Frequently Asked Questions

The private limited company (OÜ — osaühing) is the standard choice for online businesses, SaaS founders, and platform operators. It requires only one shareholder and one director — both can be non-residents — offers full limited liability, and can be registered entirely online.

There is no requirement to be Estonian or to physically be in Estonia to form or run an OÜ.

With an Estonian e-Residency digital ID, registration takes as little as 1 business day. Using a power of attorney (for those without e-Residency) takes 1–2 weeks. A ready-made shelf company is available from 1 business day.

As of February 2023, the minimum share capital is €0.01 per share — meaning a company can be registered with a nominal contribution. The contribution must be paid at the time of registration; deferred payment is no longer available for companies formed after that date. Read more about this change →

Yes — every Estonian company must have either an Estonian legal address or a licensed Estonian contact person on record. Most non-resident founders use a virtual office service from a licensed provider, which satisfies the legal address requirement.

eFinance provides a registered business address and contact person service in Tallinn as part of its standard onboarding.

Yes. Through the e-Residency programme, a non-EU founder can apply for a digital identity card, register a company online, sign all documents digitally, and operate the business entirely remotely. The only in-person step is collecting the e-Residency card at an Estonian embassy or police bureau in your country — there is no requirement to visit Estonia itself.

Alternatively, eFinance can act on your behalf via power of attorney, requiring no e-Residency at all.

e-Residency is a government-issued digital identity that grants secure online authentication and legally valid electronic signatures recognised across the EU. It does not confer citizenship, physical residency, a work permit, or any visa benefit. It is purely a business-administration tool for managing an Estonian company remotely. Our full guide to e-Residency →

Estonia taxes corporate profits only when they are distributed as dividends — retained and reinvested profits face 0% corporate income tax. When dividends are paid, the company applies a 22/78 gross-up rate (effectively 22% on the grossed-up amount).

This deferred-tax model makes Estonia particularly efficient for reinvestment-driven digital businesses and SaaS companies that want to grow before extracting profits.

The company pays corporate income tax (22/78) before distributing dividends — no additional Estonian withholding tax is levied on the shareholder personally. However, your country of personal tax residence may tax the dividend income under its own rules. You should verify your local obligations with a tax adviser in your home country. Deep dive: dividends & Estonian tax →

No. An Estonian company is a resident taxpayer in Estonia, but your personal tax residency is determined by where you live — not where your company is registered. e-Residency does not change your personal tax status.

Estonia taxes companies registered under Estonian law as residents regardless of where management is exercised. However, the country where you actually manage the company may also claim the right to tax it as a local resident under its domestic rules — creating potential dual-residency exposure.

Running a business through an Estonian OÜ while managing it from a high-tax country without professional advice on substance can create tax risks. eFinance advises on structure during onboarding.

Estonia's standard VAT rate is 24% (as of 1 July 2025). The domestic VAT registration threshold is €40,000 in annual taxable turnover. Voluntary registration is available from day one, which allows recovery of input VAT on business expenses.

Yes. Digital services (including SaaS subscriptions, access to platforms, and online content) supplied to private consumers (B2C) are taxed in the customer's country of residence, not where your company is registered.

Once your total B2C digital sales to EU consumers across all member states exceed €10,000 per year, you must register for the EU VAT One Stop Shop (OSS) and file a single quarterly return covering all EU countries — through the Estonian Tax and Customs Board (e-MTA). What is OSS and how does it work? →

Total across the EU — not per country. The €10,000 threshold covers all cross-border B2C digital services and distance sales to EU consumers combined. Once exceeded, OSS registration is required from the first day of the following month.

Yes. A non-EU company can register for the Non-Union OSS scheme in Estonia (or any EU member state of its choice). This allows the company to file a single quarterly EU-wide VAT return through the Estonian e-MTA — instead of registering for VAT separately in every EU country where customers are located.

OSS returns are filed quarterly. Payment is due by the end of the month following the reporting quarter: Q1 by 30 April · Q2 by 31 July · Q3 by 31 October · Q4 by 31 January.

Yes. Software-as-a-Service, subscription platforms, online marketplaces, digital content, and all electronically supplied services are classified as digital services under EU VAT rules. They are always taxed in the customer's country for B2C sales — regardless of where the supplier is based.

For B2B sales within the EU, the reverse-charge mechanism applies — your EU business customers self-account for VAT in their own country. You do not charge VAT on those invoices (provided you hold a valid EU VAT number for the customer). OSS is only required for B2C transactions.

Traditional Estonian banks (LHV, Swedbank, SEB) typically require either a personal visit or a demonstrable connection to Estonia. However, EU-licensed fintech accounts — including Wise Business and Revolut Business — can be opened entirely online and accept Estonian OÜs as customers.

Most online-business founders use a fintech account for day-to-day operations and, once there is business history, apply to LHV for a traditional account. eFinance provides bank account opening assistance as part of its services. Guides: Wise · LHV.

Every Estonian company must file an annual report within six months of its financial year-end — for calendar-year companies, the deadline is 30 June. The report must be prepared to Estonian GAAP standards and filed in XBRL format through the e-Business Register.

Monthly VAT declarations are required if the company is VAT-registered. KYC documents must be kept up to date with your licensed service provider. There is no requirement to hold board meetings in Estonia. Why the annual report matters →

Estonian law does not require a locally resident accountant, but the annual report must comply with Estonian GAAP and be filed in XBRL format. In practice, most non-resident founders use a licensed Estonian accounting service that handles bookkeeping, VAT filings, and the annual report entirely remotely.

Most software platforms and marketplaces that facilitate transactions without holding customer funds do not require a financial licence. However, if your platform holds client funds, processes payments, or issues e-money, it may require a Payment Institution (PI) or Electronic Money Institution (EMI) licence from Estonia's Financial Supervision Authority (Finantsinspektsioon).

These licences passport across all EU member states and require substance, capital (from €20,000 for a limited PI licence), and a 3–6 month application process. eFinance provides licensing support and can advise on whether a licence is required for your specific model.

Yes. An Estonian OÜ is an EU-registered company — contracts are governed by EU law, invoices carry an EU VAT number, and the business can access EU payment rails and banking infrastructure. The deferred corporate tax model is well suited to subscription businesses that reinvest revenue into growth before distributing profits.

Estonia is one of the few EU jurisdictions where the entire compliance stack — registration, VAT, annual reporting, contract signing — can be managed fully remotely, with no requirement to visit Estonia. Estonia for SaaS: the full picture →