authorization confirmed by a sworn advocate.
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Remote authentication enables the conduct of notarial acts via a video bridge created between the notary and the customer. Such authentication is equivalent to authentication at a notary’s office.

Remote authentication is an opportunity, not an obligation. It is up to the notary to decide, whether a specific transaction can be carried out by using remote authentication.

Subject to agreement with a notary, transactions using remote authentication can be carried out either at a place suited for the customer (e.g. at home) or at an Estonian embassy.

Outside embassies remote authentication can be used to perform all notarial acts, except certification of contraction of marriage and divorce.

At Estonian embassies, remote authentication can be used for carrying out transactions with shares of a private limited company, authenticating powers of attorney, submitting applications for marriage and divorce, and applications related to succession. Deletion and transfer of real rights and commercial pledges are also possible. Acts using remote authentication can be conducted in five Estonian embassies – Helsinki, Stockholm, Brussels, Riga and London. 


In order to conduct an act by using remote authentication and be given the relevant advice, one should first contact a notary’s office. The contact data of all notaries can be found at www.notar.ee/et/notarid/nimekiri. One can also carry out the required act via the self-service portal of the Chamber of Notaries at iseteenindus.notar.ee (EE). A Republic of Estonia ID card, digital ID, mobile ID or an e-Resident’s digital ID can be used to log in to the portal and to sign documents to be authenticated. SmartID and European Union member state’s eID card can also be used to log in to the portal, but they can not be used to sign any documents.

If the intention is to carry out the act by using remote authentication in an Estonian embassy, one of the five embassies can be selected in the self-service portal, by also indicating the desired dates. Based on the data submitted in the application the self-service portal proposes the available times that suit both the notary and the embassy. The times are proposed in accordance with the time zone in which the embassy is located.

Additional info

Category: General
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The registration of the activities of an unlicensed small fund manager is regulated by § 453 of the Investment Funds Act (IFS). Accordingly, in order to register the activities, the applicant must submit a written application to the Financial Supervision Authority and the following information and documents specified in IFS:

  • the contact details and articles of association or another equivalent document of the small fund manager
  • the number of funds managed and their names or business names
  • the dates on which the funds managed are set up or set up and the law under which they are set up or set up
  • information on the investment policy of the funds, including the fund’s investments and marketable instruments, trading venues, the fund’s main risks, and the composition and total value of assets under management

In addition to the above, the following must also be submitted:

  • the partnership agreement of the fund to be established and, if necessary, also the management agreement
  • rules of procedure and internal control rules which comply with the requirements provided for in § 14 of the Money Laundering and Terrorist Financing Prevention Act (RahaPTS)
  • Money risk document provided for in § 10 of the PTS
  • rules of procedure and internal control rules which comply with the conditions of § 23 of the International Sanctions Act
  • an organizational solution for the prevention of money laundering and terrorist financing, based on the principle of three internationally recognized lines of defense (including the number of employees in each line of defense)
  • legal self-analysis, taking into account the guidelines on the basic concepts of the Directive on Alternative Investment Fund Managers ESMA / 2013/611 (available on the website of the Financial Supervision Authority here: http://www.fi.ee/failid/Soovituslik_juhend_ESMA_suunise_ylevotmine_2013_611.pdf), which would indicate the . In the elements of the self-assessment, it is appropriate to refer to the partnership agreement of the proposed fund or other relevant documents from which the relevant rights or obligations of the fund, the fund manager and investors arise
  • A document certifying payment of the processing fee on the basis of subsection 457 (4) of the Financial Supervision Authority Act (payment order)
Category: General
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If you want to live and work in Estonia, you must submit your permanent local address to the Population Register of Estonia.

You will not have access to Estonian health insurance, social support and the right to use many other public services without having your data in the register. So, when moving, always update your address in the register as well.

Things to bring when registering your place of residence:

  • residence notice (filled before or on the spot). The document is only available in Estonian, but have a look at a translated example.
  • Your personal ID or a photocopy of the ID if the documents are sent by mail.
  • A copy of a document proving your residence and the right to use these premises (your tenancy agreement, for example). If the property you register to live at belongs to many owners, you must have everyone’s consent.

If you own an Estonian ID card, you can register your place of residence online via the citizen portal eesti.ee.

Contact information of the local government units.

Read more about registering your place of residence on the website of the Estonian Ministry of the Interior.

Category: General
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You can find answers to all the most frequently asked questions about the electronic use of ID-card and mobile-ID on the id.ee webpage: feel free to use our search function! However, if your problem remains unsolved, please contact the ID Help Centre through the form here. The more precisely you describe your problem and the emergence of the situation, the more personalized assistance we can provide. All answers with easy steps and instructions that could help to resolve your problem will be sent to you in writing!

If our FAQ and overall manuals what you have been studying don’t give the solution for your problem, please contact directly the official government team.

 

 

Category: General
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Smart-ID personal identification can be used today in Estonia, Latvia, and Lithuania. If you are an alien living in Estonia or you want to help an alien create an account, the options are:

Residents of Estonia, Latvia, and Lithuania (incl. People staying here on the basis of a permanent residence permit) have a residence permit card. It allows you to create a Smart-ID account exactly as you would with an ID card: just follow the on-screen instructions. Your personal identification code is written on the residence card.

If you are a non-resident, ie a person who does not have a local personal identification code, it is not possible to create a Smart-ID account in Estonia and Latvia. However, it is possible to register a Smart-ID Basic account with limited rights in Lithuania by visiting the bank branch of Medicines Bankas, don’t forget to bring your identity documents!

Category: General
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What are they and why do I need them?

Certificate means the electronic evidence that ties a person (e.g. with their ID-card, Mobile-ID, digi-ID) to the right to perform legally binding acts (making bank transfers, signing contracts, etc.). In other words, the certificates are necessary to give us the reassurance that an activity or transaction was performed or a signature was given, etc. by the right person.

The person whose ID-card is in the reader is identified immediately when you try to initiate an activity requiring identification. For example, you log in to your bank account or launch the ID-software on your computer. However, having an ID-card is not enough to gain access: every activity that may have legal consequences for you is tied to certificates for security purposes.

Category: General
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Your e-Residency digital ID card is an electronic personal identification used to securely identify yourself over the internet. Just like showing identification when completing a credit card transaction at a store, you show your digital ID for verification over the internet so companies are certain you are you.

ID card is the national technical support in Estonia. If starting to use the card online seems difficult or daunting, they are there to assist you through the process.

On their website, you can find how-to videos, support articles, step-by-step solution finders, and the contacts of the support team.

For an example of the videos, check out how to create a digitally signed document on your computer!

Category: General
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If the intended activity of the company is not related to Estonia, you will not be able to open a bank account in Estonia.

This requires, for example, cooperation partners in Estonia, the partnership must also be verifiable (contracts, sales invoices, letters of confirmation), etc.

Also, to open an account with an Estonian bank, a board member of the company shall be present in the opening process.


But wait a moment, why you need a bank account in Estonia? You can open a bank account in your selected country, in your home country, or use our partners.

Just establish a company in Estonia, get your papers legislated, and open a bank account where you want and can do it.

 

Category: General
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  • Review the eligibility requirements.
  • Fill in the application form online. Print the form and sign it after completion. The state fee is 80€ for a Type C (short stay) visa and 100€ Type D (long stay) visa.
  • Make an appointment at your nearest Estonian Embassy or Consulate to submit your application. Make sure you bring copies of any required supporting documents.
  • Applications are typically reviewed not sooner than 15 days

Application form for a visa can be pre-filled online. If the visa application is submitted to other Member State representing Estonia in issuing short-stay visas, kindly fill in the Schengen visa application form of the respective Member State.

Category: General
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Below is a list of the most commonly used Estonian government e-services.

State Portal Log in to see and manage your personal information
Service Providers Some service providers have integrated e-Residency digital ID log in on their websites
Company Registration Portal Register your company online
e-Business Register Manage your business information
e-Financials Web-based public accounting software
e-Tax/e-Customs Submit relevant documentation to the Estonian Tax and Customs Board
e-apostille Use e-apostille when you need your company formation documents apostilled

 

Category: General
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An e-resident is a non-resident according to Estonian tax legislation. Only income derived in Estonia is taxed in Estonia.

If there is no activity or income derived from Estonia, taxes should be paid in the country where the service is provided or activity is done or income is derived from, the pure e-residency alone does not influence the foreign or Estonian taxation.

An Estonian company established by an e-resident is an Estonian tax resident. The Estonian e-residency does not automatically exempt from taxation elsewhere.

Tax residency is the place where you actually have to pay the taxes. For example, if you are an Estonian citizen, but have lived more than 183 days per year in Finland, then you become a tax resident in Finland and have to pay the taxes there.

In general, a company’s tax residency is in the country where the company is established. So, if the company is established in Estonia, then by law the tax residency is in Estonia. There are exceptions to this rule that will change the tax residency of your company, which we will discuss later in this article.

When talking about tax residency or even e-Residency, it is important to emphasize that neither is an actual residency. So, if you receive your e-Residency card, then this doesn’t make you a resident nor a tax resident of Estonia – it is a common false perception. E-Residency is not related to visa or a resident permit and doesn’t enable you to travel to Estonia. E-Residency card is a digital identity that allows you to run a business in Estonia from the distance and fully online.

NB!

  • e-Residency will not change your personal tax residency
  • A company registered in Estonia is automatically a tax resident in Estonia
  • Your personal residency may trigger tax residency for your company in your place of residence as well
Categories: General, Taxis in Estonia
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To explain tax residency and citizenship, we first need to consider that there are two separate parties involved: a private and a legal person. This means that your company is a legal person, and you alone are the private person.

Citizenship only applies to a private person and is determined by your passport. The tax residency on the other hand is not the same as citizenship and is determined by tax laws. The tax residency status can be in the same country as your citizenship, but it also might be different or change in time.

Categories: General, Taxis in Estonia
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In the self-service you can:

  • Choose a notary and make an appointment
  • Initiate transactions and enter transaction details
  • Examine contracts before the transaction
  • View all your notarial transactions and invoices

You can use e-Notary in:

  • all over Estonia and in the following embassies:
  • Helsinki
  • Stockholm
  • Brussels
  • London
  • Riga

In the self-service you can:

  • Start and sell of companies shares
  • Certification of copies, printouts, signatures
  • Authentication of power of attorney
  • Apostille
  • etc.

What is the address of the e-notary?

https://iseteenindus.notar.ee

Category: General
Tags: e-Notary, Estonia
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To provide contact person services there is a need for a licence, we have that. Virtual Office in Estonia has a licence (licence no FIU000051) to be an authorized contact person in Estonia. The licence is provided by Estonian Ministry of Economic Affairs.

Category: General
Tag: Estonia
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We can help with official registration in the Estonian population registry if there is legal background for obtaining.

Categories: Address service, General
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e-Residency is a transnational digital identity available to anyone in the world interested in administering a location-independent business online. e-Residency enables to use secure and convenient digital services that facilitate credibility and trust online. Please be aware that e-Residency does not confer citizenship, tax residency, residence or right of entry to Estonia or to the European Union. It is not a visa or residence permit. The e-Resident digi-ID card is not a physical identification or a travel document, and does not display a photo. You’ll find laws and regulations concerning current application here: Identity Documents ActState Fees Act. You’ll find the terms and conditions for use of certificates of personal identification documents of the Republic of Estonia here.

    The state fee for the e-Resident’s digital ID card is 100 euros. Depending on the chosen pick-up location, additional fees apply:

  • if you choose an office in Estonia as the pick-up location there is no additional fee
  • if you choose a foreign representation of Estonia as the pick-up location you will have to pay an additional fee of 20 euros upon applying
  • if you choose Seoul, South Korea; Tokyo, Japan or San Francisco, USA as the pick-up location an additional service fee applies which is to be paid directly to the service provider upon collecting your document (more detailed information about the applicable fee of each location is displayed upon selecting a specific pick-up location)

Please be informed that the Police and Border Guard Board performs background checks on all applicants.

https://apply.gov.ee/

Categories: Background check, General
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Package ONE (6)

Besides, it’s mandatory to have an address for establishing a company in Estonia it also gives you a physical business address and office number for your business cards, website, and email and registering a new company. It increases your professionalism and credibility as a business and makes you more approachable to potential clients.

Also please keep in mind that it’s actually a real physical address not so called imaginary virtual address. We just call it like this

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In Tallinn city center, Juhkentali 8, Tallinn 10132

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It is included with your subscription order confirmation to be automatically downloadable.

Please check your email.

If it is not found, please let us know and we will resend it manually.

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2

Yes, a state fee must be paid if the state area changes.

A the moment it is 18 EUR.

The state fee must be paid to the Ministry of Finance.

Bank account and reference number information are submitted in the Estonian Business Register e-environment in the final phase of submitting the application.

Without payment of the state fee, the application will not be processed.

If there will be some obstacles, we can help with payment, free of charge, we have special service for that:

State fee for registry entry

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If the company already exists, the decision of the shareholder or shareholders to change the address and/or contact person must also be included in the change statement to the business register additionally.

If the address given in the articles of association changes within the administrative unit, the articles of association must also be amended.

You can compile them yourself, use the automatic forms in the business register or order them from us. To do this, you need to order a document service.

 

Categories: Package ONE, Package TWO
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It’s real.

In the steady concrete building.

Estonian Business Registry (and payment solution providers, banks, etc) don’t accept “not real” or “virtual addresses”.

 

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Package THREE (4)

As a general rule, the bank asks for a certified copy of the shareholder’s and director’s passport (beneficial owner), as well as recent proof of residence which, must be less than three months old. However, the full scope of documents depends on the bank, and on the particulars of each case. If the client goes to the bank in person to open the account, a certified copy of the passport is not required.
We will send you the additional documents necessary for opening the account by email, as an attachment, for you to sign and return to us preferably by special courier ( DHL, FedEx or Chronopost), along with the other documents mentioned above.

Disclaimer:

  • Each bank account application is subject to the bank’s mandatory due diligence requirements and duties under national and international (FATF) standards, in particular, to prevent money laundering, and nothing on this webpage shall be construed as an offer to waive such requirements and duties.
  • Banks are listed as examples only. You will need to confirm your choice of a bank after the registration of your company. You have no obligation to select a listed bank and may propose another bank of your choice. SFM is not proposing bank services. An introduction service includes the preparation of the application form and the submission of the application file. Any application is subject to the acceptance of the client by the bank.
Categories: General, Package THREE
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It is included with your subscription order confirmation to be automatically downloadable.

Please check your email.

If it is not found, please let us know and we will resend it manually.

Did you find this FAQ helpful?
4
2

It’s real.

In the steady concrete building.

Estonian Business Registry (and payment solution providers, banks, etc) don’t accept “not real” or “virtual addresses”.

 

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If an association is established in the e-environment of the Estonian Business Register, no documents will be received on paper immediately. Each founder can download and print copies of the commercial register free of charge.

If there is a need to use these papers abroad, they must be legalized through the apostille. In Estonia, all organizations check the data through the e-environment in the commercial register.

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Package TWO (5)

Besides, it’s mandatory to have an address for establishing a company in Estonia it also gives you a physical business address and office number for your business cards, website, and email and registering a new company. It increases your professionalism and credibility as a business and makes you more approachable to potential clients.

Also please keep in mind that it’s actually a real physical address not so called imaginary virtual address. We just call it like this

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4
1

It is included with your subscription order confirmation to be automatically downloadable.

Please check your email.

If it is not found, please let us know and we will resend it manually.

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4
2

Yes, a state fee must be paid if the state area changes.

A the moment it is 18 EUR.

The state fee must be paid to the Ministry of Finance.

Bank account and reference number information are submitted in the Estonian Business Register e-environment in the final phase of submitting the application.

Without payment of the state fee, the application will not be processed.

If there will be some obstacles, we can help with payment, free of charge, we have special service for that:

State fee for registry entry

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If the company already exists, the decision of the shareholder or shareholders to change the address and/or contact person must also be included in the change statement to the business register additionally.

If the address given in the articles of association changes within the administrative unit, the articles of association must also be amended.

You can compile them yourself, use the automatic forms in the business register or order them from us. To do this, you need to order a document service.

 

Categories: Package ONE, Package TWO
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It’s real.

In the steady concrete building.

Estonian Business Registry (and payment solution providers, banks, etc) don’t accept “not real” or “virtual addresses”.

 

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Taxis in Estonia (16)

A natural person is a resident if one of the following conditions is met:

  • place of residence is in Estonia
  • stays in Estonia for at least 183 days over the course of a period of 12 consecutive calendar months. A person shall be deemed to be a resident as of the date of his or her arrival in Estonia.
  • Estonian diplomats who are in foreign service are also Estonian residents.

Taxation requirements also apply according to residency status.

Corporate tax status is determined by where the turnover is generated, where the profits are distributed, and where the employee is resident in the country.

 

Categories: General, Taxis in Estonia
Tags: Estonia, Tax
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MOSS stands for Mini One Stop Shop and is part of the VAT, but it only concerns digital goods or services. For example, services covered under the MOSS scheme include website hosting, a supply of software, access to databases, downloading apps or music, online gaming and distance teaching.

When selling digital goods and services, the regular rule is that the place of turnover is where your customer is located. So normally if you sell physical goods to a certain country, then at some point you have to get a VAT number in that country. But MOSS simplifies the process for digital goods and services which means you don’t have to get a VAT number in many different countries. For example, if an Estonian company sells digital services to different private persons all over the EU, then the company’s invoices will have an Estonian VAT number, but a client’s home country VAT rate. Meaning that your company will pay all the other countries’ VAT to the Estonian tax office who will then spread the VAT itself between those countries where the customers purchased your digital goods or services. Therefore, MOSS will save you a lot of time and money in the end.

MOSS scheme can be used only if the company is VAT liable. In Estonia, you have to declare MOSS in a special quarterly declaration. So, it is not part of the regular monthly VAT declaration, but additional reporting. You still have to submit monthly VAT declarations, even if most of the goods or services you sell, are covered with MOSS.

It is very important that you fully understand what selling digital goods and services means when it comes to MOSS. You will have to set up a very good system to gather all the information about your clients, the countries where they’re from, and the VAT rates of the countries where your customers completed the purchases, as this will greatly help from the tax reporting point of view.

Category: Taxis in Estonia
Tags: Estonia, MOSS, Tax
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As the name says, double taxation stands for paying the same taxes in different countries. Double taxation can be avoided, if the country where your company is established, and where you as a private person live, have signed a double tax treaty agreement. See the list of the countries that have double tax treaty agreements with Estonia.

If the countries have not signed the treaty, then the double taxation can’t be avoided. For example, Estonia doesn’t have a double tax treaty with Russia, which means that the company may need to pay corporate income tax in Estonia as well as in Russia.

In the previous section, we already mentioned that income taxes for a natural person and a company are two separate things. If a company pays out dividends, then this is taxed with the corporate income tax. However, in most of the countries, private persons have to pay personal income tax from the received dividends. This is not considered as double taxation, because these are two separate taxes.

Category: Taxis in Estonia
Tags: Estonia, Tax
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The standard rate of VAT is 20%, the reduced rate is 9% and 0% in some cases.

The taxable period is one calendar month, and VAT returns must be submitted to the tax authority by the 20th day of the month following the taxable period.

Usually, Tax and Customs Board will register with the VAT for those companies that engage in economic activities or prove their commencement (§ 20 (4) of the Value Added Tax Act).

As a result, the registration of non-operating ready-made companies is usually not possible for the sale of companies by sellers of the companies.

It is possible to buy formerly operating companies, including VAT registered companies. In this case, the registration of the company as a VAT taxpayer will be retained.

Category: Taxis in Estonia
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Estonia has a very transparent tax system and it is easy to understand for the foreigners, because of the flat tax rates. Here are some of the main tax benefits of an Estonian company.

  1. The most important aspect about Estonian company’s taxes is that you only pay corporate income tax when you distribute dividends. If you don’t distribute dividends, then you don’t have to pay corporate income tax. So, you can use all the money that goes to your business bank account for reinvesting and growing the business and you won’t be taxed for that. In that sense, Estonia is the ideal place for growing your business compared to many other European countries where you have to pay taxes as soon as you earn income.
  2. In some cases, you can take out tax-free dividends, for example if you have a permanent establishment or when you receive dividends from a subsidiary. We will discuss permanent establishment separately in the upcoming sections.
  3. And lastly, a unique regulation about the Estonian tax system is that you, as a private person, don’t have to pay personal income tax additionally to the corporate income tax when the company pays you dividends. However, this applies only when you, as a private person, are a tax resident of Estonia. This is unique, because in most of the countries a private persons must pay personal income tax when they receive dividends. Nevertheless, this doesn’t mean that you, as a private person, don’t have to pay the personal income tax in your homeland.

It is very important to understand that there are different taxes for the company, and you as a private person. Therefore, you have to keep your personal and company’s money separate, as these are two independent persons: a natural person and a legal person.

This also means that it is not considered as double taxation when the company distributes dividends and pays corporate income tax, and when a private person receives dividends and pays personal income tax on that. We will discuss how double taxation works in the following section.

Tags: Company, Estonia, Tax
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The reverse charge is widely imposed on taxable transaction, which means that whenever the place of supply is Estonia and the receiver of the goods or services is a taxable person with an Estonian VAT number, no obligation for registration arises for the non-resident supplier. If the purchaser is not a VAT liable in Estonia, registration obligation arises for the provider of goods or services. The registration obligation shall arise for the foreign taxable person as of the date on which the taxable supply is created. However, if zero-rated supplies are made in a free zone, free warehouse or in a customs warehouse, the person making the supplies is exempted from registration.

If a taxable person of another Member State is engaged in distance selling to a person of Estonia (excluding distance selling of excise goods) and the taxable value of the supply of the distance selling exceeds 35 000 euros as calculated from the beginning of a calendar year, the registration obligation shall arise for the person as of the date on which the supply reaches the specified amount.

If a taxable person of another Member State is engaged in the distance selling of excise goods to a natural person of Estonia for personal use, the registration obligation shall arise for the taxable person as of the date on which the supply of the distance selling of excise goods is created.

In order to register as a VAT liable, an application for registration is submitted to the Estonian Tax and Customs Board.

Upon registration, it is required to attend the procedure in person, i.e. the person seeking for registration cannot e-mail or send the registration form by post or fax. However, it is possible to use either an authorised person or a tax representative for the procedure. The tax authority shall register a person as a taxable person by entering the data concerning the person in the register of taxable persons as on the date on which the registration obligation arose, within five working days as of the receipt of the application. Upon registration, we shall issue one VAT identification number for all purposes and for all taxable persons. The structure of the number is always EE and 9 digits (e.g. EE012345678).

Tags: Estonia, VAT
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Residents pay tax on their worldwide income. Taxable income includes, in particular, income from employment (salaries, wages, bonuses and other remuneration); business income; interest, royalties, rental income; capital gains; pensions and scholarships (except scholarships financed from the state budget or paid on the basis of law). Taxable income does not include dividends paid by Estonian or foreign companies when the underlying profits have already been taxed.

The personal income tax is withheld from the employees’ gross salary every month and paid by the employer.

Non-residents pay personal income tax only on their income received from Estonian sources. Taxable income in Estonia includes:

  • income from work under a labour contract or contractor’s agreement in Estonia
  • income from business carried out in Estonia
  • interest income received from Estonia (only if it is substantially higher than that of similar debt claims)
  • royalties
  • income from the lease of assets located in Estonia
  • gains from disposal of assets located in Estonia
  • directors’ fees paid by Estonian enterprises; » income of a sportsman or an artist from his or her activities in Estonia
  • pensions and scholarships
Category: Taxis in Estonia
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Permanent establishment is something that people are usually not aware of, but it is important to consider as it can determine where you have to pay the taxes. Permanent establishment occurs in a different country than where your company is registered, and in a location where the business management and selling goods or services happens. So, if you permanently manage your business from another country, then you have the risk of having a permanent establishment there. For example, if you have an Estonian company, but manage your business in Finland, then this might result in a permanent establishment in Finland and means that taxation will be according to the Finnish tax rules. Besides management location and permanently selling in some country, a permanent establishment might occur if you sign agreements with the clients and negotiate about the prices in some other country than where your company is established. Other aspects can also create a permanent establishment for your company in a foreign country. As taxes are case sensitive, then a tax advisor has to evaluate and analyse the nature of your company’s business and see whether there is a risk for a permanent establishment occurring somewhere else.

So, if the permanent establishment happens, then your tax residency might change, and you have to start paying taxes in that foreign country. In that case, you will be notified about the tax obligations by this country’s government. For example, the Finnish tax office might see that you’re conducting your business in Finland and therefore lets you know that, as you have a permanent establishment in Finland, you have to pay the taxes in Finland and according to their rules.

All the above means that once a permanent establishment occurs, then Estonian regular taxation rules do not apply to your company anymore. So, at the end of the year, you have to pay taxes according to the laws of the country where you have the permanent establishment.

It is important to evaluate all the risks that you have regarding the permanent establishment when starting a business. As mentioned earlier, permanent establishment mainly takes place if you manage the business or sell goods or services permanently in a different country from where your company is established, but there are also many other aspects to consider. So, it is recommended to get a tax consultation before starting a company in Estonia, just to save you money and nerves in the future and avoid arguments with tax offices about where you are obligated to pay the taxes.

Category: Taxis in Estonia
Tags: Estonia, Tax
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The rate of social tax is 33% (20% for social security and 13% for health insurance). Besides the social tax, unemployment insurance tax at a rate of 0.8% must be paid on the gross salary (an additional 1.6% is withheld from the employees’ salary).

Employers registered in Estonia (including the permanent establishments of foreign entities) must pay social tax on all payments made to employees, except on those specifically exempted by law.

Category: Taxis in Estonia
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In case the company has employees who are not Estonian tax residents and who live and work outside Estonia, salary payments to these foreign employees are not taxed in Estonia and we do not submit any tax declarations about these employees.

In such case, these foreign employees must declare their income from your Estonian company in the country in which they live and are tax residents.

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In case your company has made profit, it is possible to pay dividend to the shareholders. Shareholders receive dividends proportionately to the share of the company that they own.

NB! Before the company is allowed to pay dividend, the company’s share capital needs to be paid into the company bank account.

After you have made the share capital payment, please inform your e-Residency hub accountant, so we could formulate the changes in the company registration documents

Dividends are taxed with 20% corporate income tax.

Example: A company decides to spend €100,000 of its accumulated profit to make a dividend payment. This sum is divided in the following manner:

  • €80,000 is paid out to company shareholders according to their shares of the company
  • €20,000 € is paid as the Estonian company’s corporate income tax to the Estonian Tax and Customs Board (the tax payment is made no later than on the 10th day of the following calendar month)

In the case described above, the €80,000 which is received by the company’s shareholders, may be considered their income in the country where they are tax residents. It may therefore be taxed with a personal income tax in their country of residence. Please check with a tax advisor in your country of residence to find out if this applies to you.

Category: Taxis in Estonia
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An e-resident is a non-resident according to Estonian tax legislation. Only income derived in Estonia is taxed in Estonia.

If there is no activity or income derived from Estonia, taxes should be paid in the country where the service is provided or activity is done or income is derived from, the pure e-residency alone does not influence the foreign or Estonian taxation.

An Estonian company established by an e-resident is an Estonian tax resident. The Estonian e-residency does not automatically exempt from taxation elsewhere.

Tax residency is the place where you actually have to pay the taxes. For example, if you are an Estonian citizen, but have lived more than 183 days per year in Finland, then you become a tax resident in Finland and have to pay the taxes there.

In general, a company’s tax residency is in the country where the company is established. So, if the company is established in Estonia, then by law the tax residency is in Estonia. There are exceptions to this rule that will change the tax residency of your company, which we will discuss later in this article.

When talking about tax residency or even e-Residency, it is important to emphasize that neither is an actual residency. So, if you receive your e-Residency card, then this doesn’t make you a resident nor a tax resident of Estonia – it is a common false perception. E-Residency is not related to visa or a resident permit and doesn’t enable you to travel to Estonia. E-Residency card is a digital identity that allows you to run a business in Estonia from the distance and fully online.

NB!

  • e-Residency will not change your personal tax residency
  • A company registered in Estonia is automatically a tax resident in Estonia
  • Your personal residency may trigger tax residency for your company in your place of residence as well
Categories: General, Taxis in Estonia
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To explain tax residency and citizenship, we first need to consider that there are two separate parties involved: a private and a legal person. This means that your company is a legal person, and you alone are the private person.

Citizenship only applies to a private person and is determined by your passport. The tax residency on the other hand is not the same as citizenship and is determined by tax laws. The tax residency status can be in the same country as your citizenship, but it also might be different or change in time.

Categories: General, Taxis in Estonia
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An e-resident is a non-resident according to Estonian tax legislation.

Only income derived in Estonia is taxed in Estonia.

If there is no activity or income derived from Estonia, taxes should be paid in the country where the service is provided or activity is done or income is derived from, the pure e-residency alone does not influence the foreign or Estonian taxation.

The Estonian e-residency does not automatically exempt from taxation elsewhere.

An Estonian company established by an e-resident is an Estonian tax resident.

Category: Taxis in Estonia
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There is no corporate income tax on retained and reinvested profits.

Tax on distributed profits is 14-20%.

Distributed profits include:

  • corporate profits distributed in the tax period
  • gifts, donations and representation expenses
  • expenses and payments not related to business
  • transfer of the assets of the permanent establishment to its head office or to other companies

Dividends paid to non-residents are no longer subject to withholding tax, irrespective of participation in the share capital of the distributing Estonian company. However, various withholding taxes may still apply to other payments to non-residents if they do not have a permanent establishment in Estonia or unless the tax treaties otherwise provide.

As the tax period for corporate entities is a month, income tax must be returned and paid monthly by the 10th day of the following month.

It is possible to run your company without any corporate income taxation at all.

Category: Taxis in Estonia
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In order to register for VAT, a foreign company must submit an application form R2 and an extract from the company register of the country where the company is located regarding the persons entitled to representation, address, etc. and an application for registration as a VAT payer.

Form R2 can be found on our website https://www.emta.ee/sites/default/files/ariklient/registreerimine-ettevotlus/mitteresident/vorm_r2_est-eng.pdf

Application for registration as a VAT payer https://www.emta.ee/sites/default/files/ariklient/registreerimine-ettevotlus/kaibaksuoikeustuslane/kmkr_avaldus_eng.pdf

Documents can be submitted either by a person authorized to represent or by an authorized person under a notarial power of attorney in our office on site.

We also accept documents sent by post if the specimen signature of the authorized person is notarized or sent digitally signed (digital signature of the authorized person) to our e-mail address emta@emta.ee or submitted to our service office on site.

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Trademark registration (3)

  1. Exclusive rights

    Once your Trademark is registered, you will have exclusive rights and no one else will be able to use the same mark. Trademark registration is one of the most powerful tools how companies are able to protect themselves from unfair competition and avoid that someone else will use their brand for business purposes. It is proven to be very useful to Fintech startups, because it is easier (and cheaper) to register your Trademark than to go to court and prove that someone has used your brand name if you haven’t registered Trademark. So far there are already several EU Members States (Estonia, Germany, Spain, etc.) who are checking EUIPO existing trademarks before registering a company. This means that if you have registered Trademark with your company name, no one else will be able to register a company with the same name, unless you will grant them permission. It is expected that with development of technologies, more EU Member States will start to check existing TM’s before approving company registration.

  2. Additional value to your company

    Trademark Registration significantly increases value of the company. This aspect is extremely important to companies who seek to receive funding from investors and they need to determine pre-seed value of the company. One of the key aspects which goes in to pre-money valuation is Protection of Intellectual Property. Before investors will invest in your business, they have to make sure that their investments will be protected and one of the best ways how to protect your brand is by Trademark Registration. It is proven that startups with registered Trademarks are valued higher than the ones who haven’t registered any Trademarks.

  3. Brand development

    With existing trademark which covers all EU, company will be able to develop business under the same name in all EU countries. This is very useful for startups who intend to start small and then scale their business. In startup environment where investor pitches are usually publicly available because they are streamed online, it is possible that someone will register a company with the same name in other Member State and later on will use it against you. This will cause problems for your business to expand to new market and it is possible that you will have to do it under different business name.

Tags: Estonia, EU, Trademark
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Allowed are:

  • Estonian, Latvian, Lithuanian and Belgium ID-Card/Estonian e-resident card/Estonian and Lithuanian Mobile-ID
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For this, you have to give us the right of representation in the Estonian Tax and Customs Board.

That is, either by authorizing us directly with the ID card through the Estonian Tax and Customs Board e-environment or giving us the Power of Attorney.

Take a look tutorial video:

https://www.youtube.com/watch?v=uKJ3zgS5oTc

.. and don’t forget to subscribe to our Youtube channel.

 

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VAT number (6)

The VAT registration obligation in Estonia arises from the moment when the company’s sales turnover exceeds 40 000 EUR per the calendar year.

At the same time, the company may apply for VAT status before it reaches this amount.

The VAT number registration can be initiated after you’ve registered your company.

Category: VAT number
Tags: Estonia, VAT
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Allowed are:

  • Estonian, Latvian, Lithuanian and Belgium ID-Card/Estonian e-resident card/Estonian and Lithuanian Mobile-ID
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For this, you have to give us the right of representation in the Estonian Tax and Customs Board.

That is, either by authorizing us directly with the ID card through the Estonian Tax and Customs Board e-environment or giving us the Power of Attorney.

Take a look tutorial video:

https://www.youtube.com/watch?v=uKJ3zgS5oTc

.. and don’t forget to subscribe to our Youtube channel.

 

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An authorization is a collection of rights within the limits of which a representative may act on behalf of the principal. It is essential for the Estonian Tax and Customs Board that the content of authorization would be understandable and the person granting the authorization and authorized person would be identifiable. An authorization may be granted orally or in written form (by a power of attorney).

The Estonian Tax and Customs Board shall accept:

  • an oral authorization – is valid on procedural acts only together with a party to the proceedings;
  • an unattested written authorization, unless the legislation states the different obligatory form of authorization;
  • an authorization attested by a notary;
  • an authorization signed digitally;
  • an authorization granted by the legal representative of a legal person personally via the e-MTA (the menu item ‘Communication’ → ‘Correspondence’);
  • an authorization confirmed by a sworn advocate.
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The reverse charge is widely imposed on taxable transaction, which means that whenever the place of supply is Estonia and the receiver of the goods or services is a taxable person with an Estonian VAT number, no obligation for registration arises for the non-resident supplier. If the purchaser is not a VAT liable in Estonia, registration obligation arises for the provider of goods or services. The registration obligation shall arise for the foreign taxable person as of the date on which the taxable supply is created. However, if zero-rated supplies are made in a free zone, free warehouse or in a customs warehouse, the person making the supplies is exempted from registration.

If a taxable person of another Member State is engaged in distance selling to a person of Estonia (excluding distance selling of excise goods) and the taxable value of the supply of the distance selling exceeds 35 000 euros as calculated from the beginning of a calendar year, the registration obligation shall arise for the person as of the date on which the supply reaches the specified amount.

If a taxable person of another Member State is engaged in the distance selling of excise goods to a natural person of Estonia for personal use, the registration obligation shall arise for the taxable person as of the date on which the supply of the distance selling of excise goods is created.

In order to register as a VAT liable, an application for registration is submitted to the Estonian Tax and Customs Board.

Upon registration, it is required to attend the procedure in person, i.e. the person seeking for registration cannot e-mail or send the registration form by post or fax. However, it is possible to use either an authorised person or a tax representative for the procedure. The tax authority shall register a person as a taxable person by entering the data concerning the person in the register of taxable persons as on the date on which the registration obligation arose, within five working days as of the receipt of the application. Upon registration, we shall issue one VAT identification number for all purposes and for all taxable persons. The structure of the number is always EE and 9 digits (e.g. EE012345678).

Tags: Estonia, VAT
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In order to register for VAT, a foreign company must submit an application form R2 and an extract from the company register of the country where the company is located regarding the persons entitled to representation, address, etc. and an application for registration as a VAT payer.

Form R2 can be found on our website https://www.emta.ee/sites/default/files/ariklient/registreerimine-ettevotlus/mitteresident/vorm_r2_est-eng.pdf

Application for registration as a VAT payer https://www.emta.ee/sites/default/files/ariklient/registreerimine-ettevotlus/kaibaksuoikeustuslane/kmkr_avaldus_eng.pdf

Documents can be submitted either by a person authorized to represent or by an authorized person under a notarial power of attorney in our office on site.

We also accept documents sent by post if the specimen signature of the authorized person is notarized or sent digitally signed (digital signature of the authorized person) to our e-mail address emta@emta.ee or submitted to our service office on site.

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