How to start a business in Estonia

Panna Kemenes

If you were to name two things Estonians are proud of, it'd be their entrepreneurial spirit and advanced system of digital governance. Put these two things together and it's no surprise that the process to register a business in Estonia is a simple one, most of which can be completed in only a few minutes online.

Despite being a small country, Estonia has a developing economy, a simple tax system, and typically pro-business governments. It’s a great place for expats to live and build their own enterprises, whether they work in high tech startups or more traditional segments such as manufacturing, or the service industry.

If you’re thinking of setting up a business in Estonia, you need to know how. Read our guide to get you started.


What types of corporate entities are there in Estonia?

Choosing your business type is an important step. Consider what you’d like your business to be in the future as well as what will suit you right now. Taking local advice can help if you’re not sure which route to take.

Estonian law allows for several different types of corporate structure:

  • Private limited company
  • Public limited company
  • Sole proprietor
  • General partnership
  • Limited partnership
  • Commercial association

The private limited company, known in Estonian as osaühing, but more commonly abbreviated to , is the corporate structure frequently used for people working alone or in small groups.

Similar to the public limited company (in Estonian, aktsiaselts or AS), the liabilities of the founders is limited to the amount of share capital paid in.

Because the OÜ structure is the most simple and commonly used, it's possible to set up this type of business using an expedited procedure in which all documents are submitted online and signed digitally. You can even do this without having the share capital upfront, although the business owners must promise to pay the capital pledged when it's called upon.

To register digitally you must have the Estonian digital residence card (issued to all residents upon application), or be an e-resident, holding a digital residence card.

Aside from these company types, you can set up as a sole proprietor in Estonia under the FIE registration. In this case you need to register, and the liabilities associated with the business are yours. However, because the alternative for sole traders is to register quickly and easily as an OÜ, this is far more common. In this way, liabilities are limited to the initial investment.

The partnership options include a general partnership (where the partners are wholly liable for any debts accrued by the company), and a limited structure, in which at least one partner might be liable only to the extent of their initial investment.

A commercial association is created to allow the founders and members to collaborate in their mutual interests. This isn't such a common format for expats setting up a business in Estonia.

Things to know before starting a business in Estonia

If you're starting a business in Estonia as a resident of the country, then you'll find that much of the administration of your business is done using your digital residence card. With this, you can sign documents and pay your taxes, all online. It's also the simplest way to create your business.

However, if you're not a resident of Estonia you can actually still set up a business there, by becoming an e-resident. This unusual system allows you to get a digital residence card, and create a business, including accessing services such as banking within Estonia. Although this is a fairly new system, it has proved popular and is well supported by government and investment agencies.

To start a private limited company you must commit share capital of at least EUR 2,500 (although it can be more than this). In some cases you don’t need to pay the share capital immediately when you set up your business, although you may be unable to withdraw any profits from your business until you do so.

What is the company registration process in Estonia?

If you're registering a OÜ business and you (and any other shareholders) are able to sign documents digitally, then you can do so online through the company registration portal. You'll also need an e-reader for your residence card, which is easily found in Estonia.

To establish a private limited company, public limited limited company and commercial association you will have to pay a state fee of 200 euros. To establish a FIE, a general partnership or limited partnership, you will have to pay a state fee of 20 euros.

If you establish the company electronically under expedited procedure, the state fee will be 265 euros.¹

Follow the process on the portal to create the articles of association according to the available template and pay the registration fees. Then all you have to do is digitally sign the documents and you're done. Most of the information online is available in English, including the forms and explanation of the registration procedure.

If you can’t sign documents digitally then you can set up your company through a notary who will prepare the documentation for you. This is a more expensive option, as there will be a legal fee to pay on top of the state registration fee.

If you're working through a notary, you'll need to prepare:

  • Memorandum and articles of association
  • Application forms
  • Bank certificate confirming you've paid the minimum share capital
  • Certificate proving you've paid the state fee for registering a business

The notary will take your details and register your business using these documents, which will take two or three days. You'll have to provide your ID documents, signatures, and further information such as the registered address of the business (which can be a home address in some cases).

If you'd rather operate as a sole proprietor (FIE), this can also be done electronically so long as you have a digital ID card. You can also open your FIE business through a notary in much the same way as described above - although you'll also be liable for notary fees if you choose to take this route.

Legal obligations and responsibilities

If your company turnover will be high, you might need to register for VAT. This is mandatory if your company annual taxable turnover exceeds 40,000 euros per calendar year. In this case, you are required to register the company with the Estonian Tax and Customs Board as a VAT payer. You'll have three business days to submit the registration application from the day that you reach the 40,000-euro turnover threshold.¹

If the turnover is below that limit, registration is not obligatory. It could be beneficial if your turnover is lower than this in certain circumstances.

This is a requirement regardless of the type of company structure you select.

You'll have to pay taxes on your earnings in Estonia, which can be done electronically using your ID card. If you have a limited liability business you'll pay taxes through your business, at the point of submitting your annual accounts. This is treated separately to any personal tax liability. In the case of a sole proprietorship, your business earnings are taxed along with your personal affairs as one entity.

Where can I find help to start my business in Estonia?

Estonia’s government has been welcoming foreign investors and entrepreneurs for some time, and have a series of initiatives to help you settle into the country. The Estonian Investment Agency provides a wealth of information and useful contacts for new business owners.

The e-Estonia initiative encourages people from outside Estonia to get digital residency which allows them to open businesses and access services in Estonia. The government backed Startup Estonia aims to bring more startup entrepreneurs into the country.

Aside from these options there are numerous local networking and support groups, as well as incubators and events for budding entrepreneurs. You'll find a helping hand in the local chamber of commerce for your country, which will include members who have already moved to Estonia to start their businesses. For example, the American Chamber of Commerce, which is active in networking, government lobbying and helping businesses to navigate the Estonian ecosystem.

Once you’re in Estonia and ready to get going, look for local networking events on sites such as Meetup and Eventbrite. Here you can meet like minded people and build your customer and business contact book.

Although starting a business can be a daunting task, Estonia really is a great place to take that leap. With some planning, and a little bit of good luck, your business will get off to a flying start.

Get you international business off to the best start with Wise

When starting a business in Estonia, one thing that can make a big difference to your success is finding a business account that fits your needs. If you need to send or receive money from abroad at the least possible cost, consider using Wise. Not only does Wise use the mid-market exchange rate, but since your money is received and sent locally in both the sending and recipient currency, all those nasty international fees disappear. This leaves more money for your business.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also Send money to 160+ countries.

This makes life easy for international businesses.

Read the guide on how to open a Wise Business account
Some key features of Wise Business include:

Open a Wise Business account online


  1. Company registration cost

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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