Open an Estonian Holding Company

The Estonian tax regime is attracting new investors every year. With no corporate tax on undistributed profits and a tax rate of 22% (22/78) on the distributed profits, Estonia differentiates itself from other European countries. Estonia is also a member of EU, EEA, NATO this granting access to a market with more than 300 million consumers in very attractive conditions. Many treaties were signed in order to protect the investors and their profits, such as the double tax treaties which grant many exemptions from taxes and smaller withholding taxes on interests and royalties. Estonia is also following the Parent/ Subsidiary Directive (dividends) and the Interest and Royalties Directive, which grant exemptions from withholding taxes. Our team can help you open an Estonian holding company.

Many of the investors chose to open holding companies in Estonia because of the favorable economic conditions. The holding companies are entities which own shares in other companies, called subsidiaries. The amount of owned shares is establishing the degree of implication in the subsidiaries’ management.

The holding companies can be organized as limited companies with the following characteristics: at least one founder must register it (regardless the nationality) and a minimum share capital of €0.01 for a private limited company and €25,000 for a public company must be paid at registration (an OÜ may defer its contribution). The capital is divided into shares of at least €0.01 for the private companies and €0.10 for the public companies. Monetary contributions are paid to a bank account; no bank confirmation is required for OÜ contributions under €50,000.

There is also a state duty and a notarization fee. The state fee for registering a private limited company online is currently €265 and the notary’s fees depend on the amount of deposited capital. The incorporation of a company doesn’t take longer than seven working days; usually the registration in the commercial register takes around five days. If you want to set up a holding company in Estonia, our local layers can handle the entire process.

Besides the registration in the Commercial Register, there is also mandatory the registration for VAT (for companies whose taxable turnover exceeds €40,000 in a calendar year) and the registration of the employees in the Employment Register of the Estonian Tax and Customs Board. In order to protect your brand and your business, you can register your trademark in Estonia and our lawyers can help you.

There is also the possibility to register a company from abroad online, if the specimen signatures are attached or through an assignee authorized to represent the company and register it. Besides the short period of time necessary for incorporation, there is also another advantage of establishing a holding company regarding the residency of the shareholders which is not mandatory to be Estonian. In case more than a half of the members of the management board are not residents of Estonia or Switzerland or in a country from European Economic Area or, then the company must appoint a contact person in Estonia to whose address the register and other persons can send the official documentation.

If you want to open a holding company in Estonia, our Estonian lawyers are at your disposal.