- Benefits of companies in Estonia:
- no income tax; absence of VAT on some operations;
- lack of obligations for regular payment of wages; travel can be charged to the Estonian company;
- there is a well-developed banking system in Estonia; the Estonian consulate issues long-term visas to directors and owners of companies;
- an opportunity to obtain a residence permit, permanent residence, citizenship in Estonia.
Estonia is a state in northeastern Europe. This country currently offers one of the most favorable taxation systems.
Estonian companies can be effectively applied in tax planning.
Types of companies registered in Estonia:
- Joint Stock Company (AS);
- Limited Liability Company (OÜ).
The activities of companies are regulated by the Commercial Code of 1
Requirements for the company:
- The minimum number of directors is one;
- There are no directors' residency requirements;
- Board of directors at least 3 people;
- Local registered secretary and office required;
- The minimum number of shareholders is one;
- Nominee shareholders and directors are permitted;
- Legal address - must be in Estonia;
- Tax accounting and auditing - Estonian companies are required to maintain financial statements, which are certified by an auditor if the criteria are met;
- share capital EUR 2,500 for OÜ and EUR 25,000 for AS
- Type of shares - registered with par value;
- Bearer shares are not permitted.
When using nominee Shareholders and Directors, the true owner
company cannot be installed.
- Income tax (corporate tax) - 0% rate (applicable to profits that are received but not distributed);
- Standard income tax on dividends - 20%;
From 2019, a lower income tax rate may apply on dividend distribution - 14%
- Applies to distributed profit for the calendar year in an amount less than or equal to the average distributed profit for the previous three years. Anything over and above is subject to a 20% rate.
- In 2019, the reduced tax rate will be applied to 1/3 of the distributed profit for 2018. In 2020, to 1/3 of the distributed profit for 2018 and 2019
- Dividends received from subsidiaries and profits from foreign establishments will not be included in the calculation of the reduced tax rate.
- Any dividends paid to individuals (including non-resident individuals) from the profits of an Estonian company at a reduced tax rate are subject to an additional income tax of 7%. For non-residents, the corporate income tax rate in Estonia is determined in accordance with the existing tax treaty. Accordingly, this change will not reduce the tax burden on shareholders.
- VAT (VAT) - 20%. When exporting goods and services from Estonia - 0%;
- Personal income tax - 20%;
- Social tax - 33% (withheld from wages).
- VAT reports are submitted to the Estonian Tax Board on a monthly basis;
- Annual financial statements are submitted 6 months after the end of the financial year.