Starting a business in Estonia: Guide for Indian residents with requirements, fees, and opening Estonia business account

The northern European country of Estonia has become a popular place for modern digital businesses. With a business-friendly government and digital services to make the process easy, foreign entrepreneurs can register a business in the country as long as the requirements are met. Learn more about opening a business in Estonia and what to expect from the process if you are from India.

Can you register a company in Estonia from India?

Yes, Indian citizens can register a company in Estonia - and can do so conveniently through Estonian e-Residency. E-Residency is open to all nationalities and is best suited for entrepreneurs, consultants, digital nomads or freelancers.¹

Here are the general steps to register a company in Estonia:

1. Apply for e-Residency. You can apply for e-Residency online and pick up the card in New Delhi.
2. Choose a company name and check availability. You can use the free tool on the website of the e-Business Register to check the availability of company names.
3. Obtain a legal address and contact person. The contact person ensures communication between the Estonian authorities and you. Service providers are available that can help establish a legal Estonian address and contact person.
4. Register your company online at the company registration portal. You can pay the state fee online when you submit your application.
5. Receive confirmation. Once your company has been registered, you will receive a confirmation notice from the e-Business Register.
6. Open a bank account. You will need to open a bank account to help operate locally. If working with multiple countries, consider business accounts with fintech companies such as Wise to help with low-cost international transfers.

The e-Residency is key to being able to conveniently open and operate a business in Estonia as an entrepreneur. Once you have received your e-Residency card - more on that process later in the article - you can then move ahead with registering your business.

If you are not an entrepreneur or freelancer, you can start and register a company in Estonia only if you hold any of the following:

• Estonian ID card.
• Estonian Smart-ID.
• Estonian Mobile ID.

You can register your company in the Estonian government's Company Registration Portal if you qualify.²

Different types of companies in Estonia

There are five main types of company structures in Estonia:³

• Sole proprietor (FIE): This type of company is best for entrepreneurs or anyone working on their own. It is relatively easy to set up and manage, but the owner personally takes responsibility for the company’s debts and obligations.
• Private limited company (OÜ): This is the most common type of company structure in Estonia and is suitable for businesses of all sizes. A private limited company is a separate legal entity, so the owners or partners are not personally responsible for the company’s obligations.
• Public limited company (AS): This type of company structure is more complex than a private limited company, but it offers more flexibility and opportunities for raising capital. It is a good option for larger businesses that plan to go public or have many shareholders. There is a minimum start-up capital requirement of €25,000 EUR.
• General partnership (TÜ): This type of company structure is formed by two or more partners who share unlimited responsibility for the company's debts and obligations. It is a simple and inexpensive way to set up a business, but it requires a partnership agreement.
• Limited partnership (UÜ): This type of company structure is similar to a general partnership but has two types of partners: general and limited. General partners have unlimited liability, while limited partners' liability is restricted to their investment in the company. A partnership agreement is required.
• Commercial association (ühistu): This type of company structure is formed by a group of people who come together to achieve a common goal. It is a non-profit organization that is owned and operated by its members.

In addition to these six main types of company structures, several other specialized company structures are available in Estonia.

The government also categorizes companies based on their total assets per balance sheet data. Companies can be considered a micro-undertaking, where sales revenue is below €50,000 EUR, to a large undertaking, which is €40 million EUR or more.

The best type of company structure for your business will depend on several factors, including the size and type of your business, your ownership structure, and your financial goals. It is important to seek professional advice from a lawyer or accountant before choosing a company structure for your business.

Requirements to start an Estonia company from India

The first step to becoming an entrepreneur, freelancer, consultant or solopreneur in Estonia is to get an e-Residency card. Here is how to complete the steps from India:⁴

1. Prepare your documents. You will need to submit documents for an e-Residency application. The documents include your CV, motivation statement, copy of your travel document or ID like a passport and a digital passport photo.
2. Complete the application online. The application can be completed at the Estonian Police and Border Guard Board website.
3. Pay the fee online. The fee ranges from €100 - 130 EUR and can be paid with a Visa or Mastercard.
4. Track your application. You can track your application online. An application decision can take up to a month, and you will be contacted by email if your application requires more information.
5. If approved, pick up the e-Residency card and kit. Delivery of your card can take two to five weeks. The card pick-up will be at the Estonian embassy in New Delhi, and make sure to bring your ID.
6. Set up your card. This can be done online; you must install the ID software provided to you in your kit.

Once you have your e-Residency card, you can start the process of establishing your business in Estonia. If you are looking for support to navigate the process, consider using one of the expert service providers for Estonia. They can help with company formation, international and domestic tax consulting, bank account opening, legal address, and setting up a contact person.⁵

What does it cost to run an Estonia company

The cost of running a company in Estonia depends on several factors, including the size and type of your business, industry, and location. However, there are some general costs that all Estonian companies must pay:⁶

• State fees: The Estonian government charges a fee for businesses, like the company registration fee. Private limited companies also have an annual business license fee of €100 EUR. Take a look at the next section for the business registration cost depending on the type of company.
• Accounting and tax preparation: It’s recommended that all Estonian companies hire an accountant to prepare their financial statements and tax returns. The cost of accounting services varies depending on the size and complexity of your business but starts from €50 EUR per month.
• Bank fees: Estonian banks charge a variety of fees for business accounts, such as monthly account maintenance fees and transaction fees. The cost of bank fees will vary depending on the bank you choose and the types of services you need.
• Other expenses: Other common expenses for Estonian companies include rent, utilities, salaries, and marketing costs.

In addition to these general costs, Estonian companies may have to pay other expenses depending on their industry and specific business. For example, companies that sell goods online may have to pay e-commerce fees, and companies that employ foreign workers may have to pay work permit fees.

Starting costs for setting up the company

There is a state fee that each type of company is required to pay:⁷

Depending on your type of structure, you may also need to get a notary, which can add to the cost. And if you hire a service provider, you can expect that to be an average cost of €200-400 EUR annually.

Taxes and Government Fees

The Estonian government has a tax that is collected monthly and only when profits have been distributed. The corporate tax rate is a 20% flat rate. If your annual taxable turnover is below €40,000 EUR, you are not required to register for VAT. The Estonian government's website on taxation can help you plan for tax payments.⁹

Starting a business account for an Estonian company

To start a business account for an Estonian company, you will need to:¹⁰

• Choose a bank. Many banks in Estonia offer business banking services. The e-Residency marketplace has a list of business account providers to choose from. You can compare different banks and their fees to find the best option for your business.
• Gather the required documents. The specific documentation required will vary depending on your chosen bank, but all will require your company’s registration and ID.
• Submit your application to the bank. You can submit your application online or in person at a bank branch. Many new account providers make opening an account online or through an app easy.
• Open the account. Once your application has been approved, you may need to deposit the minimum opening balance required by the bank.

A local business account will help you make local payments, including for taxes, and the right partner can also help make international transactions.

If you want to take your business global with low fees and at the real mid-market exchange rate, check out the Wise Business Account.

🔍Need a personal bank account too? Here’s our guide to opening a bank account in Estonia.

Meet Wise Business

The Wise Business Account offers a business account that let's you operate your international business from anywhere. It has everything a Wise Account offers, plus extra tools businesses need to grow and operate internationally. You can send money to suppliers, freelancers or employees globally. And with bank account details in multiple currencies, clients can make payments in the currency that is easiest for them.

Our online process lets you open and verify your Estonia business account from India. With our customer support available in English and our commitment to providing a seamless digital experience, Wise offers an ideal alternative to traditional banks for your business abroad.

Business categories supported on Wise 👉

Wise Business integrates easily into your business with integrations into accounting software like QuickBooks and Xero. Plus you can make batch payments so making payments gets even easier.

Moving to Estonia from India

E-Residency is not a travel visa. It is a digital id that lets you to start and operate a company in Estonia. If you're looking to travel the Estonian government also offers regular visas for working and staying in the country. Remember that you need to have the appropriate visa to work in Estonia - tourist visas and most student visas do not allow for earning income. Estonian employers that hire Indians and require working on-site must sponsor an employment visa.

In addition to the e-Residency visa, another unique visa option is the Digital Nomad Visa. The visa requires an active employment contract that allows for remote work and an income minimum of €4,500 per month. This visa can be for a long or short stay in Estonia.¹¹