Check company name, submit the registration application to the Commercial Register and deposit initial capital
Agency: Commercial Registry
The entrepreneur can check proposed names online at www.rik.ee. The law provides that the company business name shall be clearly distinguishable. It is also possible for entrepreneurs to deposit the initial capital in a bank via online banking as part of company registration process at the Commercial Register.
The costs of registration into the Commercial Register are EUR 145 for regular registration or EUR 190 for expedited registration.
A separate registration with the National Social Insurance Board, which gets its information from the Estonian Tax and Customs Board, is not required. Health insurance in Estonia is through a compulsory scheme under which employers are obliged by law to pay social tax (the source revenue for health insurance) for their employees. The rate of social tax is 33% of the taxable amount. This tax must be paid by the tenth day of the month following the taxable period, and the corresponding tax return must be submitted to the local Tax and Customs Board office of the residence or seat of the payers of social tax by the same date.
If the share capital is higher than EUR 25,000 the entrepreneur needs to deposit it in a bank. However, if the decided share capital is not over EUR 25,000, it can be established at the memorandum of association that the shareholders are not obliged to make pre-payments for the shares.
In that case a shareholder does not make a payment for the share, it will be personally liable to the company in the amount of his/her unpaid share contribution. In the last year, more than 70% of the companies were founded without making pre-payments.
In order to be able to use a start-up bank account (opened for paying in the initial share capital) for the company’s day-to-day activities the management board member(s) of the company (after the incorporation process has been completed) has/have to personally apply (at the commercial bank) for transformation of the start-up bank account of the company into a regular current account.
According to the Money Laundering and Terrorist Financing Prevention Act which was adopted 26 October 2017, all Estonian undertakings must disclose data on their beneficial owners to the public registry starting from 1 September 2018. The beneficial owner information is submitted in the same service with incorporation registration and it is free of charge. The other option is to submit the information of the beneficial ownership by the notary, which would incur additional notary fees.
Time and cost: Less than 1 day (online procedure), EUR 145 regular registration or EUR 190 expedited registration
Register for VAT at the Estonian National Tax Board
Agency: Estonian National Tax and Customs Board
The company must register itself as VAT payer if the taxable turnover of the company, excluding imports of goods, exceeds EUR 40,000, as calculated from the beginning of the calendar year. The VAT Act is available at https://www.riigiteataja.ee/en/eli/ee/527022014003/consolide/current
The company’s management board must file an application for company registration, making the company liable for VAT with the Tax and Customs Board, within 3 days as of the date on which the taxable turnover of the company. The tax authority shall register a person as a taxable person by entering the data concerning the person in the register of taxable persons as on the date on which the registration obligation arose, within five working days as of the receipt of the application. Registration may be (and in the practice, often is) affected immediately after establishment.
According to subsection 20(1) of the Value-Added Tax Act, an application for registration may be submitted through the information system of the commercial register in a digitally signed format or applied to a notary for the preparation of an application and submitted thereof through the information system of the e-notary.
Time and cost: 3 days, no charge
Register employees with the Employment Register
Agency: Estonian Tax and Customs Board
On 1 July 2014 the amended Taxation Act establishing the employment register, where all the natural and legal persons that work are required to register the persons employed by them with the Estonian Tax and Customs Board, entered into force. Since that moment the employers are not required to submit the data on the employed persons to the Estonian Health Insurance Fund.
Commencement of the employment must be recorded latest by the moment when an employee commnces the work. When terminating or suspending the employment, employers have ten days to record the termination or suspension as of the day of suspension or termination of the employment.
Time and cost: Less than 1 day (online procedure, simultaneous with previous procedure), no charge
