According to the Estonian Commercial Code there are six forms of business entities in the Republic of Estonia. Foreign investors have equal rights and obligations with local entrepreneurs. All foreign investors may establish a company in the Republic of Estonia in the same way as local investors; no special restrictions are made.
Prior to establishing an enterprise it is essential to assess and choose the type of an undertaking which is the most appropriate for you in legal and economic terms. This choice will affect not only the amount of necessary equity capital, but also the legal status of the enterprise and other business related issues.
The most popular types of legal entity being set up by foreigners in Estonia are the so called private limited liability company (OÜ) and the public limited liability company (AS).
private limited liability company (OÜ)
public limited liability company (AS) or joint stock company
general partnership (TÜ) and limited partnership (UÜ)
sole proprietorship (FIE)
branch of foreign company
It is mandatory to register the company with the Commercial Register of Estonia in order to commence business and operate in Estonia.
Representation
Legal Baltic is capable to draft all the necessary incorporation documents and represent your interests before the Commercial Register.
Private limited liability company (OÜ)
Equity capital
– when establishing a private limited liability company, the minimum share capital is EUR 2500. The share capital contribution may be done by three different ways:
monetary contribution (100% in cash). Disadvantage is your “money frozen” for 1 week.
100% non-monetary contribution. A non-monetary contribution may be a whatsoever property or pecuniary right appraisable in money and transferable to the public limited company to which a claim may be subjected. Appraisal by an auditor is required.
more than one-half (EUR 1251) in cash and the remaining (EUR 1249) by a non-monetary contribution. In such a case no auditor’s appraisal is required.
The private limited liability company in Estonia may not sell its shares to public.
Founder – one or more persons can be the founder/s or shareholder/s of a private limited liability company and they can be both natural persons and legal entities. The founder may be a resident or non-resident of the Republic of Estonia.
Incorporation documents shall be signed before a notary. All founders and Board members are required to be present.
Status – a private limited liability company is considered a legal entity.
Liability – the founder/s or shareholder/s of a private limited liability company is not personally liable for the obligations of the company. The shareholder/s of company is liable for the company's debts and obligations to the extent of each one's contribution. A private limited liability company is liable for the performance of its obligations with all of its assets.
Management body – a company must have a management board which is a directing body of the private limited company that represents and directs the private limited company.
The board consists of one or more directors; directors can be only natural persons. A member of the management board need not be a shareholder. At least 50% of board members of the management board must be residents of the European Union, Switzerland, Norway, Iceland or Liechtenstein.
A private limited company must have a supervisory board, if the share capital is greater than EUR 25,000 the management board has less than three members, or if prescribed by the articles of association of the private limited company.
