The most common form of legal entity in Estonia is a limited liability company (Osaühing – OÜ) which is suitable for most kinds of activities. The advantage of a limited company is that the shareholders are responsible for the obligations of the company only for the value of shares they hold.
An Estonian company name can be in any language but must be unique. A registered name can be changed upon request and certain names are prohibited by the Estonian Company Law. Once you confirm that your chosen name is available in the Commercial register, you will be provided with a Certificate of Name Reservation.
MEMORANDUM AND ARTICLES OF ASSOCIATION
A company is incorporated in Estonia by an application submitted to the Commercial register. The Memorandum and the Articles of Association must be lodged with the Registrar. The memorandum specifies the activities in which the company may engage and the Articles of Association specifies the rules governing the internal management of the company.
Shareholders can be legal or physical persons of any nationality and residence. The minimum number of shareholders is one. No upper limit to the number of shareholders.
The minimum share capital required to establish a limited liability company is EUR 2500 which shall be contributed by shareholders in cash or in kind before a company registration with the Commercial register. The minimum nominal value of a share is EUR 1.
It is possible to establish a company without prior payment of contribution since January 2011. However, the share capital mentioned in the Articles of Association should be paid at a later stage at a specific period of time. OÜ without contribution is not a new form of Limited Liability Company and the regulation for general OÜ will apply. The Commercial Register will make a notice in the company’s official extract that the company is established without contribution.
Requirements for LLC without contribution:
1. Shareholders may be natural persons only.
2. Articles of Association shall include the term during which the share capital is covered.
3. Until the contribution is made – the shareholders are personally liable for the company’s activities.
4. Until the contribution is made – it is not possible to distribute dividends.
5. The maximum share capital of an OÜ without contribution is 25 000 EUR.
DIRECTORS AND SECRETARY
Only physical persons can be appointed as directors of the company and directors do not have to be shareholders. At least half of the management board of the company must be residents of Estonia or any other EEA member country or Switzerland.
There is no requirement to appoint a local secretary.
Every Company must have a registered office and address in Estonia which should be notified at the Commercial Register.
Board meetings can be held anywhere as per the convenience of the board.The articles of association or a resolution of the management board or the supervisory board may prescribe that the meeting shall be transmitted in full or in part in real time via the Internet, using two-way communication or any other technically secure manner.
It is usually takes 1 – 2 weeks.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
- Provision of Registered address and registered agent.
- Annual Government Fees.