It is crucial to recognise when your Estonian company has become a burden instead of being a place to express your passion for business. Liquidating a Company at the right time and using a professional and trustworthy service provider for handling the process can save your health, time, and funds.

Financially speaking, you should consider company liquidation in the following situations:

• Constant loss and inability to cover costs
• Insufficient turnover
• Not enough demand for your services/products
• High debts to third parties (shareholder loans are an exception here)

Company Liquidation to avoid burnout

From a mental health point of view, you should consider company liquidation if you feel burned out. Owning a business can be challenging, as it not only frees you from micromanagement but also requires you to be present 24/7, which can become overwhelming. No business or work is worth constant physical/mental stress and a decrease in the quality of life.

If it is difficult to keep up with the legal requirements in Estonia, we are here to provide you with full assistance. Thus, in that case, liquidation is not the only solution. Read more about the dissolution of a private limited company.

Company Liquidation prevents further damages

For other reasons, company liquidation might be the right option to prevent potential further damage. The Wisor Group team can help you through the process and ensure that the company is liquidated as quickly and simply as possible, so you can move on with your life calmly.

Company Liquidation for non-compliant companies

Regarding obligations, it is time to dissolve your company when it becomes too difficult to meet the requirements for legal entities in Estonia. This means being constantly non-compliant with Estonian laws, which puts you at risk of fines and being mentioned in public notifications. Legal requirements include having a registered address and submitting annual reports on time, which are easy to comply with if you have a professional service provider in Estonia.

Non-compliant companies are quickly removed

Your Estonian company is at risk of deletion by the Estonian commercial register for any non-compliance (including not having a legal address, not submitting annual reports, etc). Due to the high number of non-compliant (so-called “sleeping”) companies in Estonia, a goal was set by the Estonian authorities to clean the business register of companies not fulfilling legal requirements.

Firstly, you are notified by the court with a ruling stating your non-compliances and the deadline for rectifying them. If you are unable to meet the deadline and do not apply for an extension, the registry promptly deletes your company, usually within a few days after the deadline.

This process underscores the importance of taking any business register notifications and court rulings with full seriousness. 

Company Liquidation Service in Estonia

Our team is always ready to assist in ensuring your company's compliance with Estonian laws and regulations. In case of deficiencies, we set a plan to rectify them, ensuring your company becomes law-abiding and fully operational again. Contact us if you need help with company liquidation in Estonia.

Estonia is highly competitive and offers a unique and attractive tax system that is particularly beneficial for businesses and investors. Let's see what are the types of taxes in Estonia and where does Estonia stand in comparison to other top tax environments in Europe.

Read more about tax rates in Estonia.

What are the Taxes in Estonia?

• Estonian Corporate Tax Rate: Estonia's corporate tax system is distinctive. Rather than taxing profits as they are earned, Estonia imposes a 22% corporate tax on distributed profits. This means that reinvested profits are not taxed, providing significant incentives for companies to reinvest earnings into business growth.
• Estonian Personal Income Tax: Estonia has a flat personal income tax rate of 22%, which is competitive compared to many other EU countries.
• Estonian VAT: The standard VAT rate in Estonia is 22%, with reduced rates of 9% for certain goods and services.

Unique Advantages of Estonia's Tax System

1. Reinvestment Incentive: The zero tax on reinvested profits encourages businesses to invest more in development, innovation, and expansion without the immediate tax burden.
2. Simplified Tax Administration: Estonia is renowned for its digital governance and e-services, making tax administration straightforward and efficient. The country's e-Residency program further simplifies business operations for non-residents.

Taxes in Estonia: Comparison with Top 5 EU Countries with Lowest Taxes

While Estonia's headline tax rates may not be the lowest in the EU, its unique approach to corporate taxation and the business-friendly environment make it an attractive option, especially for businesses looking to grow and reinvest profits. Here’s a brief comparison:

• Corporate Tax Rate:
  • Bulgaria: 10%
  • Hungary: 9%
  • Ireland: 12.5%
  • Cyprus: 12.5%
  • Lithuania: 15%
  • Estonia: 20% (on distributed profits)
• Personal Income Tax:
  • Bulgaria: 10%
  • Hungary: 15%
  • Ireland: 20% - 40%
  • Cyprus: 20% - 35%
  • Lithuania: 15% - 32%
  • Estonia: 20%
• VAT:
  • Bulgaria: 20%
  • Hungary: 27%
  • Ireland: 23%
  • Cyprus: 19%
  • Lithuania: 21%
  • Estonia: 20%

Corporate Income Tax Rates in Europe:

Source: Tax Foundation (https://taxfoundation.org/data/all/eu/corporate-tax-rates-europe-2024/)

Corporate Income Tax: Revenue vs. Distributed Profit in Top 5 EU Countries

In the context of corporate income tax, most countries tax profits rather than revenue. Revenue refers to the total income generated by a company from its operations, while profit is the revenue remaining after all expenses, including operating costs, salaries, and other deductions, are subtracted. Let's look at how the top five EU countries with the lowest taxes apply corporate income tax:

1. Bulgaria

• Corporate Income Tax: Bulgaria taxes corporate profits at a flat rate of 10%.
• Basis of Taxation: Profits. Bulgaria's corporate tax is applied to net profits after allowable expenses have been deducted from total revenue.

2. Hungary

• Corporate Income Tax: Hungary has the lowest corporate tax rate in the EU at 9%.
• Basis of Taxation: Profits. Hungary taxes corporate net profits, not revenue, meaning the tax is applied to profits remaining after expenses.

3. Ireland

• Corporate Income Tax: Ireland taxes corporate trading income at a rate of 12.5%.
• Basis of Taxation: Profits. Ireland's corporate tax is levied on net profits, specifically from trading activities, after deducting business expenses.

4. Cyprus

• Corporate Income Tax: Cyprus imposes a corporate tax rate of 12.5%.
• Basis of Taxation: Profits. The corporate income tax in Cyprus is applied to net profits after deducting all operational expenses.

5. Lithuania

• Corporate Income Tax: Lithuania taxes corporate profits at a rate of 15%.
• Basis of Taxation: Profits. The tax is levied on net profits after deducting allowable expenses from total revenue.

Taxes in Estonia: A Different Approach

As a point of comparison, Estonia's system is unique within the EU:

• Corporate Income Tax: Estonia taxes distributed profits at a rate of 22%.
• Basis of Taxation: Distributed Profits. Unlike the other countries mentioned, Estonia does not tax retained earnings or reinvested profits. The tax is only applied when profits are distributed to shareholders, such as through dividends.

Summary of Taxes in Estonia

To summarize, the corporate income tax in the top EU countries with the lowest rates is based on net profits rather than revenue. This means businesses are taxed on the profit remaining after all allowable expenses are deducted from their total revenue.

Estonia has a distinct system where only distributed profits are taxed, which can be particularly advantageous for businesses focused on reinvesting profits to fuel growth. This system encourages reinvestment and expansion without the immediate tax burden on profits that are not distributed.

Contact Wisor Group to understand the Estonian tax system better.

Estonia has garnered a reputation for being a business-friendly environment, especially for startups and tech companies. As it is soon the time to submit the annual reports for 2023, we would like to turn your attention to the key aspects of running a business in Estonia which involves understanding the accounting requirements and ensuring compliance with local regulations. Let's take a look at accounting requirements, annual report submission and deadlines and how accounting services in Estonia are beneficial for your business. 

Monthly Accounting Requirements

In Estonia, monthly accounting is not mandatory for all businesses. Specifically, if your company does not have any employees, does not hold a VAT number, and its annual revenue does not exceed 40,000 EUR, you are exempt from monthly accounting obligations. In such cases, you are only required to submit an annual report once a year. This flexibility can significantly reduce the administrative burden for small businesses and startups, allowing them to focus more on growth and development.

2023 Annual Report Submission Deadline

Regardless of the size or revenue of your business, if you are operating in Estonia, you must submit an annual report. The deadline for the submission of the annual report for the fiscal year 2023 is June 30, 2024. It is crucial to adhere to this deadline to avoid any penalties or legal issues.

Consequences of Failing to Submit the Annual Report

Failure to submit the annual report by the specified deadline can lead to significant consequences. Initially, authorities may impose fines on your company for non-compliance. If the report remains unsubmitted, the company faces the risk of involuntary deletion from the commercial register. This means that your business will be officially dissolved, and you will lose the ability to operate legally in Estonia. Therefore, timely submission of the annual report is not just a regulatory requirement but also essential for the continuity of your business.

Our Accounting Services in Estonia

At Wisor Group OÜ, we understand the complexities of accounting and compliance in Estonia. We offer comprehensive accounting services in Estonia tailored to meet the needs of various types of businesses. Our clients range from small startups to large enterprises, and we pride ourselves on delivering personalised solutions that cater to each client's unique requirements.

We collaborate only with trusted and experienced accountants who are well-versed in Estonian accounting standards and regulations. With our assistance, you can be assured that your accounting needs will be handled with professionalism and accuracy. Our team is dedicated to ensuring that your financial records are correctly maintained and that all reports are submitted in a timely manner.

In our Accounting Services, we offer:

• Expertise: Our accountants possess extensive knowledge and experience in Estonian and international accounting practices.
• Reliability: We ensure that all accounting tasks are completed accurately and on time.
• Customization: Our services are tailored to fit the specific needs of your business, regardless of its size or industry.
• Peace of Mind: With our accounting services, you can focus on growing your business while we handle the financial details.

If you are looking for Accounting Services in Estonia

In conclusion, navigating the accounting landscape in Estonia can be straightforward with the right support. Whether you need assistance with monthly accounting, annual report preparation, or general financial management, Wisor Group OÜ is here to help. Contact us today to learn more about how we can support your business and ensure compliance with all accounting requirements.

Are you a business owner in Estonia who's faced the unfortunate circumstance of having your company involuntarily deleted from the registry? If so and you are looking for ways to restore the company, then Wisor Group and our experienced lawyers are able to assist you with the restoration process. Estonia provides options for restoring your company, depending on the reason for its deletion. In this blog post, we'll walk you through the process of restoring your company, whether it's through the court system or the Commercial Register.

Different ways of Restoring a Company:

Restoring a Company via Court

If your company was involuntarily deleted due to reasons such as the company has been liquidated but assets have remained in the name of the company or claims arise against the company,  which require the company to be active in the registry, you can opt for restoration through the court system. Here's how it works:

1. Application to the Court: The first step involves filing an application to the court for the restoration of your company. In this application, you'll need to provide a detailed reason and proof why the company needs to be restored.
2. Providing Proof: Along with your application, you'll need to provide evidence supporting your claim for restoration. This could include documentation showing efforts to rectify compliance issues or resolve outstanding claims against the company.
3. Liquidator's Confirmation: If the company was in liquidation status prior to its deletion, you'll need confirmation from the liquidator supporting the restoration.
4. Proof of Payment: Finally, you'll need to provide proof of payment of the state fee associated with the restoration process.

The court will then review your application within a reasonable time frame and, if satisfied with the evidence provided, will restore the company into liquidation status, so you can complete the company deletion properly.

Restoring a Company via Commercial Register

For simpler cases, such as those involving unsubmitted annual reports or missing company data, restoration can be pursued through the Commercial Register. Here's how:

1. Submission of Petition: Within three years after the deletion of the company, you can submit a petition for reinstatement to the register. This petition should outline the reasons for reinstatement and any supporting documentation.
2. Competent Body Resolution: Along with the petition, you'll need to include a document indicating the resolution of a competent body (such as the company's board of directors) concerning the restoration to the register.

The registry will then review the application within five working days and, if everything is in order, will reinstate the company in the registry.

Restoring a Company in Estonia

Restoring an involuntarily deleted company in Estonia may seem daunting, but with the right understanding of the process and proper documentation, it can be accomplished smoothly. Whether through the court system or the Commercial Register, Estonian law provides options for businesses to rectify their status and continue their operations. If you find yourself in this situation, don't hesitate to seek legal advice and take proactive steps towards restoration. Contact Wisor Group for legal consultation.

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Frequently Asked Questions about Restoring a Company

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1. How long does the process of restoring a company typically take? 

The timeline can vary depending on the complexity of the case and the workload of the court or registry. However, both processes aim to resolve the restoration efficiently. Also additional approvals from the Tax Office may be required, thus the timeframe is a lot dependent on the company profile and restoration option.

2. Can I restore my company if it was deleted and there are now new claims against it?

Yes, you can pursue restoration through the court system by providing evidence that the claims have been brought up against the company.

3. Can I restore my company if it was deleted and there are assets remaining in the name of the company? 

Yes, you can pursue restoration through the court system by providing evidence that there are assets under the company.

4. Is there a time limit for submitting a petition for reinstatement to the register? 

Yes, you have up to three years after the deletion of the company to submit a petition for reinstatement.

5. Is there a time limit for submitting a petition for reinstatement through the court?

With the court the time limits depend on the reason why you would need to reinstate the company. Usually, there are no certain time limits for restoration through the court.

6. What happens after the company is restored through the Commercial Register? 

Once the company is compliant (e.g. annual reports submitted, all data reflected) and is restored, it will regain its legal status and can resume its operations, subject to any conditions imposed during the restoration process.

7. What happens after the company is restored through the Court?

Company will regain its legal status “in liquidation” and during the liquidation process, all pending matters shall be resolved and the company will be properly deleted.

Wisor Group is a proud member of the Estonian Chamber of Commerce and Industry since 1^st March 2024. Overall more than 3400 companies have joined the ECCI.

Ceremonial handover of the membership certificate took place in the historical office building of the ECCI in Tallinn Old Town on 20^th March 2024.

Board members Merle Paju and Kristine Akopdžanjan attended the event and received the certificate along with presents from the ECCI.

Wisor Group is honored to become a member of ECCI and looks forward to the mutually beneficial cooperation with the Chamber.

The event continued with the director of the Estonian Institute of Economic Research Peeter Raudsepp presenting the realistic forecast for the Estonian economy. Merle and Kristine got to discuss with Peeter the roots of the current economic crisis in Estonia and possible options Estonia as a country has to improve the situation.Wisor Group’s listing as an ECCI member is visible on their website https://www.koda.ee/en/node/14614

From 1 January 2024, the standard rate of VAT in Estonia is 22% instead of the previously applicable 20%.

Choosing the right tax rate must be based on the time of supply of products and services:

• if the time of supply is in 2023, 20% VAT is applicable
• if the time of supply is in 2024, then 22% VAT must be added.

However, there are two transitional provisions (e.g. transactions related to long-term contracts), which you can read about following the link: https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax#from-01012024

VAT in Estonia: examples of VAT rate changes

Tax and Customs Board has brought out some examples of VAT rate change related situations, which you as a business owner might be facing:

1. I have issued an advance invoice from my company to the client in December 2023 and the invoice payment was also done in December 2023. The products were delivered to the buyer in January 2024.

What should be the VAT rate in this case? As the supply was fully generated in 2023, then it is taxed at 20% VAT rate.

2. I sold products in 2023 with 20% VAT, but the customer returned them in 2024.

When returning products, the invoice is credited just as it was issued, thus the credit invoice has a 20% VAT rate.

3. I issued the invoice in 2023, products were delivered and the invoice was paid in January 2024.

No supply is created from issuing an invoice alone. If both the delivery and the payment take place in 2024, the transaction is taxed at the VAT rate of 22%, and the VAT rate indicated on the invoice must also be 22%.

More examples can be seen here: https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax#examples-01012024

In case you are interested in or already use our accounting services, please do not hesitate to contact us and send us directly any tax-related questions you have. 

In the dynamic landscape of business, understanding the full spectrum of your company's lifecycle is essential. This includes being well-informed about the processes of company liquidation and merger. While these might not be the most appealing subjects, having a comprehensive grasp of the processes, requirements, and associated costs is crucial for effective decision-making.

In this article, we will provide a detailed exploration of Estonian company liquidation, including the recent change allowing for simple applications for deletion in the case of dormant companies, as well as the intriguing option of company liquidation via merger, especially when merging with a shareholder who is a physical person. If you are interested, feel free to visit our liquidation service page for an overview of all services.

Understanding Estonian Company Liquidation

Company liquidation is a formal process that involves winding up a business entity. In Estonia, the Commercial Code outlines the steps and requirements for a seamless transition from active operations to dissolution. Whether your company has naturally reached the end of its journey or you're considering a strategic move, understanding this process is essential.

The Standard Estonian Company Liquidation Process

1. Shareholder Resolution: The process begins with the company's shareholders drafting a resolution to initiate liquidation. This decision necessitates shareholder approval.
2. Appointment of a Liquidator: A liquidator, either from the management board or an external professional, is appointed to oversee the liquidation process. It is mandatory that at least one appointed liquidator is an Estonian resident. In the usual liquidation process there are generally two liquidators: one from the board and the other a consultant/lawyer from our side.
3. Public Notice: A notice regarding the liquidation is published in the official publication Ametlikud Teadaanded and potentially on the company's website.
4. Inventory and Valuation: A comprehensive inventory of the company's assets and liabilities is conducted, followed by their valuation. This step provides clarity on the company's financial standing.
5. Settlement with Creditors: All outstanding debts and obligations to creditors are settled within a specified period. Creditors are given the opportunity to submit their claims.
6. Distribution of Assets: After settling liabilities, remaining assets are distributed among shareholders based on their ownership stakes.
7. Tax Obligations: Settling all tax obligations, including income tax and VAT, is paramount prior to the completion of the liquidation process.
8. Submission of Final Reports: The liquidator prepares a final report, incorporating the inventory, valuation, and financial statements. This report is then submitted to the Commercial Register.
9. Application for Deletion: Following the submission of a liquidation report, an auditor's report (if required), and other necessary documents, the company can be deleted from the Commercial Register based on the relevant application.

Notably, our team of legal professionals has ingeniously streamlined the standard liquidation process, ensuring operational efficiency and minimising administrative complexities by understanding all accounting aspects beforehand and therefore ensuring the uninterrupted flow of the whole liquidation process.

The anticipated timeline for the comprehensive company liquidation ending with final deletion is 8 months for regular liquidation and 4 months for liquidation via merger.

Our clients have to provide us with all relevant accounting documents, visit the notary once (in their home country) and then let us take care of the rest. In case all the related persons have Estonian ID cards or E-residency cards, then the whole process can be done with just digitally signing the documents prepared by us. 

Digital Application for Deletion for Dormant Companies

A notable recent change in the Estonian company liquidation process concerns dormant companies. If a company is dormant, meaning it has had no economic activity whatsoever, it is now possible to make an application (either digital or legalised) to the Commercial Register with a request for deletion. This streamlined approach aims to simplify the process for such cases, minimising administrative burdens. After submitting the relevant application to the registry it will be necessary to wait for the tax office approval regarding the deletion. After the tax office has provided the relevant approval the company will be deleted. Generally this takes between 2 weeks to 2 months to complete.

Estonian Company Liquidation via Merger with a Sole Shareholder of the Company

An intriguing alternative to traditional liquidation is to do it via merger. You may follow our company liquidation service page for the short description of the process. This process involves merging the liquidating company with the sole shareholder of the company, effectively transferring its assets, liabilities to the physical person. This option offers several advantages:

• Asset Utilisation: The assets and liabilities of the liquidating company are joined with the shareholder.
• Time efficient: The company will be deleted within approx. 3-4 months.

The Process of Estonian Company Liquidation via Merger with the Sole Shareholder of the Company

1. Shareholder resolution: The company's management and shareholder decide to pursue liquidation via merger with the physical person shareholder.

2. Shareholder Agreement: A notarial agreement is formulated between the company and the physical person shareholder, detailing the terms and conditions of the merger. The agreement encompasses the transfer of assets, liabilities, and ongoing responsibilities.

3. Public Notice: A notice regarding the merger is published in the official publication Ametlikud Teadaanded.

3. Valuation and Asset Transfer: Company assets and liabilities are valued in accordance with prevailing industry standards. Preparation is made for transferring assets to the physical person shareholder's entity, alongside the assumption of liabilities.

4. Formation of Accounting Documents: Essential legal documents, encompassing the merger agreement and valuation reports, are prepared and submitted to relevant authorities. Outstanding company obligations, including debts and liabilities, are settled before finalizing the merger.

5. Dissolution of Original Company: Upon successful completion of the merger, the original company undergoes formal dissolution, effectively removing its entity from records. For this the final accounting documents as well as the deletion application is submitted to the Commercial Register. Read more about the dissolution of your Estonian company.

Estonian Company Liquidation Process Pricing and Costs

The expenses associated with liquidating a company or executing a merger in Estonia can vary based on factors like financial complexity, outstanding obligations, and professional involvement. Consulting with our experienced legal advisors is crucial for obtaining accurate cost estimates tailored to your unique situation.

We've also created straightforward packages for each liquidation option, drawing from our expertise. These packages are designed to match common scenarios and simplify the process. This means you'll have clear options that suit your situation, ensuring a smoother experience.

To Conclude Estonian Company Liquidation 

Estonian company liquidation and merger might appear complicated processes, yet with expert planning and support from local professionals, they can be managed effectively. By understanding the intricacies and costs of these processes, along with recent changes like simplified deletion applications for dormant companies, you are empowered to make strategic decisions about the future of your business. Collaborating with a reputable corporate service provider simplifies the procedures and ensures compliance with legal requirements, facilitating a seamless transition.

Please also see the FAQ regarding liquidation on our services website.

In case of any questions or inquiries about the liquidation, please feel free to send us an inquiry.

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Frequently Asked Questions (FAQ) About Estonian Company Liquidation

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1. What is company liquidation in Estonia? 

Company liquidation refers to the formal process of winding up a company's affairs and operations. It involves the orderly distribution of assets, settling of liabilities, and ultimately, the dissolution (deletion) of the company from the Commercial Register.

2. Why would a company opt for liquidation? 

Companies choose liquidation for various reasons, including financial distress, cessation of operations, compliance with regulatory requirements, or as a strategic decision to end the company's existence.

3. What are the different types of company liquidation in Estonia? 

There are two main types of liquidation: voluntary liquidation, initiated by the company's shareholders, and compulsory liquidation, initiated by external parties such as creditors or regulatory authorities.

When talking about voluntary liquidation in Estonia, there are different options:

1. Regular liquidation

2. Simplified deletion (suitable only for completely dormant companies)

3. Liquidation via merger (merging the company with the physical person shareholder)

4. How long does the company liquidation process typically take in Estonia? 

The duration of the liquidation process varies depending on factors such as the complexity of the company's financial affairs and the efficiency of the chosen process. Generally, the process can take several months to complete. Please see our liquidation options and timeframes.

5. What is the role of a liquidator? 

A liquidator is responsible for overseeing the entire liquidation process. Their duties include valuing assets, settling debts, distributing assets to stakeholders, preparing reports, and ensuring compliance with legal requirements. Our appointed liquidators will get necessary information from the company representatives and shareholders and work with them closely in order to ensure a smooth liquidation process.

6. What is the role of the shareholders in liquidation? 

Shareholders play a crucial role in initiating the liquidation process by passing a resolution to wind up the company. They may also be entitled to receive a share of the company's remaining assets after settling liabilities. In case of liquidation via merger with a shareholder, the shareholder takes on all the company's assets and liabilities.

7. What happens to the company's assets and liabilities during liquidation? 

Assets are valued and sold, with the proceeds used to settle the company's liabilities. Any remaining assets are then distributed among shareholders according to their ownership stakes. In case of liquidation via merger with a shareholder, the shareholder takes on all the company's assets and liabilities.

8. Can a company continue operations during liquidation in Estonia? 

In most cases, a company ceases its regular operations during the liquidation process. However, some limited operations may be necessary to facilitate the liquidation itself. Our liquidation process will generally start only after the company has ceased its operations and ended all relationships, as well as closed the bank accounts.

9. What are the Estonian tax implications of company liquidation? 

Liquidation can have tax implications, including income tax and VAT. All tax obligations should be settled before the process is completed. You will be guided in detail by the accountant during the process.

10. What is the significance of public notices during company liquidation in Estonia? 

Public notices about the liquidation are published in the Estonian Official Publications to inform creditors, stakeholders, and the public about the company's status (so that they can make their claims, if needed). It's a crucial step to ensure transparency and compliance with legal requirements. In Estonia public notices are published in Ametlikud Teadaanded.

11. Can an Estonian dormant company go through liquidation? 

Yes, even dormant companies can undergo a regular liquidation process.

However, there is a simplified deletion process (without liquidation) for dormant companies in Estonia. It is done by signing an application (either digitally or legalised) to the Commercial Register and getting Tax Office approval for deletion of the company.

12. What is the difference between company liquidation and bankruptcy in Estonia? 

Liquidation is the process of winding up a company's operations, whereas bankruptcy typically applies to individuals and companies who are unable to repay their debts. Bankruptcy involves a legal declaration of insolvency.

13. Can a company liquidation process in Estonia be reversed once initiated? 

In certain cases, it might be possible to reverse a liquidation process if shareholders decide to continue the company's operations. However, reversing the process can be legally complex and requires an application to the court. In case you require a reversal of liquidation, please contact our legal advisors.

14. How can professional corporate service providers assist with the company liquidation process in Estonia? 

Experienced corporate service providers can guide you through the intricate process, ensuring compliance with legal requirements, accurate valuations, and a smoother overall transition. The timely filings in the liquidation process are essential to ensure the success of the liquidation and our advisors are able to keep track of all necessary filings and deadlines.

15. Are there any alternatives to company liquidation in Estonia? 

Yes, we also offer purchasing your company fully with the intention of liquidating it later. Meaning, that you will be free of your company from the moment of sales. There are certain requirements to be met before the sales, however this can be in some cases the most suitable option for some clients. Look for further information on company purchase fully.

Remember, every company's situation is unique, and seeking professional advice is essential for making well-informed decisions regarding company liquidation.

At Wisor Group OÜ, we understand the importance of developing a substantial presence in Estonia that extends beyond the obligatory legal requirements. As a response to this, we are introducing our Local Substance and Physical Presence service – a versatile solution that surpasses mere compliance, enabling a genuine relationship with Estonia. Read more about e-Residency in Estonia. 

A Service Beyond Requirements for a company in Estonia

While our Virtual Office and Contact Person services cater to your legal obligations, our Local Substance and Physical Presence service offers an extra layer of engagement. Unlike mandatory requirements, this service is not an obligatory part of the company setup process. However, its potential benefits can significantly augment your company's connection to Estonia.

Unveiling the Service for a company in Estonia

Our Local Substance and Physical Presence service in Estonia entails a range of provisions designed to fortify your business's foothold in Estonia. This includes the establishment of a dedicated landline, an essential communication tool for seamless interaction. Additionally, we extend the option of secretary services, ensuring your calls are answered professionally, enhancing your company's accessibility.

Flexible Office Space in Estonia

One of the standout features of this service is the provision of office space. This office space can serve as a tangible embodiment of your company's commitment to Estonia. It is noteworthy that we facilitate easy and swift termination terms for the office space, offering flexibility that aligns with your evolving needs.

Diverse Applications for a company in Estonia

The Local Substance and Physical Presence service holds particular relevance for various scenarios.Some clients opt for this service to fulfil banking requirements, fostering a tangible local presence for smoother interactions with financial institutions. Others find it beneficial for tax purposes, underlining their commitment to Estonian operations. Read more about company registration in Estonia. 

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FAQ about Local Substance and Physical Presence for a company in Estonia

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1. What is the Local Substance and Physical Presence service for a company in Estonia? 

The Local Substance and Physical Presence service is provided in Estonia by Wisor Group OÜ that goes beyond legal obligations, allowing companies to establish a genuine and tangible connection with Estonia.

2. Is this service mandatory for company registration in Estonia? 

No, the Local Substance and Physical Presence service is not mandatory. It's an optional service designed to enhance a company's connection to Estonia.

3. What does the service entail for a company in Estonia?

This service includes provisions such as the setup of a dedicated landline, secretary services upon request (including call answering), and access to office space in Estonia with

flexible termination terms.

4. How does the service enhance a company's presence in Estonia? 

By providing a landline and office space in Estonia, the service creates a tangible local presence, enhancing accessibility and communication capabilities.

5. Is this service primarily for tax and banking purposes? 

While this service is often beneficial for tax and banking considerations, its purpose is broader. It aims to establish a genuine and substantial connection to Estonia, reflecting the company's commitment to Estonia. Read more about taxation in Estonia.

6. Can companies use this service solely for the purpose of having an Estonian bank account? 

While some companies may use this service for banking purposes, it is not the sole purpose. The service aims to create a credible local presence, which contributes to the company's overall engagement with Estonia.

7. How does the Estonian Local Substance and Physical Presence service benefit the company in Estonia? 

This service benefits businesses by providing them with tools to establish a stronger connection with Estonia, thereby enhancing their reputation, accessibility, and potential for successful interactions with local entities.

8. Who is this service in Estonia suitable for? 

This service is suitable for businesses looking to solidify their presence in Estonia, build credibility, enhance communication capabilities, and navigate tax and banking requirements more efficiently.

9. Can companies choose specific components of the service? 

Yes, companies can tailor the service to their needs. For instance, they can opt for specific elements like the landline setup, secretary services, or office space based on their requirements.

10. How can Estonian companies avail the Local Substance and Physical Presence service? 

Companies interested in this service can reach out to us to discuss their needs and customise the service according to their preferences.

11. Is this service available for both local and foreign companies? 

Yes, both local Estonian companies and foreign companies looking to establish a stronger presence in Estonia can benefit from this service.

12. Is professional advice available for utilising this service effectively in Estonia? 

Yes, our experts can provide guidance on how to make the most of the Local Substance and Physical Presence service, ensuring that it aligns with your business goals and needs.

When embarking on the process of establishing a business in Estonia, it's crucial to understand the details of company registration in Estonia. At Wisor Group we offer a range of comprehensive solutions designed to simplify the process and align with your unique business requirements. 

Option 1: Direct Company Registration in Estonia via Notary with Power of Attorney (POA)

For those seeking a personalised approach, we offer a tailored path to direct company registration in Estonia. This process involves the careful arrangement of registering the company directly in the client's name through the notary. Our team adeptly handles the administrative intricacies, allowing you to focus on your business aspirations.

The Process:

1. Personalised Initiation: Our expert consultants initiate the process in line with your business goals and preferences and gather all relevant information from you to get started. 

2. Tailored Solutions: With precision, we guide you through the necessary legal steps, ensuring compliance with the Estonian laws. We also check the company name availability for you.

3. Notary and POA: By issuing a Power of Attorney (POA), you authorise us to act on your behalf in front of the Estonian notary for establishing a company, thus simplifying the entire procedure. However, it is also possible to visit the notary personally with our advisor to set up the business. 

4. Company Registration: The company registration takes place under your name, with your unique vision at its core.

Please follow this link for a more detailed guide of the process and required KYC. 

Option 2: Company Registration in Estonia for E-Residents

Estonia's pioneering e-residency program has transformed the business landscape, providing a gateway for international entrepreneurs to establish a presence in the European Union. At Wisor Group, our expertise lies in helping e-residents navigate this process with precision.

The Process:

1. E-Residency Advantages: Our experts guide you through the e-residency application process, unlocking access to Estonia's digital ecosystem. The application can be submitted by you online and you can receive the e-residency card itself at the Estonian embassy or in Estonia. 

2. Precise Setup: We assist in setting up your company online, ensuring every detail aligns with your requirements. In addition to our advisory services related to the registration, we also offer guidance for utilising your e-residency card for digital signatures, especially if you are new to this process.

3. Digital Presence: With our support, your business takes root in Estonia's digital landscape, enhancing your global reach.

Please follow this link for a more detailed guide of the process and required KYC. 

Both of the above options allow you to set up your company here in Estonia remotely. Nevertheless, we always welcome our clients to visit us in beautiful Tallinn to meet us and discuss your further plans with your Estonian company. 

Company Registration in Estonia with Wisor Group

Virtual Office and Contact Person Services: Ensuring Compliance and Accessibility

In accordance with the Estonian legal requirements, every company established within the country is obligated to fulfil specific criteria. Among these prerequisites, having a registered office address and a contact person who is a licensed service provider in Estonia stands as a cornerstone of compliance and accessibility. With current regulatory updates it is now also allowed to have a foreign legal address for your Estonian company, however in this case mandatory appointment of contact person is necessary. We will explain the Virtual Office Service topic in more detail below or you can review the services provided by Wisor Group.

Contact Person: Bridging Communication

As stipulated by Estonian law, having a contact person who is a licensed service provider, advocate, notary, attorney at law or notary office in Estonia, is essential in case of a non-resident managed company and in case the company does not hold an Estonian legal address. Contact person serves as a bridge between the company and regulatory bodies playing an important role in receiving official communication and documents on behalf of the company. This communication pathway promotes transparency and guarantees the accessibility and accountability of your company whenever the need arises.

Legal Address: Establishing Presence or not? 

Typically Estonian companies have Estonian legal addresses, but as mentioned above, Estonian companies now have the option to use a foreign legal address. This means the company doesn't have to rely solely on an Estonian address and can also receive mail at the foreign address. Having a foreign address requires appointing a contact person, as mentioned earlier.

Choosing a foreign address has its pros and cons. While it reduces the need for a physical presence in Estonia, it might also raise questions about taxes and regulations. It's important to think carefully before making this decision.

Alternatively, you can opt for our virtual office services. Our services include a valid registered address where we handle, forward, and store your company's mail. This is a more practical solution compared to using post boxes as addresses. It's important to note that post boxes are not permissible as legal addresses, further emphasising the need for tangible presence.

Having a proper registered address is crucial for your company's official documents and communication. It establishes your company's presence and ensures compliance with Estonia's rules.

Wisor Group offers different options for fulfilling these legal requirements. Depending on your needs, we offer either contact person and/or legal address services with necessary mail forwarding. Our virtual office and contact person services effectively fulfil these legal requirements with accuracy.

Our Flexibility for Complex Structures

We are well-prepared to manage complex company setups, including registering companies with foreign corporate shareholders, dealing with multiple corporate and individual shareholders and accommodating numerous board members. Our service is always tailored to meet your distinct requirements. Our advisors will guide you through the legal requirements for complex structures and provide the necessary advisory for the setup. 

Share Capital

In accordance with Estonian laws, companies are required to have a minimum share capital of €0,01. However, as the shareholder's liability is still €2500, we advise you to state the same amount as the share capital. Our advisors will assist you in determining the appropriate share capital amount and guide you with the required contribution to the designated bank account.

Remote services

If you're interested in establishing your company in Estonia, but find yourself short on time to travel or prefer not to delve into legal intricacies, there's an option to remotely set up your company with our expert assistance. This can be achieved through either a power of attorney or using e-residency.

Opting for the power of attorney route entails visiting a local notary to sign a representation document designated to a Wisor Group legal advisor, who will oversee your company registration. This legal advisor will represent you during the notary process, ultimately securing the setup of your company.

On the other hand, e-residency offers a streamlined process. Our advisors can craft the application for company registration within the online commercial register. Once the application is ready, our team will guide you through digitally signing the petition. This efficient process typically leads to the registration of your company on the very same day.

Expert Guidance for Seamless Company Registration in Estonia

At Wisor Group, our focus is on providing customised solutions that match the changing business environment. Whether you choose direct company registration or utilise the e-residency program, our advisors ensure your transition into the Estonian business environment is smooth, compliant, and aligned with your vision. 

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FAQ about Company Registration in Estonia

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1. What are the types of companies that can be registered in Estonia? 

Estonia offers various types of companies, including private limited companies (OÜ), public limited companies (AS), sole proprietors (FIE), and partnerships amongst foundations (SA) and non-profit organisations(MTÜ). 

2. What kind of company type should I choose? 

In case you are looking to set up a small or medium sized business (either a 1-man company or with multiple partners) we advise you to set up an OSAÜHING (private limited company) in Estonia. In case you are looking to go public, you should think about setting up a AKTSIASELTS (public limited company) and in case you are looking for a foundation or an NGO, we advise for SIHTASUTUS or MITTETULUNDUSÜHING, which are considered non profit foundations/organisations. Wisor Group can assist you in choosing a suitable company type and setting it up compliantly. Please see ordering forms for E-resident company, Company in your name and NGOs. Should you need anything else, please contact us through our general inquiry form. 

3. What is the minimum share capital required for company registration in Estonia? 

The minimum share capital requirement for private limited companies (OÜ) is €0.01. However, as the shareholder's liability is still €2500, we advise to state that amount as the share capital. 

4. Can foreigners or non-residents register a company in Estonia? 

Yes, non-residents and foreigners can register a company in Estonia. There are no limitations as to who can set up a company in Estonia. Many also prefer setting up the business through the e-residency, however it is not a mandatory requirement to set up a company in Estonia. 

5. What is e-residency, and how does it relate to company registration? 

E-residency is a digital identification program offered by the Estonian government, allowing non-residents to access Estonian services and establish a company online, as well as to sign agreements and other documents digitally. 

6. Do I need physical presence in Estonia to register a company? 

No, physical presence is not always required. Furthermore, Estonian companies can also have foreign legal addresses (in this case Estonian contact person must be appointed). Wisor Group can help you decide whether you would require a physical presence and we can provide you with all the necessary, such as legal address with mail handling in Estonia, contact person services and also local substance services.  

7. What is a contact person, and why is it required? 

Having a contact person who is a licensed service provider, advocate, notary, attorney at law or notary office in Estonia, is essential in case of a non-resident managed company and in case the company does not hold an Estonian legal address. 

8. What is a legal address, and why is it required? 

A legal address is the physical address of the company's registered office. It's necessary for receiving official documents and communication from authorities.

9. Can I use a foreign legal address for my Estonian company? 

Yes, as of a recent change in law, Estonian companies can now use a foreign legal address. However, appointing a contact person within Estonia is mandatory when choosing a foreign legal address.

10. What are the steps involved in registering a company in Estonia? 

The steps include choosing a company type, preparing necessary documents, selecting a legal address and contact person, determining share capital, submitting an application, and registering the company with the Commercial Register.

11. Can I register an Estonian company without an e-residency card? 

Yes, you can. That is what the majority of the people do when opening Estonian companies.

12. Can I set up my company in Estonia remotely? 

Yes, it is possible to set up the company in Estonia remotely, this is generally done via Power of Attorney (POA). Wisor Group legal advisors will represent you in the notary for the company setup and ensure that the company is registered properly in your name. Alternatively, it is possible to set up a company in Estonia remotely via e-residency. 

13. What is the timeline for company registration in Estonia? 

The company registration process can take up to 5 business days after signing everything at the notary. E-residency company setup takes usually 1 day after all parties have signed the petition online. These timeframes are indicative and apply in cases when all documentation is ready by the client by the time of the registration application. 

14. What taxes and obligations do registered companies have in Estonia?

 Estonian companies do not have corporate income tax on revenue. Estonian companies are taxed for profits only in case dividends (profits taken out) are paid. In this case the 20% corporate income tax rate applies. Estonian companies are also subject to 20% VAT and different salary taxes in case of employees. 

15. Can I register a company with complex structures, such as multiple shareholders or board members? 

Yes, company registration in Estonia can accommodate various complex structures, including multiple shareholders, board members, and even foreign corporate shareholders. Our professional advisors can guide you through the process.

16. How can professional corporate service providers assist with company registration in Estonia? 

Experienced service providers can offer guidance on legal requirements, document preparation, contact person and legal address services, share capital determination, and navigating complex company structures.