Articles
Why e-residents should not register as sole proprietors in Estonia
In this article, I will explain the main differences between having a limited company versus registering as a sole proprietor in Estonia. We would also look into other possible forms of registering a business, and give our best advice to first-time founders wondering what is the best solution for running a remote business online.
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Upcoming Changes in Estonia’s VAT Rates
Earlier this year the Estonian parliament adopted changes to the country’s value-added tax (VAT) rates for the coming years.
These rate changes will impact most of our e-resident clients with a limited company in Estonia. Both businesses and consumers are better off being informed well before these changes are in effect. Here’s an overview of the changes.
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Permanent Establishment and Dual Residence
Permanent Establishment (PE) and Dual Residence regulations are critical aspects of international taxation, as they determine how and where your Estonian company’s profits are taxed. These regulations can be complex, and understanding them is vital if you operate an Estonian company in other jurisdictions. In this article, we give you an overview of PE regulations, with a focus on how they apply to e-resident companies registered in Estonia.
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Estonian Tax Rates explained to e-resident founders
Starting a business can be complex, but understanding Estonian tax rates does not have to be. This is a beginner’s guide written in the simple language we like at Unicount when helping e-resident founders navigate the Estonian ecosystem.
After reading this, you may want to move to Estonia to benefit from the Estonian tax rates available to individuals and companies. Estonia has a thriving startup scene and needs founders and top talent for technology companies.
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Startup Funding for e-Resident Founders
Estonia, a country full of ambitious entrepreneurial minds, also extends a variety of resources and opportunities for growth to its e-Resident founders. Some grants may require your Estonian company to have a certain turnover or people on the payroll to qualify, while the startup funding and accelerators have no bureaucratic requirements stopping you from accessing them equally to resident founders.
Estonian flourishing startup ecosystem includes various grants, accelerators, business angels, venture funds and networking platforms available to all founders, aiding you in overcoming the initial hurdles of building a business from scratch in a foreign country. You may also want to learn about Estonia’s unique tax system and build your business here.
Estonian limited company shareholders are now part of company certificates
On 13 April 2022, the Estonian parliament adopted a brand-new Commerical Register Act which came into force on 1 February 2023. In our previous blog posts, we explained how the new legislation affected share capital requirements and removed the role of contact person unless a foreign address is used. One of the aspects of the new law came into force on 1 September 2023. It makes shareholder lists part of the public company registration certificates. We suggest reviewing your shareholdings in the Estonian Business Register if your companies have had transactions with shares after registration. This article provides a comprehensive overview of the key changes and their implications.
How many companies submitted accounts on time?
June 30 was the deadline for submitting annual accounts (annual report) for all Estonian companies whose financial year ended on 31 December 2022. Approximately 290 000 companies had to submit their annual report in June, which is roughly 95% of Estonian companies. 162 689 companies submitted accounts by the 30 June deadline.
This means that only 56% of annual accounts were submitted on time. Let’s look more into this issue, including what the Estonian government said about this figure and its plans. You may want to read this if you are an Estonian company owner who did not manage to submit accounts on time.
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Opening a Bank Account in Estonia
Estonia has become a hotspot for entrepreneurs and digital nomads with its e-Residency program. This program allows non-residents to establish and manage an Estonian company online and offers numerous benefits, including access to the European Union market.
One crucial aspect of running a business is having a reliable and efficient banking solution. This article will dive into the various banking options available for Estonian e-resident-owned and managed companies.
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Estonian VAT and income tax rates increased
In the early hours of 20 June, the Estonian parliament voted to raise several taxes. The previously agreed coalition agreement signed by the Reform Party, Social Democrats and Eesti 200 foresaw increasing income tax and VAT to cover the budget deficit. A major part of the deficit was related to the Reform Party’s expensive campaign promise to raise tax-free personal allowance to 700 euros for taxpayers from all income brackets.
Here is what was passed on the second and final vote in the parliament on the 20 June night session. The tax raise for the 2024 tax year was already very close to the legally required 6-month advance notice to taxpayers.
