Estonia is a state with one of the most attractive investment climates among European countries. Entrepreneurs from the Russian Federation, the EU and the countries of the former USSR have long appreciated innovative legislation in the field of high-tech fin-tech, zero tax rates and opportunities offered by jurisdictions that are not included in any of the “black” world lists. A company in Estonia, including one founded by non-residents, can trade with partners and sell products in Europe without intermediaries, engage in cryptocurrency
The country, which joined the European Union in 2004, has signed double taxation avoidance agreements with more than two dozen states, including the United States and Great Britain. In addition to tax benefits, a company in Estonia has other advantages:
- monthly reporting is not needed - taxed firms submit it once a year;
- there are no requirements for mandatory audit - it is carried out only in relation to some companies (with a turnover of 1,6 million euros, the number of employees from 24, assets from 800 thousand euros, etc.);
- there are no restrictions on the size of the authorized capital, and it can be formed within a year or even longer;
- the convenience of starting a business and interacting with state bodies - the e-State system operates in Estonia and most formalities are carried out by electronic means;
- As part of the company's management, only one director is sufficient, there are no residency requirements for board members (it is not necessary to be an Estonian citizen), etc.
Non-residents of Estonia are entitled to establish a business in one of the following forms:
- private company with limited liability - OÜ (analogue of LLC);
- Joint Stock Company - AS;
- partnerships in various forms - TU, UU;
- individual entrepreneurship - FIE.
The first form is most demanded among non-residents. It is especially convenient for medium-sized businesses and corporate structures. OÜ has the right to establish one owner, and he may enter the board - presence of Estonian residents is optional. The company requires from 2500 euros of registered capital. It can be deposited in money into an account opened before registration documents are issued, transferred in the form of property, or transferred when an application is submitted electronically. It is not necessary to pay authorized capitalbut before the distribution of dividends this must be done.
|Income Taxes||Income tax (min. Rate)||Income tax (max. Rate)||VAT|
|0% (20% on dividends)||20% + 33% social tax (0% on dividends)||20% + 33% social tax (0% on dividends)||20% (9% reduced rate)|
Estonian law provides for a rate 0% for non-profit sharing enterprises. Zero level is maintained if the company does not conduct business in the jurisdiction, does not sell goods or services to tax residents.
After the formation of dividends, they are charged 20%. There is also a zero rate for corporate tax. Prior to the distribution of profits, a company in Estonia may:
- accumulate funds in bank accounts in Estonia;
- reinvest without going beyond the framework of a regime with a zero tax rate;
- to take foreign economic loans - only interest will be taxed, and not the “body” of the loan.
VAT is standard 20%. They are not paid if the company sells goods outside the eurozone, therefore, for entrepreneurs from Russia, jurisdiction can be especially attractive. For organizations that have hired an Estonian resident, there is an additional tax - social, 33%. It is not levied on non-resident employees working outside the country. Additional fees (excise taxes, customs, land, transport, etc.) are provided only under certain conditions.
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