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Companies registration in Estonia

Estonia (est. Eesti), the official name - the Republic of Estonia (est. Eesti Vabariik) - a country located in Northern Europe, in the north-eastern coast of the Baltic Sea, bordering the Gulf of Finland and Gulf of Riga. In the east on the border with Russia (border length 294 km) to the south by Latvia (339 km). In the north the Gulf of Finland  passes the maritime border with Finland. In the north and west by the Baltic Sea. Estonia is a member of the European Union, the Euro zone, NATO and a participant in the Schengen agreement.

In Estonia foreign individuals or legal persons may register a corporation or limited liability company. If you own Estonian company and become its authorized signatory, you can open accounts not only in Estonian banks, but in other countries as well. Foreigners who acquire Estonian companies can freely purchase real and personal property, land. It also is an advantage of obtaining a residence permit on the basis of registration of the Estonian company. It is beneficial to establish the holding structure of the financial center in Estonia.

There are no limits imposed on legislative international bank payments; no currency control. In Estonian banks unlimited quantity cash can be stored in any currency and transferred locally and internationally.

The advantages of companies in Estonia:

·       no income tax;

·       no VAT on certain transactions;

·       no demand on the regular payment of wages;

·       travel expenses may be attributed to the Estonian company;

·       banking system is well developed in Estonia;

·       Consulate of Estonia provides long term visas to the directors and owners of companies;

·       the ability to obtain a residence permit, permanent residence, citizenship in Estonia;

Requirements for the companies:

·       minimum one director;

·       members of the Board of Directors must be at least 3 (one may be the Managing Director);

·       no requirements for director’s residency;

·       directors may be legal entities;

·       you must have local registered office and secretary;

·       must be minimum one shareholder;

·       nominee shareholders and directors are allowed;

·       legal address must be registered in Estonia;

·       company must  maintain taxation and audit records which must be approved by the auditor;

·       authorized capital is 2500 EUR.

Shares are registered - par value; Bearer shares are not permitted.

Taxation

Income tax (or corporate income tax) Corporate Tax - 0%, applicable to the benefits derived, but not distributed. This is a significant difference from the standard calculation of the tax system in most countries, which charge a certain percentage of the difference between revenues and expenditures of the company. Individuals and legal entities are not taxed on dividends. Developing business in Estonia may be great. You may refinance the profit, invest it in deposits, securities, equipment and real estate (there is no real estate tax and the tax rate to the ground is very low). The tax would have to be paid only at the time of profit distribution.

Incorporating your company in Estonia is an attractive option for international trading business. Goods and services purchased in the EU are not taxed (or taxed at a 0% rate). It is stated (or affirmed) in the declaration of tax from turnover. The same applies to the goods purchased outside the EU unless they are imported into the territory of Estonia.

The zero rate of VAT (value added tax) does not apply to services purchased outside the Euro area in the territories of certain offshore jurisdictions.  VAT reports are supplied to the tax authorities on a monthly basis. When exporting goods and services from Estonia - 0%, in the report on this tax does not affect. However, though Estonian company is not required to be registered as a VAT payer, the necessity derives to pay VAT when the amount subject to VAT exceeds 250 000 EEK (16 000 EUR).

It should also be noted that most Estonia offshore is virtualized. There is an open computer system of commercial registration, all reports submitted in electronic form only, and the company can be managed from anywhere.



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