In short
The usual structure is the OÜ (private limited company). Minimum capital is €0.01, paid in at founding; the state fee is €265 and registration usually takes 1–2 working days through the online portal, with no notary. You sign with an Estonian ID card, e-Residency card, Mobile-ID or Smart-ID. The company needs an Estonian address, and if it is managed from abroad, an Estonian contact person. Companies pay no tax on retained profit and 22% on distributions; VAT is 24% above €40,000 of supplies a year. For US owners, profit taxed at 0% can be taxed in the US each year under the NCTI rules.
Estonian company: key facts
Last verified 28 September 2026| Usual company type | OÜ (private limited company); minimum capital €0.01, paid in at founding# Source: Business Register (RIK): establishing a private limited company |
|---|---|
| Registration | State fee €265; usually registered within 1–2 working days; no notary through the portal# Source: Business Register (RIK): establishing a private limited company · e-Residency: costs and fees · e-Residency: official site and dashboard |
| Address and contact person | Estonian address needed; a company managed from abroad must name an Estonian contact person (about €200–400 a year via a provider)# Source: Business Register (RIK): establishing a private limited company · Grant Thornton Estonia: companies managed from abroad need a contact person · e-Residency: costs and fees |
| Corporate tax | 0% on retained profit; 22% on distributions (22/78 of the net dividend) since 2025 — unchanged in 2026# Source: Tax and Customs Board: taxation of dividends · Tax and Customs Board: tax rates |
| 2026 tax changes | Planned 2% profit tax and rise to 24% income tax were cancelled; flat €700/month tax-free allowance from 2026# Source: Grant Thornton Estonia: tax changes in force in 2026 · Estonian Chamber of Commerce: security tax abolished · Tax and Customs Board: tax rates |
| Dividend withholding | None on regular dividends to non-resident individuals; US treaty caps 5% / 15%# Source: Tax and Customs Board: taxation of dividends · IRS: US–Estonia income tax treaty |
| US tax treaty | Signed 1998, in force 2000; saving clause lets the US tax its citizens# Source: IRS: Estonia tax treaty documents · IRS: US–Estonia income tax treaty |
| VAT | 24% since 1 July 2025 (13% and 9% reduced); registration above €40,000 from the start of the calendar year# Source: Tax and Customs Board: tax rates · Tax and Customs Board: tax liabilities of companies of non-residents and e-residents |
| Tax returns | VAT return monthly by the 20th; payroll/dividend return (TSD) by the 10th after a payment# Source: Tax and Customs Board: filing VAT returns · Tax and Customs Board: submitting form TSD |
| Annual report | Within 6 months of year-end (30 June)# Source: RIK: annual report |
| Audit | Required above two of €5M revenue, €2.5M assets, 50 staff (review above €2M, €1M, 24)# Source: PwC Estonia: audit and review thresholds |
| Beneficial owners | Over 25%; updated on change and confirmed with each annual report# Source: RIK: beneficial owners |
| US anti-deferral tax | GILTI renamed NCTI from 2026; Estonia's 0% on retained profit is below the 18.9% high-tax threshold# Source: Congress.gov: One Big Beautiful Bill Act (P.L. 119-21) · eCFR: 26 CFR 1.951A-2 (high-tax exclusion) |
| Management from the US | Running the company from the US can create a US permanent establishment# Source: Tax and Customs Board: tax liabilities of companies of non-residents and e-residents |
Not American?
Canadians, Australians, Brits and other non-EU citizens: the same rules apply
Estonian company law is the same for every foreign founder, so Canadians, Australians, New Zealanders and Brits register an OÜ exactly as described here. Only a few points differ:
- Canada
- Australia
- New Zealand
- United Kingdom
- Japan
- South Korea
- + other visa-free countries
| Living in Estonia | A company does not give you residence. Non-EU founders who want to live in Estonia need a visa or permit, such as the startup route or a business permit. |
|---|---|
| Home-country tax | US citizens are taxed on worldwide income and have extra filings (Form 5471, FBAR, NCTI). Other nationals usually aren't taxed this way. |
| Tax treaty with Estonia | Estonia has income tax treaties with the US and many other countries, including Canada and the UK. |
| Documents from abroad | Need an apostille; the US, Canada (since 11 Jan 2024), the UK, Australia and NZ issue them.Source: HCCH: Apostille Convention status table |
At a Glance
Estonian Company Formation in Numbers
Why Estonia
Why Americans Register Companies in Estonia
Estonia's company system is digital from start to finish: you found the company online, sign documents digitally and file reports through the same portal. With e-Residency, founders who don't live in Estonia can use it too — about 44,000 companies have been founded by e-residents.
The distribution-based tax system — no corporate tax until profit is paid out — suits businesses that reinvest. For US owners, though, US anti-deferral rules often reduce that benefit, so plan the US side first.
Business Structures
Which Entity Type Is Right for You?
The OÜ — Estonia's private limited company — is the usual choice for foreign founders and e-residents.
Private Limited Company
OÜ — osaühing
The standard choice for small and medium businesses and e-residents. Minimum capital €0.01, paid in at founding (up to €50,000 the board confirms payment). No Estonian residence needed for board members, but a company managed from abroad must name an Estonian contact person.
- Min. capital
- €0.01
- Board
- 1+ member, any residence
- Liability
- Limited to capital
Public Limited Company
AS — aktsiaselts
For larger companies, outside investors or a listing. Needs a supervisory board.
- Min. capital
- €25,000
- Governance
- Board + supervisory board
Sole Proprietor
FIE — füüsilisest isikust ettevõtja
Unlimited personal liability and must be based in Estonia — generally not available to e-residents living abroad.
- Min. capital
- None
- Liability
- Unlimited
Branch of a Foreign Company
Filiaal
A branch of your US company — not a separate legal entity, so the parent is liable.
- Liability
- Parent company
Tax Environment
Estonia's Distribution-Based Corporate Tax
Estonian companies pay no corporate tax on profit they keep or reinvest. When profit is distributed — as dividends, gifts, non-business expenses or hidden distributions — the company pays 22% of the gross amount, which is 22/78 (about 28.2%) of the net dividend. The planned 2% profit tax and the rise to 24% in 2026 were both cancelled.
The US–Estonia treaty was signed in 1998 and has applied since 2000. Estonia does not withhold tax on regular dividends paid to non-resident individuals. VAT returns are due monthly by the 20th once registered; the payroll and dividend return (form TSD) is due by the 10th of the month after a payment.
US citizens and Green Card holders are taxed on worldwide income. Owning an Estonian OÜ usually means Form 5471 and an FBAR if your foreign accounts exceed $10,000 in total. From tax years starting in 2026, GILTI has been renamed net CFC tested income (NCTI). Estonia's 0% tax on retained profit is below the 18.9% high-tax threshold, so undistributed profit can be taxed in the US each year. A single owner can elect for the OÜ to be treated as a disregarded entity (Form 8832). The treaty's saving clause lets the US tax its citizens as if the treaty did not exist. Consult a US international tax adviser first.
Step-by-Step Process
How to Register a Company in Estonia
An OÜ is registered online through the Business Register portal. Filing takes minutes; the registrar usually decides within 1–2 working days. No notary is needed on the portal route.
Get a digital ID 3–8 weeks
Every founder and board member signs with an Estonian ID card, e-Residency card, Mobile-ID or Smart-ID. Americans usually apply for e-Residency (€150, 3–8 weeks, pick-up in Washington, D.C.).
Plan the US tax side Before you file
Decide with a US adviser how the company will be treated for US tax and how NCTI, Form 5471 and FBAR apply.
Choose a name Optional
The name must be distinct and end in "OÜ". You can reserve it for up to 6 months (€150), but it is optional.
Arrange an address and contact person Service provider
Use an Estonian address; if the board manages the company from abroad, name an Estonian contact person. Service providers offer both — about €200–400 a year (e-Residency estimate).
File on the Business Register portal €265
Fill in the articles (standard ones are available), pay the €265 state fee and pay in the capital. The registrar usually decides within 1–2 working days.
Open a bank or payment account Plan extra time
Banking is the hardest step. LHV is the bank most used by e-residents; EU payment institutions such as Wise and Revolut Business decide case by case.
Register for VAT (if needed) Post-registration
Register with the Tax and Customs Board once taxable supplies exceed €40,000 in a calendar year, or earlier voluntarily.
Want to run the company from Estonia? A company does not give you residence — see our startup guide for the startup visa and business permits.
Costs & Fees
What Does It Cost to Register a Company in Estonia?
| Cost item | Notes | Amount |
|---|---|---|
| e-Residency | Digital ID for founders without an Estonian ID; valid 5 years. | €150 |
| Registration fee | OÜ registered through the portal. | €265 |
| Share capital | Legal minimum, paid in at founding. | from €0.01 |
| Name reservation (optional) | Up to 6 months. | €150 |
| Address and contact person | Through a service provider (estimate). | about €200–400 a year |
| Accounting | Bookkeeping, VAT and the annual report (estimate). | from about €50 a month |
State fees from the Business Register and e-Residency; service costs are e-Residency estimates. Source: RIK: establishing an OÜ · e-Residency: costs and fees
Ongoing Obligations
Post-Registration Requirements
Annual report
File within 6 months of year-end (30 June for calendar-year companies), even if the company made no distributions. Late filing leads to fines and eventually deletion from the register.
Board and contact person
An OÜ needs at least one board member, who can live anywhere. A company managed from abroad must keep an Estonian contact person.
Tax returns
VAT returns monthly by the 20th once registered (even with no transactions); form TSD by the 10th after any salary, board fee or dividend. There is no quarterly option.
Audit
Required only if two of these are exceeded — €5 million revenue, €2.5 million assets, 50 employees; a lighter review applies above €2 million, €1 million and 24 employees.
Beneficial owners
Record owners with more than 25%, update changes promptly and confirm them each year with the annual report.
Expert Notes
What Americans Should Know Before Registering in Estonia
NCTI can cancel the 0% advantage
Retained profit taxed at 0% in Estonia is below the US high-tax threshold, so it can be taxed in the US each year. Distribution years at 22% may pass the test for that year only. Plan with a US adviser.
e-Residency is not residence
It gives no right to live or work in Estonia or the EU. To relocate, you need a visa or residence permit.
Banking takes the longest
e-Residency does not guarantee a bank account. Prepare clear documents on ownership, clients and cash flow.
Where you manage the company matters
Running an Estonian company from the US can create a US permanent establishment, and individual owners usually cannot credit the Estonian distribution tax at home.
Real activity helps
Banks and the tax authority look at substance — real clients, contracts and activity make VAT registration and banking easier.
An Estonian company is right for you if…
- You want an EU company you can found and run entirely online
- You plan to reinvest profit and have checked the US NCTI position
- You serve European clients and want to invoice from an EU entity
- You can budget for a contact person, accounting and the annual report
- You understand the company gives you no right to live in Estonia
FAQ
Frequently asked questions
What is the minimum share capital for an Estonian OÜ?
€0.01 per shareholder since February 2023. The capital must be paid in at founding; there is no longer an option to defer payment.
How much does it cost to register a company in Estonia?
The state fee is €265. Add €150 for e-Residency if you need a digital ID, about €200–400 a year for a contact person and address, and accounting from about €50 a month.
How long does registration take?
Filing takes minutes; the Business Register usually decides within 1–2 working days. Getting e-Residency first takes 3–8 weeks plus card delivery.
What is Estonia's corporate tax rate in 2026?
0% on retained profit and 22% on distributed profit (22/78 of the net amount). The planned 2% profit tax and the rise to 24% were cancelled.
Do I need to live in Estonia to run an OÜ?
No. Board members can live anywhere, but a company managed from abroad needs an Estonian address and contact person.
Estonia
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