Advantages of the estonian jurisdiction for doing business
Even if you are a non-resident you can still own 100% of shares of an Estonian company. Thus a citizen of a country outside EU may, without any obstacles, be a founder, management board member in Estonia.
To register a limited liability partnership (OÜ) in Estonia one founder is enough.
When registering the OÜ there is no need to pay out the share capital. When the data is entered into the registry the share capital is declared (the minimum share capital is 2500 euros) with a period for paying it from one year to eternity. During the period while the capital is not paid up, the owners is liable with his own assets in the amount of the share capital. The share capital must be paid up in full prior to the first distribution of profits (payment of dividends)
There is no corporate income tax in Estonia! Only funds taken out of the company (dividends) are taxed. Thus, the company profits may be reinvested without any less, as in Estonia there is no corporate income tax or tax for reinvested profits. Dividends (distributed profits) are taxed at a rate 20/80 (25% netto). If the dividends in the previous/prior years were already distributed, a lower tax rate (16/84) may be used for part of the paid out dividends. This part depends on the amount of dividends paid out in previous years.
Thus, Estonia, is in no way considered and offshore. But at the samet ime Estonia is a country with a unique tax payments system when it comes to company profits.
By being a member of EU, Estonia has access to all of the European market and allows to use all the advantages of EU laws.
For example, when buying/selling goods to another company that has a taxpayer status in EU, a 0% VAT tax rate is used, or the tax is returned.
Estonia if a very comfortable place for everyday business operations. The price for banking services and internet-banking and bank corporate card is only 1,5 euros a month and even free for a period of up to one year following the banks campaign. For example, in Latvia they take up to 100 euros a month for such services.
Terminology in Estonia – limited liability company - OÜ.