5 steps how to start a company online

Establish an EU company digitally, from anywhere in the world without the need to travel. Follow the easy step-by-step instructions in this article. 

If you are not yet, learn how to become an e-resident, so you could register your company entirely online.

 

In general, this is how the process looks like

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1. Deciding on the name of your company

Bear in mind that you can only use Latin letters when coming up with a name, no special characters are allowed, but the Estonian alphabet has some curious letters such as „ä“, „ö“, „õ“ and „ü“ which you are more than welcome to use. Also, your business name must be distinguishable and unique, meaning that there can be no overlap with already existing companies. If you want to create a homepage for your company, then it is recommended to check if the desirable domain name is available.

You can also check if your desired business name is available at E-Business Register.

2. Obtaining a legal address and a contact person located in Estonia

Your company needs to have an Estonian address. It is not allowed to register a P.O. box as an address. Also, while there is no requirement to have a local Director (management board member of the company), you need to appoint a local contact person. The contact person acts as a messenger and has to be available onsite if local authorities have a need to contact your company and cannot reach you in person. The contact person cannot make decisions nor take any commitments on behalf of your company. You will still be both the single owner, and the single management board member for that legal entity - with full control of the company. 

Choose a business service provider from our Marketplace.

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Now you are ready to go online and either submit the application for registration of your business directly to the Company Registration Portal or through an API on your business service provider's website. 

If you start from Company Registration Portal: 

1. Log in with your digital ID
2. Choose "Submission of application" from the menu
3. Select "Registration of a new enterprise"
4. If you chose an OÜ business structure, select "Private limited company"

Submission of the company registration application consists of four steps: preparation, signing, payment of the state fee and submission. 

3. Making a monetary share capital contribution

The suggested solution would be to postpone the payment and establish a company without making a share capital contribution during the establishment process. This is because, in principle, the share capital contribution can be made either by transferring funds to the company’s start-up bank account or to the designated depository bank account of the Company Registrar. In practice, however, using one of the two alternatives is more suited for Estonian physical residents, who already have a relationship with an Estonian bank. You need to also choose a time on the application there stating when you will make the payment in the future. 

4. Choosing the main area of activity

(based on the official classification „The Estonian Classification of Economic Activities“ or „EMTAK“).

This basically means that you have to select an area of activity from a specified list, which best corresponds with your expected source of income for the first business year. It is perfectly acceptable to be active in other areas as well and when circumstances change, you are able to change your main area of activity with relative ease. Be aware that some areas are subject to special requirements and require specific licenses. You can read more about it here

5. Completing the registration!

Once you have successfully completed the previous steps and filled the application in the Company Registration Portal, you can submit it for official review.

The state fee for establishing an online is EUR 190, which can be paid alongside with the share capital contribution through the Company Registration portal during the submission of application. You can later indicate the paid state fee in accounting as a business expense and use the deposited share capital for your business activity. The review process usually takes around one business day, after which a notification is sent to you via e-mail.

The signing at the end of the submission needs to be done by all persons related to the company and it needs to be also signed by your business service provider (legal address and contact person service provider). Thanks to Estonia's e-services and secure digital ID, several people can sign the documents at the same time remotely.

After your company has been registered in the Company Register, the next important step would be to open a bank account for your , which would cover the company’s daily banking needs.

If you do not have a business banking account at a credit or payment institution in the European Economic Area, you will need an EU IBAN account. As an e-resident, you have three options:

1. Apply for a business bank account at an Estonian bank
2. Apply for a business payments account through a fintech company
3. Apply for a business bank account at a foreign bank

Alternative - using a Notary

Your company can only be registered online in the Company Registration Portal if all founders, board members etc. have an Estonian, Latvian or Belgian ID card, Estonian or Lithuanian mobile ID, or, Estonian e-Residency digital ID card and they are private persons.

If this is not possible or you are interested in registering a subsidiary, your company can also be registered using the services of a notary office in Estonia. This process is described in the State Portal. You can also refer to the Estonian Chamber of Notaries for more information.

Though registering a branch of a foreign company or a subsidiary initially requires a notary, it can then be managed entirely online with an e-Residency digital ID card once registered.

You may also need to: 

Learn more about accounting

Now you have a functioning company in Estonia through which you can start carrying out your business. But you can’t run a business in Estonia (or anywhere for that matter) without recording your transactions and keeping financial records. As your company is incorporated in Estonia, it is important that you understand the basics of Estonian accounting and legal requirements to comply with the local rules and regulations. This, of course, includes knowledge on the Estonian taxation system. It is up to you to decide whether you think you need assistance on the subject or not.

Apply for licenses

Based on your area of activity, you may need to meet special requirements or apply for an activity licence or submit a notice of economic activity. Your service provider may be able to advise, but otherwise, you can check the Business licenses article. 

If necessary, register an activity or apply for a license with the Register of Economic Activities.

Register for VAT

This is only necessary if you anticipate an annual taxable turnover of more than €40,000 due to business activity in Estonia. You can read more about this at our article, VAT registration

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