Estonia's company rules: quick facts
- Entity
- Private limited company (OÜ) formed through e-Residency
- Tax model
- Tax on distributed profit, 22% Source: emta.ee, checked September 29, 2026. Estonian Tax and Customs Board tax rates for 2026 (page updated November 11, 2025): corporate income tax 22/78 of the net distribution, which is 22% of the gross profit distributed. The 14/86 rate for regular dividends ended on January 1, 2025. The e-Residency programme (post updated April 7, 2026) says no rate changes are planned for 2026 or 2027Headline corporate tax rate
- Tax on $100,000 of profit kept in the company
- 0% Source: emta.ee, checked September 29, 2026. Estonian tax only. Profit kept in the company is not taxed in Estonia until it is distributed. The same EMTA page warns that a company managed by an e-resident from outside Estonia 'will probably have a permanent establishment abroad' and must pay tax on its profit there. The page says nothing about controlled foreign company rules
- Tax on $100,000 of profit paid out to a non-resident owner
- 22% Source: emta.ee, checked September 29, 2026. $100,000 = EUR 87,889 at EUR 0.878889 per USD (ECB, 2026-09-28). Paying it all out: net dividend EUR 68,553 (78%) plus income tax 22/78 x 68,553 = EUR 19,336, or 22% of profit. No further withholding on the dividend to a non-resident individual. The owner's residence country usually taxes the dividend again, often with no credit for the 22%
- Dividend withholding for a non-resident owner
- 0% Source: emta.ee, checked September 29, 2026. EMTA: when the company pays income tax on the dividend at the normal 22/78 rate, no further income tax is withheld on the distribution to a natural person. The 7% withholding survives only for certain dividends paid out of pre-2025 exempt income
- Formed without visiting
- Yes
- Stripe available
- Yes Source: stripe.com, checked September 29, 2026
- Bank or EMI account
- Workable
- Audit required
- No
- EU list of non-cooperative jurisdictions
- Not listed Source: taxation-customs.ec.europa.eu, checked September 29, 2026
- FATF grey list
- Not listed Source: taxation-customs.ec.europa.eu, checked September 29, 2026
- Economic substance rules
- No
Which Estonian company a non-resident forms: the OÜ
Non-residents form a private limited company, the OÜ, online through e-Residency. A single management board member is enough and may live anywhere, there is no local director rule, and minimum share capital starts at €0.01 (about $0.01) per shareholder, which is a contribution that stays in the company, not a fee. No audit is needed at this size.
The one local requirement is a contact person: when the management board's address is abroad, the Commercial Code requires a licensed contact person in Estonia to receive official documents for the company. In practice every OÜ run from abroad buys this with a legal address from a service provider.
How an Estonian company is taxed: 0% kept, 22% paid out
An Estonian company pays no tax on profit while it stays in the company. When profit is distributed, the company pays 22/78 of the net dividend, which is 22% of the gross profit paid out. At $100,000 of profit, which is €87,889, paying it all out leaves a €68,553 (about $78,000) dividend and €19,336 (about $22,000) of tax.
Once the company has paid that 22%, no further Estonian tax is withheld on a dividend to an e-resident. Board member fees are different: Estonia charges 22% income tax plus 33% social tax on them wherever you do the work, which is why owners living abroad take dividends instead.
VAT registration is optional below €40,000 (about $45,500) of taxable turnover, and the standard rate has been 24% since July 1, 2025. Services sold to business customers elsewhere in the EU are reverse-charged by the customer.
David's note
I would only count on the 0% for kept profit if Estonia is the only country with a claim on the company. For a founder who lives in a high-tax country and works from home, the honest plan is that country's corporate tax on the profit plus its tax on the dividend, and the OÜ earns its place through the online admin and EU credibility, not the rate.
Cost and timeline to set up in Estonia
| e-Residency application (state fee)Official fee | €150 (about $171) Source: learn.e-resident.gov.ee, checked September 29, 2026. e-Residency knowledge base, Estonian state fees (updated May 20, 2025): EUR 150, about $171. The e-Residency programme says the fee becomes a flat EUR 165 from January 1, 2027 (post updated April 7, 2026) |
|---|---|
| Private limited company (OÜ) registration (state fee)Official fee | €265 (about $302) Source: abiinfo.rik.ee, checked September 29, 2026. Centre of Registers and Information Systems help: 'The state fee for founding a private limited company electronically is 265 EUR', set by the State Fees Act. Same figure on e-resident.gov.ee/start-a-company. About $302. Later amendments cost EUR 25 |
| Setup, all inMarket range, checked Sep 2026 | $470 to $1,900 |
| Running cost per year, all inMarket range, checked Sep 2026 | $800 to $3,600 |
Official fees come from the government or registry schedule. Market ranges cover formation and yearly upkeep through a provider, including a registered agent and filings. Timeline: The e-Residency card must be collected once in person at one of more than 50 pickup points worldwide. After that, registering the OÜ online takes 15 minutes to 1 hour to complete.
How to open a company in Estonia from abroad
You form the OÜ without visiting Estonia, with 1 exception: the e-Residency card has to be collected in person at one of more than 50 pickup points worldwide, including Estonian embassies. The Police and Border Guard Board processes an application in 30 days, plus 2 to 5 weeks of delivery, and you are fingerprinted when you collect it.
Opening an Estonian OÜ as a non-resident
- Apply for e-Residency online and pay the €150 (about $171) state fee, choosing the pickup point you can reach.
- Collect the card in person with your travel document once you are told it has arrived. Nobody can collect it for you.
- Buy a legal address and contact person service from a licensed provider: €200 to €400 (about $228 to $455) a year, set up in 1 day to 1 week.
- Register the OÜ in the e-Business Register for €265 (about $302); the online filing takes 15 minutes to 1 hour. Every cofounder needs an Estonian or e-Residency digital ID, or the company has to be registered through a notary in Estonia.
- Open a business account, which takes 1 hour to 1 week and costs €0 to €200 (about $0 to $228).
- Check your activity before trading: some fields need a notice of economic activity or a business license.
Anyone can apply for e-Residency except people from Russia and Belarus, and Estonian citizens and residence permit holders cannot apply. People living in a country the FATF lists as high risk may be unable to get the financial services an OÜ needs, and that test follows where you live, not your passport.
e-Residency is a digital ID. It gives no right to live in Estonia and does not change your personal tax residency.
Estonian company annual filings and deadlines
The paperwork is light in a year with no payout: the annual report is the only fixed filing, and the tax return is monthly but only for months with a payment.
Yearly filings for an Estonian OÜ
| Filing | Filed with | Deadline | Cost of missing it |
|---|---|---|---|
| Annual report, public once filed, no state fee | e-Business Register | Within 6 months of the financial year end (June 30 for a calendar year) | Fines on the company and its managers; deletion from the register or compulsory dissolution if still missing 6 months later |
| Form TSD with the 22/78 income tax, including Annex 7 for profit taxed at a permanent establishment abroad | Tax and Customs Board | The 10th of the month after any dividend, salary or board fee | Interest on the late tax |
| Your own tax return, with the dividends and any permanent establishment profit | The tax authority where you live | Your country's deadline | Your country's penalties and the tax itself |
Opening a bank account for an Estonian company as a non-resident
An OÜ can bank with an Estonian bank such as LHV or Coop Pank, a bank elsewhere in the EU or EEA, or a fintech. Estonian banks require at least 1 visit to a branch and usually some connection to Estonia, so most founders abroad start with a fintech, which takes applications online.
e-Residency does not guarantee an account. Every bank and fintech runs its own checks on you, the business and where you live, and e-Residency does not open a personal account for you anywhere in Europe.
Stripe fully supports Estonian companies. Estonia exchanges account information under the OECD Common Reporting Standard and has a FATCA agreement with the US, so the company's accounts are visible to the country where you live.
Where an Estonian company's profit is really taxed
The 0% and the 22% only hold while Estonia is the country taxing the company. The Tax and Customs Board says that an Estonian company managed by an e-resident from abroad will probably have a permanent establishment in that country, which then taxes the profit, and that an e-resident in most cases cannot set the 22% against tax at home, because the company paid it. At $100,000 of profit, the owner situations look like this.
Tax on $100,000 of Estonian company profit (€87,889) by owner situation
| Owner situation | Estonian tax | What your country adds |
|---|---|---|
| Lives in Estonia and runs it there | 0% kept; 22%, €19,336 (about $22,000), when paid out | Nothing: Estonia is your country, and the dividend is not taxed again |
| Lives in a high-tax country and runs it from home | 0% on the profit taxed at the permanent establishment abroad, and usually no Estonian tax when that profit is paid out | Corporate tax on the profit through the permanent establishment, every year, then tax on the dividend |
| Lives abroad and no permanent establishment is claimed | 22% when paid out | Tax on the dividend, usually with no credit for the 22% |
| Lives abroad and keeps the profit in the company | 0% until paid out | Controlled foreign company rules can tax the kept profit in your hands, because 0% counts as low tax |
| Has no tax residence anywhere | 0% kept, 22% paid out | Nothing on paper, but banks will ask where you are tax resident |
The first row is the case the OÜ was designed for, and moving to Tallinn brings you under Estonia's own income tax as a resident. Every other row is some version of an OÜ owned by someone living elsewhere, where the tax that matters is the one your own country charges.
Running the OÜ from a home office in a high-tax country
Manage the company from your apartment abroad and that country will usually treat it as having a permanent establishment there, taxing its profit at the local corporate rate every year whether you pay it out or not. The 0% on kept profit then protects nothing. Estonia still wants that profit reported on Annex 7 of form TSD, so keep the proof of what was taxed abroad.
A non-resident's OÜ, set up right and wrong
Works
You live in Estonia, or you budget for your home country taxing the permanent establishment's profit, you take dividends rather than board fees, you report the foreign-taxed profit on Annex 7, and you file the annual report by June 30 every year.
Fails
You live in a high-tax country, run the OÜ from home, keep the profit in the company because it is taxed at 0%, pay yourself a monthly board fee at 22% plus 33%, and declare nothing where you live.
