Articles
Annual Accounts of Estonian company: What Are They and How to Submit Them
If you’re running an OÜ (private limited company) in Estonia, submitting your annual accounts is a crucial task that keeps your business compliant with Estonian laws. Your service provider has probably started bombarding you with warnings a few months before the actual deadline to avoid any late filing penalties.
This guide will explain annual accounts, why they matter, and how to prepare them properly, ensuring your company stays in good standing. Annual accounts are public documents affecting how business partners and anyone else checking on your finances assess your company.
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Potential Tax Hikes in Estonia: What e-Resident Founders Need to Know
As Estonia navigates the challenges of recession, high inflation, and increased defence spending, the new coalition government is considering significant changes to its tax policies. These adjustments are part of the coalition agreement aimed at balancing the state budget and ensuring alignment with the eurozone deficit requirements of 3%. For future e-resident founders looking to start their companies in Estonia, understanding these potential tax hikes may be relevant before making the expenses.
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Legal Responsibilities of the Board Members of an Estonian Limited Company
Estonian e-Residency enables anyone to set up a company in Estonia online. Registering a company is impossible without appointing board members (company directors). If you are the sole founder, you most probably serve as a sole board member of your company. Board members of an Estonian limited company (OÜ) have a lot of responsibilities to ensure the company operates legally and maintains good governance. Below is our comprehensive guide detailing these responsibilities, with links to relevant Unicount blog posts.
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Now you can reserve company names in Estonia
As an Estonian e-resident, securing a business name before officially registering your company in Estonia was impossible before March 2024. Now, you can do that to ensure that your desired name is kept for your business whenever you plan to register it. Here’s a comprehensive guide on how to reserve your business name in Estonia.
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Estonian Business Register recently deleted over 26 000 companies
Estonian Business Register recently deleted more than 26 000 companies for not submitting their annual accounts on time. In 2023, 121 654 companies missed the annual accounts deadline. Of those 26 681 were deleted from the register in 2024, and another 13 100 were fined.
Knowing that non-submission can result in company deletion, it has been widely used to evade debts and tax liabilities. Currently, having debts does not prevent deletion unless legal actions are already in progress. The Estonian Ministry of Justice stresses that deletion does not absolve directors’ legal responsibilities for unlawful acts or inactivity.
Expert Insights on Dividends, Accounting, and Taxation in Estonia
On 7 May, Unicount held its first webinar for its e-resident clients. Our Managing Director, Ivar Veskioja, and our accounting team member, Malle, shared valuable information related to e-residency, Estonian company formation with Unicount, accounting, and taxes. We received questions about various topics, including dividend payments, taxes and accounting in Estonia for non-residents, setting up a bank account in Estonia, and more. In this blog post, we will highlight some of our in-depth answers.
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Free webinar on Estonian e-Residency and Taxes in Estonia on 7 May 2024
E-Residency is a concept introduced by the government of Estonia in 2014 that offers a digital identity for non-residents to access Estonia’s business environment including such online services as company formation, business permits, and taxation. This revolutionary initiative has opened up new avenues for entrepreneurship, enabling individuals to access the European Union’s market without physically relocating. There have been more than 106 000 Estonian e-resident applications from 170+ countries.
How to pay dividends in Estonia?
As an e-resident founder, you’re probably unfamiliar with the basics of Estonian corporate dividend distribution. After building a profitable company, you would probably like to transfer some of the profits to your personal account in addition to the regular salary or director’s fee.
In this article, we explain the legalities and best practices for distributing dividends from Estonian companies to non-resident shareholders.
In a nutshell, shareholders have the sole right to distribute corporate profits, and while profit is an opinion based on accounting principles applied, cash is a fact. This means that even if your company had a profitable financial year, it needs to have enough free cash available to pay it to shareholders and also pay tax on it the next calendar month.
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What to do when your Estonian company gets deleted?
Every Estonian company has to submit annual accounts (annual report) to the Estonian Business Register 6 months after the end of the financial year. On 1 February 2023, a new Estonian Commercial Code and an entirely new law, the Commercial Register Act, came into force, making it easier for the court to delete a company that has not submitted annual accounts.
Before that, companies that did not submit their annual accounts managed to stay on the register for years without problems. This annoyed the Ministry of Justice and private sector stakeholders, who saw it as an unfair business environment with no sanctions for non-compliant companies. Now, it is nearly an automatic process, with fines imposed on board members who failed to perform their legal responsibility of submitting annual accounts.
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