Estonia is a country of the European Union and its currency is Euro.
Benefits of incorporating in Estonia
- One of the cheapest companies to run in Europe.
- You can create the company, declare the revenue and VAT from their website. You only need an Estonian translator to write management board notice at the end of the year. Since you will upload those documents to the Estonian government website, you don’t need to fly to Estonia.
- No audited accounts from small companies. Tax audits are only mandatory if the turnover exceeds 1,000,000 euros
- As long as money isn’t distributed to shareholders, the company does not pay taxes.
- Accounting software provided by Estonian government.
- You don’t need a middleman for your business as you can do all the paperwork online using one of the government websites.
- Official translation of Estonian law in English
- Official translation of government websites in English
- Invoices don’t need to be in Estonian, they can be in English
- No dividend withholding tax
- Only a registered office address in Estonia needed
- No need for a local accountant, a local secretary, and local company formation agents.
- No need to be a EU director/shareholder to incorporate an Estonian company
Disadvantages of incorporating in Estonia
- You have to pay 25% tax on top of distributed profits. (profit x 20/80 according to Estonian law)
- Webhosting servers are more expensive than in West Europe.
- Overpriced attorneys compared to local attorney salary. We hired an attorney who cost us 160 euros/hours as much as a Parisian attorney.
- It is advised to avoid Estonian attorneys and consultants firms as they are very close to being scammers. If there is no Ikea in Estonia, that’s because Ingvar Kamprad, its founder has been scammed twice in Estonia.
- The yearly director report should be provided in Estonian.