Best Way to Start a Company Online in EU | e-ResidencyCompany Registration & Formation in Estonia for Non-Residents

Company Registration in Estonia

Estonia is the first place to offer e-Residency so that anyone can base their business and finances in the country. As an e-resident, you can get  full access to Estonia’s advanced digital infrastructure and the same rights in business as Estonian citizens. As an E-Resident, you can start a business online completely remotely from Pakistan or anywhere from the world.

When you’re starting the company the first place you want to visit is Estonia’s Company Registration Portal.

Register Company in Estonia

When you’re looking up the name of your business, you will want to make sure that you’re only using latin letters without special characters.
When you have the business name then go to register your company and there you’ll need three things;

● Company Registration State Fee which is around 190 euros.
● Details about the company’s structure and area of the business.
● Address and contact person in Estonia.

There are virtual offices and service providers in Estonia so while choosing a service provider you must keep in mind that you don’t need to give up any control over your business and all the management and decisions are made by you and you retain those rights. Although it is not mandatory, we advise you to have an accountant. You may act like an accountant but in our opinion you must hire one who is familiar with the Estonia accounting, taxation and legal system to be in compliance with all the local laws.

Most of the businessmen around the world choose Estonia to set up their business because it is much less expensive to run their business.The most common type of business entity in Estonia for non-residents is private limited company.

When you’re doing this process you will need to state your Articles of Association. There are several questions you’ll be asked while registering the company such as;

● What will your initial area of business activity be?
● Who are the shareholders?
● How large is the partner’s share capital contribution?
● What is the business address?
● How will the management take place?

You’ll ask for the business area activity because unlike in the other jurisdiction area, Estonia tries to be hassle free and understanding of new business entities. If you want to change business areas or activities later, then you don’t need to register a new company.

The minimum share capital requirement for a company is 2500 Euros and this is because of a matter of gaining trust of the Estonian government. Let it be clear that although 2500 Euros is a sort of high investment, it is not a government fee rather a share capital requirement for your company which means your company can use this amount for its expenses and other commercial activities.

E-Residency Tax Basics:

To deal with the complexities of international taxation as an e resident, you can now build a global company even more easily than ever before even if you run it by yourself. However this also means that you need to understand international taxation especially if you live globally. There are too many types of taxation to be aware of that are often confused in conversations among global entrepreneurs.

First you need to be aware that you and your company are separate legal entities. So corporate taxes are where your company pays taxes and personal taxes where you individually pay taxes. In both cases, E-residency doesn’t directly determine where either of these taxes needs to be paid.
There are international tax rules in place to determine where you will pay your taxes and this applies to everyone, regardless of where you register your company. Determining your personal tax residency tends to be quite straightforward for most residents because even if you’re traveling you always

have a physical address somewhere and you always have a country where you are from and where you want to recover for many things such as health insurance etc.

Determining your corporate tax residency can sometimes be more complex though. It’s a very general rule, your company has to pay taxes where it’s permanently managed or where its primary generates value.

No country can decide by itself which companies owe it taxes. So it’s your company’s responsibility to pay taxes where they are owed. If you clearly work for your company and manage it specifically in one country, then it is where its permanent establishment might be and this is where you might pay your corporate taxes.

If a company is established in Estonia through E-Residency but if a second country can fairly claim these taxes are owed to them, then your own company is going to pay taxes to that second country and not Estonia.

Estonia already has 57 tax agreements in place to ensure the process is smooth. If that second country doesn’t have a tax agreement in place then this process can be a bit more of a hassle but the principle remains the same. If you’re traveling or if you have multiple co-founders in multiple countries then there are many more considerations.
And it is not always easy to manage your tax obligations by yourself.
This issue affects everyone doing business across borders, whether they’re a resident or not.

However E-Residency can be an important part of the solution to this global challenge by providing more transparency in how companies are operating We always truly recommend that if you have any doubt about your tax obligations then you must speak to your own tax advisor or contact us to determine your tax obligations. It’s difficult to give general advice because everyone’s circumstances are different and are based on the business decisions that you may make.

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Estonian Company Registration Services

Step 1 : Become an e-Resident

Apply online, pay a state fee (€100-120) and choose a pickup location for your digital ID.

Step 2 : Choose Service Provider

Obtaining an Estonian contact person and legal address costs around €30-150 monthly average depending on the services.

Step 3 : Incorporation of Company

Register your company online at e-Business Registry. Pay state fee for company registration which shall cost around €190.

Step 4 : Apply for a Business Bank Account

Find a fintech partner on an online marketplace to cover your company banking needs.

Step 5 : Apply for VAT

After incorporation of company and bank account you need to register for VAT and file income tax returns as per Estonian tax laws.

Frequently Asked Questions

Can a company be registered in Estonia from Pakistan?

By virtue of the E-Residency process, every citizen throughout the world can incorporate private limited companies in Estonia subject to the compliance of the company laws.

How long does it take to register a company in Estonia?

If you are applying from Pakistan it may take 10 to 15 working days to register a company.

How to open a bank account in Estonia?

It can be quite costly for non-residents to open a bank account in Estonia however a non-resident can open a business bank account with the name of a registered company.

What do I need to open a business bank account in Estonia?

● Passport or EU national ID card
● Proof of business address or Estonian e-residency
● Company details and other documents

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