Yes, Estonia is the most suitable place to establish your business. For any IT company, it’s like a dream to set up a business in Estonia, as it is known for the wide spread free Wi-Fi connection.
The biggest contribution to the world of information technology is the Skype. The whole world is familiar with voice and conference chat software, which was recently taken over by Microsoft. Most of the Estonians are proud of this achievement.
According to the commercial needs, there are five options of registering a business, which is done by the general registrar. The different types of businesses are private limited company, public limited company, general partnership, limited partnership, or commercial association.
The most popular type of business organization that can be established in Estonia by a foreigner is private limited companies. Setting up a business in Estonia is very easy as well as inexpensive. Tax system is also quite tolerable.
The government only charges corporate income tax. In recent year, government encourages more and more people to establish the private limited company. The online registration for establishing a new company is done within 30 minutes.
The country examines the procedure, cost and time involved in establishing a new company or an industries. They also analyze that the business should start up with the 10 times the per capita gross income of the nation. Following are the procedures of lauching a business in Estonia.
Proposed company name: The commercial registrar can refuse to register a company if its name is similar to other business. Thus, before proposing a name, the entrepreneur must check its uniqueness by researching online.
Initial Down payment: If the share money is higher than EUR 25,000, then the entrepreneurs need to pay it in bank. If the share capital is less than EUR 25,000, then the registration amount need not be borne by the shareholders.
Registration application online: The cost for the regular registration is EUR 140.60. However, if you want to quick registration, then you need to pay EUR 185.34. Separate registrations with the national social insurance are not required. The rate of social tax is 33%. This tax must be paid by the tenth day of the registration month.
If the company started the operation in the area subjected to special requirement, then it has to pay taxes at the registration of economic activities. For that, a company needs to pay EUR 19.17, and it will take at least 5 days to get registered.
Register as a VAT payer at the Estonian national tax board: A company needs to register as a genuine VAT payer, if the turnover comes under those criteria, except imports of goods. You will need to pay EUR 16000 for the VAT registration.
Registration is made with the central sick fund: In Estonia, health insurance is provided to the employees by collecting the social tax from the employers. For that the company has to register with national sick fund. Health insurance in Estonia is compulsory under which employer is required to pay social taxes regularly.
All of the above requirements when met, you can successfully set your business in Estonia.
James Patrick has written many articles on how to start a business in Estonia, and he works with registrar’s office. They help their clients in setting of businesses and procuring licenses to run a successful business in the country. Please visit their website for more info.