Incorporation in the EU

How to incorporate in Estonia: A simple introduction to Estonian taxes

Are you interested in starting a company in Estonia? Are you operating from another location and are worried that not being a resident could affect your chances of enjoying some of the numerous benefits that this destination has to offer, like low tax rates or 0% tax on undistributed profit?

If you’re looking to take advantage of a whole host of things that establishing a business in Estonia can offer, but don’t quite know where to begin, you’ve come to the right place. Here, you’ll find all the information you need to get started.

How do you register a company in Estonia?

Not only is Estonia a tax haven, but many individuals choose to set up a business here because of how easy it can be to do so, even if you’re not a resident. Here’s a quick and easy guide to establishing a business in Estonia:

  1. One of the first things that you’re going to need is a name for your business – and it must not already be in use. Fortunately, it shouldn’t be too hard to secure your chosen moniker
  2. Get in touch with a business service provider and obtain a legal address in Estonia if you don’t already have one
  3. You can register your business online, through the company registration portal. This is generally inexpensive, often costing around €265, and sharing capital through the state portal when applying. Your application will be reviewed in the space of a working day and if all is well, you should have no issues
  4. If you have any employees (or plan to hire some), keep in mind that they’ll need to be registered on the Tax and Customs Board

In certain circumstances, you may need a license if your business’s area of activity is considered a special requirement, but this isn’t too common or difficult to address.

A simple introduction to taxes in Estonia

As mentioned earlier, one of the most attractive things about forming a company in Estonia is the tax system, and there are quite a few different things that you’re going to need to know before starting your company here. For example, income tax isn’t assessed by the profit earned yearly – instead, it’s calculated monthly and only once the profits have been distributed.

Regardless of how it all works, most will find that the taxes tend to be quite appealing in Estonia, with corporate tax rates usually being a flat 20%. Entrepreneurs will generally need to consider the 20% income tax and 33% social tax from director’s fees.

Accounting requirements in Estonia

It’s worth keeping in mind that an account entity will need to prepare an annual report at the end of each year. This should be done at the Commercial Register and in most cases, you’ll be given 6 months after the end of the financial year to do so.

How could Mükellef help you?

If you’re an entrepreneur who wants to set up a business in Estonia (as well as other areas in the EU, UK, and even the US), you might be interested in taking a closer look into what a company like Mükellef could do for you.

Mükellef was created to help entrepreneurs establish businesses with ease, wherever they are in the world. Everything is taken care of online, so you can simply sit back and relax as your needs are met by a team of professionals. And as if this wasn’t enough, they can even assist you with running your business; with additional services like bookkeeping.

If you’re interested in getting started with Mükellef, it might be worth paying a visit to this link. With everything on offer, it’s certainly going to be a great idea to take the time to look into their services and more.

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