FAQ

1. Can an offshore company own an Estonian company?
Yes, any offshore company can own an Estonian company.

2. What is the share capital of an Estonian company? Should it be paid for in full?
The minimal share capital of an Estonian company is 2500 EUR. The share capital must be paid for before entry in the Estonian Commercial Register. The share capital must be paid for by monetary contribution (in cash or by transfer to the bank account of a new company) or by non-monetary contribution (with property).

3. Is it possible to purchase a pre-formed Estonian company?
Yes, it is.

4. Which documents legally support the existence of an Estonian company?
A copy of B-card. It is an extract from the Estonian Commercial Register and contains the following information about an Estonian company:
-the date of approval of the articles of association
-the business name
-the registry code
-the dates of amendments of the articles of association
-the seat
-the area of activity
-the members of the management board (or the liquidators)
-the share capital
-the class of company
-the reference to later entry
-the beginning and the end of the financial year
-the owner
The articles of association. It is an extract from the Commercial Code of Estonia that includes the basic articles prescribing conducting a meeting of the shareholders, voting of the shareholders, resolution of the shareholders, etc. The articles of association also contain the information about the share capital of a company.

5. Should an Estonian company have its own seal?
No, in Estonia there is no law concerning the seal. However, an Estonian company may make any seal that is not subject to any registration. The use of a seal by an Estonian company does not have any legal effects.

6. What activity may an Estonian company pursue?
An Estonian company may pursue any commercial activity that is not prohibited by law. If an activity that a company is intending to pursue requires a permission (a license), then that activity must be specified in the articles of association and in the B-card.

7. What is the body of management of an Estonian company?
The body of management of an Estonian company is the management board. The management board is elected by the shareholders and acts pursuant to the Commercial Code of Estonia and the articles of association of a company.

8. Which document confirms the powers of a Management Board member of an Estonian enterprise?
Such a document is the B-card (an official extract from the Commercial Register of Estonian Enterprises). The B-card contains data on the composition of the Management Board of an Estonian enterprise (given name, surname, date of birth, personal identification code, and residence). Other than that, the powers of the Management Board are specified in the Statutes of an Estonian enterprise.

9. May a non-resident be the sole member of the management board of an Estonian company?
Yes.

10. How many directors should an Estonian company have?
An Estonian company may have no director at all. Appointment to the director’s office is executed via a resolution of the management board and the activity of a director is laid down in the contract of employment.

11. What is the method of registration of the ownership of an Estonian company?
The ownership of an Estonian company is registered via entering into a share purchase and sale contract. The share purchase and sale contract is signed in the presence of an Estonian notary. The share purchase and sale contract is written on the base of the Law of Obligations Act of Estonia.

12. Is the physical presence of a shareholder in the office of an Estonian notary required to certify the purchase and sale transaction of an Estonian company?
No, it is not, a shareholder may prepare a notarised and duly legalised letter of authority of a representative in order to execute the share purchase and sale transaction.

13. Is the Estonian Commercial Register accessible to public? What information is deposed in the Commercial register?
Yes, the Commercial Register is accessible to public. The following data are deposed in the Commercial Register:
-the founders of a company;
-information about the members of the management board;
-information about the shareholders;
-the area of activity;
-the financial reports of the past years;
-the documents that evidence all the modifications of a company.

14. What is the method of international legalisation of documents of an Estonian company?
Estonia joined the Hague convention of 1961, therefore notarised documents of an Estonian company may be legalised by the Apostille. If Estonia entered into a mutual legal assistance treaty with another country (Russia, Ukraine), it is sufficient that a documents are certified by an Estonian notary. Estonian notaries may certify the documents in English and Russian languages.

15. May an Estonian company open a bank account in another country except Estonia?
Yes, it may open a bank account in any country. No permissions and no registration of information about additional bank accounts are required.

16. What kinds of reports and where shall an Estonian enterprise submit?
An Estonian enterprise shall submit reports:

A. To Tax Board of Estonia,
if an Estonian enterprise is value added tax registered, i.e. has an individual VAT NUMBER (In Estonia it is called - KMKR), then the Estonian enterprise is obliged to submit monthly reports to the Tax Board: by the 10th date – on income and on social tax and by the 20th date,- on value added tax.
If an Estonian enterprise has a turnover on the territory of the EU, then monthly, by the 20th date, it shall submit a report on the turnover of the goods within the community.
If an Estonian enterprise is not value added tax registered, and does not have employees, then it may not report monthly.

B. To Commercial Register of Estonia.
Annually by 30 June an Estonian enterprise is obliged to submit a Financial Report in the specified form about its activities in the preceding financial year (from 01.01 to 31.12). The preceding Financial Report is submitted to the Commercial Register of Estonia, it is not necessary to submit the financial report to the Tax Board.

C. To Statistical Office.
Reports are submitted once every quarter, but not by all Estonian Enterprises, but by those selected by the Statistical Office on the basis of their criteria.

D. To Central Bank of Estonia.
Reports are submitted once every quarter, but not by all Estonian Enterprises, but by those selected by the Central Bank on the basis of their criteria, if the enterprises have foreign economical activities.

17. Is an Estonian enterprise obliged to be audited?
A. An Estonian enterprise is obliged to be audited (pursuant to Accounting Act, Chapter 3, § 14(3)), if “at the balance sheet date of the accounting year the accounting entity exceeds the limits of at least two of the three following criteria: sales revenue (net turnover), in the case of a company, or income, in the case of other accounting entities: 6 millions estonian kroons; balance sheet total: 3 million estonian kroons; number of employees: 5”.

B. An Estonian enterprise is obliged to be audited, if the Authorized Capital of the enterprise exceeds 25000 EUR.

© Estoest OÜ 2008