Estonia has made a name for itself as a business-friendly country, especially for foreign entrepreneurs looking to start a company remotely. Through its innovative e-Residency program, Estonia allows non-residents to establish and run a company without ever having to set foot in the country. One common question that arises, however, is whether a founder needs a business or work partner to register a company in Estonia. The answer is no. A single founder can register a private limited company (OÜ) and hold 100% of the shares, making Estonia an attractive option for solo entrepreneurs.
In this article, we’ll break down the company registration process, the role of shareholders, and what you need to know if you’re a foreigner looking to start a private limited company (OÜ) in Estonia.
Private Limited Company (OÜ) in Estonia
The Private Limited Company (OÜ) is the most popular legal structure for businesses in Estonia, and it’s available to both residents and non-residents. This structure offers flexibility, especially for foreign entrepreneurs who wish to operate remotely. The key advantage of an OÜ is that it allows the founder to hold 100% of the shares, eliminating the need for a business partner or co-founder.
Here are the core features of a private limited company in Estonia:
- Founder Requirements: Only one founder is required to set up a private limited company, and the founder can be an individual or a legal entity. The founder can also hold 100% of the shares, meaning you don’t need to share ownership with a partner unless you choose to.
- Share Capital: The minimum share capital required is €2,500, but this can be deferred until the company begins distributing profits. In some cases, e-residents can start their company with €0 capital initially.
- Limited Liability: As with many limited companies, your personal assets are protected. The liability of the shareholders is limited to the amount of capital invested in the company.
Steps to Register a Private Limited Company in Estonia
1. Apply for Estonia E-Residency
If you’re a foreigner looking to register a company in Estonia, you must first apply for Estonia e-Residency. This digital identity allows you to access Estonia’s online services, including company registration, tax reporting, and banking.
- Application Process: The e-Residency application can be completed online and takes about 4-6 weeks for approval. You’ll receive a digital ID card, which will enable you to register and manage your company remotely.
2. Register Your Company Online
Once you have obtained your e-Residency, you can register your company using Estonia’s online Business Register. The registration process is straightforward and typically takes less than a day.
- Choose a Company Name: Make sure to check the availability of your desired company name through the Estonian business name database.
- Shareholder Structure: As mentioned earlier, you can register a company with only one founder holding 100% of the shares. If you wish to include co-founders or partners, you can allocate shares accordingly.
- Legal Address: Every company must have a legal address in Estonia. If you don’t have a physical presence in the country, there are service providers who offer virtual office addresses to fulfill this requirement.
- Company Registration Fee: The fee for registering a private limited company is approximately €265.
3. Open a Business Bank Account
After your company is registered, you’ll need a business bank account to manage finances. You have several options, including traditional Estonian banks and fintech solutions like Wise or Payoneer, which offer remote banking services without the need to visit Estonia.
4. Managing Your Company Remotely
Once registered, you can manage your Estonian company entirely online. From signing contracts to filing taxes, everything can be done digitally, making Estonia an ideal destination for digital nomads and remote entrepreneurs.
Ownership and Shares in an Estonian OÜ
One of the most important aspects of a private limited company in Estonia is that founders can hold 100% of the shares, giving you full control over the company. However, if you do decide to bring on partners or investors, the shareholding structure can be easily adjusted. Shareholders have limited liability, and their risk is limited to the amount they invest in the company.
Some things to keep in mind:
- Adding Partners: If you choose to add co-founders or business partners later, you can allocate shares through an agreement. This can be done easily via Estonia’s online platform.
- Selling or Transferring Shares: If, at any point, you wish to sell or transfer shares, it’s a straightforward process as long as all shareholders agree.
Do You Need a Partner to Register a Company in Estonia?
As we’ve covered, you don’t need a business or work partner to register a private limited company in Estonia. Solo founders can establish and run a company, holding 100% of the shares and managing all aspects of the business remotely. However, if you prefer to work with partners, Estonia offers flexibility in terms of adjusting the shareholding structure and distributing ownership.
Estonia is a Haven for Solo Entrepreneurs
Estonia’s forward-thinking approach to business registration and its e-Residency program make it one of the most accessible countries for entrepreneurs worldwide. With the ability to register and run a business remotely, Estonia provides an ideal environment for solo founders to thrive. Whether you want to maintain 100% ownership or bring in partners, the flexibility of Estonia’s business laws offers numerous advantages for foreign entrepreneurs.
For more information on the legal and ethical aspects of running a business in Estonia, check out our guide on Business Law and Ethics in Estonia: A Guide for Global Entrepreneurs.