Registration of a tax-free company in Estonia

“Paying taxes is an obligation; paying little taxes is an art!” »(C)

I want to share the experience of successful company registration in Estonia. I will give a brief description of the jurisdiction, talk about the pitfalls that exist, and share the experience gained.

The task was as follows - to find a jurisdiction in which it is not necessary to pay income tax, while it was convenient for customers from the USA, Canada and the EU to work with it. The real office to open in this country was not the task.

The main activity of the company is software development (a classic outsourcing company with a staff of ~ 20 developers).

We did not want to use offshores , although we could use, for example, the same Belize with its closed share registers and a relatively cheap price tag for registering and using nominee services.

Hong Kong arranged in all respects (if you do not conduct activities in Hong Kong, the company is exempt from paying income tax), with the exception of the cost of registration and maintenance of the company, they also did not want to pay for annual audits.

In Scotland and Englandit was theoretically possible to register a company (partnership) and not pay taxes on the grounds that the founders (partners) are non-residents of these states, but this is not legally correct, and there was only one founder. It was possible to find the second founder (partner) in the form of a nominal shareholder, but this is an extra cost.

We settled on Estonia. The total budget for company registration and account opening was laid in the amount of 2500 euros. To accomplish the task, lawyers from Estonia were involved.

Jurisdiction Overview

So, in Estonia, the main ones are two types of companies:

OÜ - an analogue of Russian and Ukrainian LLC, the minimum authorized capital - 2500 euros.

AS is a joint stock company, the minimum authorized capital is 25,000 euros.

The authorized capital is not required to be paid into the company’s account, it can only be declared at the time of registration
(hereinafter I will tell you a trick on how to legally not contribute the authorized capital).

Corporate Income Tax in Estonia

0% - if the company does not distribute profits among its members (shareholders).
~ 26.6% - if the company distributes profits among its members (shareholders) in the form of dividends.

You will be surprised, but indeed, if you do not pay dividends to yourself, then there will be no obligation to pay taxes in Estonia. If you do not distribute dividends to the founders, Estonian law gives you the right not to contribute real registered capital, you simply declare this amount “on paper” at registration. That is, it will not be necessary to deposit an amount of 2,500 euros (and for joint-stock companies 25,000 euros) to the company's account.


The rate of VAT is 20%.

If you provide any B2B IT services (for example, software development), there will be no obligation to pay VAT for intra-union sales outside Estonia, as well as invoices without VAT (reverce charge mechanism will work), and for sales outside the EU Estonian VAT is not provided at all.

Estonia is a member of the OECD. Membership provides the company’s counterparties with the convenience of conducting transactions to the corporate account, and they (the counterparties) will be able to recognize payments as deductible business expenses in their own country without any problems (in cases established by their legislation).

As an added benefit, Estonia has a huge number of double tax treaties.

Nominee Services

In Estonia, the registers of founders are publicly available on the Internet. I am sure that not everyone will like it.
In order not to “shine” your surname in the register, you can use nominal services.

We used a nominal shareholder - a citizen of Latvia. By the way, lawyers from Estonia provided such services to us, with whom we entered into preliminary partnerships to register the company.

If we talk about legality in nominal terms, I want to upset you: continental law operates in Estonia and there is no legislative (or by creating judicial precedent) fixed institution of nominal services.

If you want to use a nominee shareholder, be aware that there is a risk that he will take over your company. I advise you to keep all correspondence with a nominee shareholder and collect as many written confirmations with the face value signature as possible, that he only "replaces" the real shareholder in the register. These leads will help in court.
It was easier for us, we had certain acquaintances and received recommendations and guarantees of a non-legal nature from loved ones.

In order to eliminate risks with a “scam” by a nominee shareholder, you can do the following:

a) register the company yourself and your surname will appear in the register of founders (but do not forget about the ban on placing capital abroad without permits);

b) register the parent company, for example, in offshore and make it a subsidiary of Estonia.

In continuation of the story about the “face values” I will say that in addition to the nominal shareholder, you can also use the nominal director. You will receive a power of attorney from him, on the basis of which you will act and sign documents on his behalf.

We did not use such a service, since it is not particularly needed.

Problems with the nominee director may be the same as with the shareholder. If he wants to "throw" you, he will "throw". The power of attorney will be revoked and you will lose control of the company until you return it through the court (if you return).

Documents that we received after registration

B-card is a printout indicating the date of registration of the company, the name of the company, information about the founders of the company and the company that was involved in the registration in Estonia, data on the main activities of the company, legal address, email address of the company.
Charter - the standard text of the charter.
The big minus is that everything is in Estonian, but Google helped solve the problem of the language barrier.
A letter of exemption and a statement by a nominee shareholder in English.
Plus company seal

Bank account

We opened in Latvia, because we found a bank there with interesting conditions for us and with a minimum commission for transferring money to countries of interest to us - 5 euros.

To open an account, we contacted the manager and submitted about this package of documents:
- corporate documents for an Estonian company;
- CV of the beneficiary;
- confirmation of the beneficiary's welfare (documents for an apartment, land, car);
- description of the company;
- sources of financing (provided extracts and tax returns on the business of the local beneficiary);
- main business partners (gave their details);
- international passport.

You can open an account in Estonia. By the way, after registering the company, we received a huge number of offers from Estonian banks to the mail that we indicated when registering the company.

In Estonia there is no currency control (there are no restrictions on the size of transactions, on withdrawals from the account) and this is a positive point.

Having a company in the EU, you get a huge number of banks in which you can open an account. It is important that the fees and conditions of the bank are comfortable for you.


In Estonia, bookkeeping is a must. The cost of submitting a report is approximately 600-700 euros per year. It’s easy to find an accountant, in our case, those lawyers who helped register the company also help with accounting.

Cash withdrawal

Money can be withdrawn from an Estonian company to its business entities under the pretext of “consulting services contracts” or “software development contracts”. It is very important that you are not considered related persons. It is better to consult an accountant in Estonia first, especially if you do not use a nominee shareholder.


By registering a company in Estonia, you can get a convenient business tool with relatively cheap maintenance and no income tax. There are a number of problematic issues associated with nominee services that must be foreseen and eliminated in advance.

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