Registration of a startup in Estonia in 2022
Registering a startup in Estonia in 2022 is ideal for business. If in other EU countries young companies, because of high costs, cannot afford to register before a stable income, the situation is different here. The money that the founder invests in the business is not taxed, as well as income before the distribution of profits, so you can safely invest all the money made here in the business. Another plus is that foreigners can get an e-residency, which allows them to run a company without visiting the country.
Estonian startup visa
A few years ago Estonia activated a program for issuing startup visas to local and foreign businesspeople. It is aimed at entrepreneurs who want to open a startup in Estonia 2022 in such areas:
- laser technology;
- information technology;
The application can be submitted both before and after the registration of the company. It together with the business plan should be sent to the Ministry of Economy of Estonia for verification.
The deadline for verification is two weeks. If the project is given a verification code, it is a signal that the startup is approved, and the applicant can apply for a residence permit for all the founders, project participants, and their families. The visa allows foreign businesspeople to live in Estonia for up to 5 years and develop a business in a country that is actively introducing digital technology.
How to open a startup in Estonia: preparation
The most convenient form for registering a startup is the individual entrepreneur (FIE). This form is suitable for a single founder. Start-up capital is not required, and there are no management bodies.
For comparison, to register a company with several founders, the startup capital starts from 2.5 thousand euros. In addition, it is necessary to create authorities that will supervise its work.
Having chosen the form of registration, one must:
- Choose a unique name that is not in the register, and register it;
- Choose the field of activity, for that use the official "Estonian Classification of Economic Activities";
- Appoint a contact person, who lives in Estonia. If you have a startup visa and live in this country, the problem is solved by itself;
- Get a legal address. If you don't have an office, your contact person's address can be your legal address.
How does registering a startup in Estonia work
Registering with the e-business registry is the fastest and most convenient way to register your startup in Estonia. In order to enter the register, you need an e-resident ID card and digital signature software. In addition, persons who have Latvian, Lithuanian, Belgian, Portuguese or Finnish passports can apply for registration.
Important: commercial associations or public limited liability companies will not be able to register electronically.
Documents needed for registering a startup
- notarized copy of the foreign passport of the founder, shareholders;
- proof of address (utility bill);
- business plan;
- e-mail address of the company owner;
- public e-mail address of the company;
- personal information about the director of the company.
How long does it take to review the application
The application will be reviewed within one business day and an email notification of registration will be sent.
What to do after the registration of the startup
Once the company is registered, you need to open a bank account. Depending on the field of activity and the size of the company, additional steps need to be taken (IT-OFFSHORE specialists will help):
- If there are special requirements to the sphere of activity, it is necessary to obtain a license (e.g. cryptocurrency exchange, virtual wallet services);
- Register the company as a VAT payer on the website of the Tax and Customs Department;
- If there are employees, they must be registered in the employment register on the website of the Tax and Customs Board.
A company that uses its income rather than from profits can pay no income tax. Another plus in Estonia is that there is no tax on undistributed profits. Tax must be paid when dividends are distributed to shareholders. This allows businesses in Estonia to invest their profits in business development, advertising, and the purchase of necessary equipment.