GENERAL INFORMATION ON ESTONIAN COMPANIES
The most common legal form of companies in Estonia is PLC (Private limited company). PLC is a limited liability company with a simple structure and a minimum amount of contributed capital (2,500 EUR).
Less commonly used are JSCs (joint-stock companies), whose capital should be at least 25,000 EUR and, in addition to the executive body (Management Board), such companies should also have a Board of Directors.
It is important to know that:
1. If the place of residence of the company director is not Estonia, another country of the European Economic Area or the Swiss Confederation (non-resident), then, according to the legislation of the Republic of Estonia, it is required to appoint a local representative. We can provide you with such a service of local representative.
2. The director (member of the board) may not be paid.
3. The legal address of the company must be local. We can also provide a legal address service if you do not have one. When ordering both services for legal address and local representative, we provide a discount.
4. The company must submit a report on its activities, regardless of geography of activity.
We help clients with routine work, allowing them to concentrate on basic production and commercial operations.
We provide the following administrative services:
Providing a legal address (virtual office) in Estonia
Ordering the necessary documentation from the Commercial Register (extract, charter)
Ordering the necessary documentation from the Tax Department (residency certificate, double tax avoidance certificate, certificate of tax debt absence)
Notarized translation of documents
Legalization, apostilization of documents
Organization of negotiations with customers, banks, partners, employees
Assistance in contacts with tax and state institutions
VAT (VAT/Turnover tax)
It is necessary to register as VAT taxable if the person’s taxable turnover has exceeded 40,000 euro since the beginning of the calendar year. From the moment the above-mentioned turnover reaches 40,000 euros, the legal representative of the company must submit a statement to the tax administrator about registration as taxable within three days.
A person has the right to submit to the tax administrator an application for his registration as taxable even when the registration obligation has not yet arisen, however in this case the person must prove that he is engaged in entrepreneurship or starts business in Estonia. Otherwise, the person may be refused a VAT number.
You can prove your activity by:
1. Agreements with buyers and suppliers, draft contracts, written agreements, correspondence with suppliers/customers, which reflects the intention to purchase/sell goods/services;
2. Bank statement, which shows that payments were received from buyers or payments were made to suppliers;
3. Business plan;
4.The web-page of the company, which lists the goods and services that the company offers.
As practice shows, correctly provided evidence can boost the process of obtaining a VAT number. The Tax and Customs Board employees pay a particular attention to those companies whose legal representatives are non-residents, due to the frequent cases of tax evasion in the EU countries.
We are ready to provide professional support and assistance in applying for obtaining a VAT number for your company.
EORI (ECONOMIC OPERATORS REGISTRATION AND IDENTIFICATION SYSTEM)
EORI number is obligatory for entrepreneurs engaged in foreign trade and having the number(s) of person(s) taxable on VAT in other European Union member countries. From July 1, 2009, entrepreneurs are required to indicate such a number (s) in the EORI application for import, transit, export or other customs procedures in order to identify entrepreneurs in the entire European Union.
A legal representative of a legal entity can apply for an EORI number.
Our experts will provide proper support in the procedure for obtaining EORI numbers.
Economic activity requires registration in the Register of Business Activities. To conduct certain types of activities, obtaining an activity permit (license) is required.
Liquidation and termination of activity
When it comes to the realization that this or that investment does not reap more profits, and it would be more reasonable to refuse it, the question concerning the termination of the company arises by itself. To do this, the law provides for the liquidation of the company, during which the company ceases its operations.
Liquidation procedure is a long process which lasts at least 7-8 months and consists of the following stages:
The decision of the owners on the liquidation and appointment of a liquidator is made. At least one liquidator must reside in Estonia. After the decision is made, it is allowed to carry out only those activities that are necessary for liquidation.
A notarized application for liquidation and the appointment of a liquidator shall be submitted to the Commercial Register, signed by a member of the Board with the right to sign, and the liquidator(s).
Within 3 months after the decision is made, an initial liquidation balance sheet, an explanatory report and a report for the financial year are prepared, which shall be approved by the decision of the competent authority, and then submitted to the Commercial Register.
4 months after the publication of the liquidation notice in the Official Gazette, and after the creditors’ requirements are satisfied, a final liquidation balance sheet and a plan for the distribution of the rest property are made available to the owners for review.
After the liquidation is completed, but not earlier than 6 months after the liquidation is submitted to the Commercial Register and the notice is published, and 3 months after the final liquidation balance sheet and the distribution plan for the rest property are submitted for review to the owners, the liquidator shall submit to the Register a notarized statement of the company’s removal from the Register.
Drawing up the initial balance and the final balance are not included in the liquidation service (as a rule, this is done by the client’s accountant).
If the size of the creditors’ claims exceeds the size of the property of the enterprise, then in order to satisfy these requirements, the liquidator shall immediately apply for bankruptcy, together with an explanation of financial insolvency and a list of creditors.
In some cases, an alternative to liquidation may be a merger (in which affiliated or merging partnerships are considered terminated without liquidation proceedings) or division (in which a partnership divided by separation is considered terminated without liquidation proceedings).