Why Foreign Founders Should Incorporate their Companies in Estonia


Estonia is a small country in northern Europe, and it has been ranked as the best place to do business by the World Bank for eight years running. Foreign founders who want to start a company should incorporate their companies in Estonia because of its advantageous tax rates and regulations. This article will explore what makes Estonia such an attractive choice for startups looking to make their mark on this world!

Key Benefits of Registering your Company In Estonia

  • Tax burden reduction. The main advantage of having a company registered in Estonia is a zero tax on undistributed profit. The tax on distributed profit is 20%. Please bear in mind that Estonia is not considered an offshore jurisdiction nor a tax haven so your Estonian company will be a reputable one. 
  • More opportunities for reinvestment. As you do not have to pay any tax on undistributed profit, you are going to have more money remaining for reinvestment into the company development. This will give your Estonian-domiciled company a serious competitive advantage. 
  • The possibility to work in the European market. Estonia is a member of the European Union. European people and companies are inclined to purchase products and services from European-based partners rather than from residents of other countries. 
  • Ease of doing business. You can acquire an electronic resident card in Estonia and this will give you an opportunity to control your company from any place in the world. All the contracts and other documents are signed electronically and the annual reporting is also submitted via electronic venues. Audit is mandatory only for large companies. 

Strategic Benefits For Foreign Founders

Having a business in Estonia will give your company an opportunity to conduct its affairs within the European Union. This is going to provide you with certain advantages when it comes to hiring employees, selling products and services etc. In addition, if you would like to expand your operations into other countries of Europe, this can be done quickly and easily from the locales of Estonia.

Estonia is a small country and it has one of the smallest populations in Europe, but its GDP per capita is quite high compared to other EU countries. This means that there are more opportunities for foreign founders who want to start their businesses here than elsewhere on the continent. The cost of living in Estonia is considerably lower than in the USA and Western Europe. Estonia is also a part of the Schengen Area so you can travel to other European countries without having any additional visas or permits.

Legal Benefits Of Registering Your Company In Estonia

You don’t have to worry about bureaucracy when you start your company in Estonia because it has an advanced system that streamlines all business operations. You can start your business online, make all necessary filings and receive all the permits without leaving home or office!

Estonia is an OECD member so it follows certain best practices when it comes to protecting investors’ rights as well as establishing a legal framework for businesses operating in this country. Estonia has been ranked by Forbes magazine as one of the five easiest countries to do business in.

Estonia is a very attractive choice of location for foreign founders who want to start their own companies and it has an advantageous tax rate that will enable them to keep more money within the company itself, reinvest into its future development without fear of facing heavy taxation. The benefits offered by Estonia are not available in many other countries so it will be a good idea to incorporate here!

Banking In Estonia

When you start your company in Estonia, there are certain advantages that you can get by having an Estonian bank account. First of all, banks operating in this country offer low-cost accounts and services for startups with transparent pricing policies. There is also a wide variety of banking services available and you can make payments to any country in the European Union.

e-Residency and Startup Visa

An e-Residency in Estonia will allow you to conduct all business affairs electronically and easily, without being physically present at the company’s headquarters. Moreover, many foreign founders find it difficult to obtain a visa that will allow them to start their businesses in other countries. However, Estonia offers both a Startup Visa and Residency Permit for a Startup Business which not only makes it easier to scale in the EU, but provides access to an entirely new talent ecosystem. Foreign founders can easily apply for the Startup Visa or Residency Permit by submitting their project to the Startup Committee.

Legal Aid At Your Fingertips: How To Incorporate Your Business As A Foreign Founder

Once you have made up your mind to incorporate in Estonia, LEGID can help you with all legal aspects. Our platform combines the power of AI-powered technology with legal aid for entrepreneurs all around the world. Using it is easy and hassle-free; simply