How to do business in Estonia

In Estonia you can choose to start doing business in the form of a private limited company (OÜ), a public limited company (AS), a general partnership (TÜ), a limited partnership (UÜ), a commercial association (tulundusühistu) or sole proprietor (FIE). The most common forms of business are the first two.

The forms of business differ from each other primarily in the following characteristics:

• extent and share of shareholder liability;
  
• the company’s management bodies and decision-making processes, right of representation;
  
• the amount of required share capital and means of contribution;
  
• the company’s audit requirements;
  
• the simplicity of organizing everyday activities (such as accounting), financial reporting, and corporate decision-making.
  

When incorporating an OÜ, something to keep in mind for the future are the requirements for a share transfer transaction. Up to the summer of 2020, the only option for selling the shares of a private limited company was a notarised transaction (in case the shares were not registered in the Estonian register of securities). This meant participating an appointment with a notary public in Estonia in person or having someone represent the parties with a PoA.

In August 2020 amendments to the Estonian Commercial Code entered into force, which simplified the share transfer procedure for private limited companies if certain requirements are met. Specifically, if the share capital of the company is at least EUR 10,000 (fully paid in) and all the shareholders agree, the company can waive the notarial transaction requirement in its Articles of Association. The share transfer transaction must be at least in a form that is reproducible in writing, which simplifies selling and buying the shares of a company significantly.

In case you want to establish a company in Estonia.

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