In this post, we describe how to launch your European business in Estonia using our services, without hassle, red tape, and without even visiting Estonia!
First of all, if you are wondering what is the e-Residency program, why it is so interesting for location independence startups, freelancers, and entrepreneurs, or why you should open a business in Estonia, we recommend you to read those articles first. We’ll be waiting for you when you come back.
You’re back already? great, let’s go then! 🙂
The Four Steps for Starting your Company in Estonia
I mentioned that you need to be an e-Resident before registering a company in Estonia, but you can actually start the process right away before even applying for e-Residency. Here’s how to do it.
Looking for the name of your company
First thing you need to do is Going to the registration page. We made it super simple to register your company, so you will be able to do it in less than five minutes!
The first step is checking the the name of your company is not already registered, or there’s no European trademark with a similar name.
The name of your company should be unique and distinctive from other company names. It should also be different from any registered European or Estonian trademark, unless you get explicit and notarized consent from the owner.
The fact that you can just look for the name of your company easily on a website, and for free, is certainly an advantage when compared to other business systems that require you to ask if the name of your company is free to the authorities. Usually you need to pay a fee for that request. In Estonia, it is as simple as searching for it on a website or asking for that information to your service provider.
If there’s a similar trademark name, or a matching company name, you will be asked to provide another name. If there’s no similar trademark, but there are some similar company names that may present some problems in the registry, you will receive a warning. Otherwise, you will be able to continue to the next step.
Filling in your company data
Next, you will be asked to add the information about the shareholders, board members and companydata.
First, you need to add the information about the members of the company. For each person you add, you decide if it’s going to be a shareholder, member of the board, or both. You can also specify that this person will be the representative of the company (for accountancy and business related subjects).
If the members of the company have their e-Resident IDs already, that’s good news. They will be able to enter them and sign the company registration right away. If not, don’t worry, you will be able to add their birth date to make sure the signatures are issued to the right person.
Then you need to specify the activity of your company, and also its means of communication (such as email and phone number).
Overview and payment
Next, you will be taken to a screen to verify that all the information is correct. Make sure to check everything, because the price of the company registration will be different under certain circumstances, such as multiple members, or in the case of crypto companies.
If you need to change anything, you will be able to do so by going back using the buttons at the bottom left. If, on the contrary, everything looks fine to you, just proceed to payment.
Becoming an Estonian e-Resident
That’s all! If all the members are e-Residents, the company registration will take around 48 hours average!
If some of the company members are not e-Residents yet, they need to apply at the official e-Residency website. Once their applications are approved, they will need to wait until all of them have their ID card in their hands. It usually takes 3-4 weeks, so be patient!
You can go directly to the official e-Residency application website and register as an e-Resident in a few clicks. You will need to fill in some information about you, your citizenship, date of birth, personal data, and upload some pictures of your ID or passport and your face.
Signing the company registration and services contract
Finally, when all the members have their e-Residency cards, they will be able to digitally sign the company registration and services contract. This step is important to really guarantee the consent of all the members, and the fact that they have their e-Residency IDs.
Then, after this step is complete, they will proceed to enter the company in the business registry. Easy, right?
The registration process is really fast. You are asked to confirm your company email and sign the application. In just 24 to 48 hours, your company will be registered, and you will receive the official document that contains the registration code of your company.
This registration code, alongside the name and address of your company, identifies your company, and you should include it on every invoice you issue to your customers.
Then, you just need to open your bank account.
Next, we’ll prepare the VAT request to register your company in the European VIES archive and get a VAT number. To finish this step, we’ll need your company to already have a valid bank account (we need to add your company’s IBAN number to the request).
As part of this process, we’ll ask you to grant us a power of attorney to do the bookkeeping and accountancy for your company, and also to submit the VAT application. This can be done completely online, without the presence of a notary, and you can revoke it at any time.
Finally, during this stage, we can also -under request- sign you up as an employee (board member) of your own company so that you can receive salaries. This step can be done anytime later.
Do I need to register as a VAT operator to invoice my customers?
Not at all. Your company in Estonia can invoice and be invoiced by any other company or individual anywhere in the world. You just need to provide your company’s name, registration code and physical address.
In fact, you are only required to register as a VAT operator if one of the following conditions apply:
- If your company offers services such as development, design, consulting, marketing, etc., to European customers, and your revenue is more than 40,000 euros per year.
- Also, if you offer digital services or products (software or digital content) to European B2C customers (final consumers) from the first sale.
- Finally, if you offer digital services or products (software or digital content) to European B2B clients (company to company) from the first sale, and your revenue goes beyond 40,000 euros per year.
That is, if you, for example, offer IT consulting services, and your revenue is less than € 40,000 per year, you do not need it. On the other hand, if you have an online store, you need it from the beginning.
All things considered, a VAT number is always a good idea if you plan on selling or offering products to European customers.
How is the application process for the VAT number?
In general, you have to justify that granting you a VAT number makes sense. This means that for example, your company will have European sales to final consumers, or your client portfolio indicates that you will earn more than 40,000 euros by the end of the year.
Choosing the best banking solution.
There are basically two alternatives to operate after setting up your company in Estonia.
First, you can open an account in a traditional bank like LHV. LHV is an Estonian bank that works with e-Residents, and if you can show some commitment to bringing business and establishing a closer relationship with Estonia, they’ll have no problem in opening a bank account for your company. There are two important inconveniences you need to be aware.
One of them is their fees. They charge 20€/month to e-Residents for a business bank account. Also, you will have to make a trip to Estonia so they get to know you personally.
All banks need to comply with a policy called KYC (Know Your Customer), to verify that your company is not involved in money laundering or criminal activities. Fortunately, in the case of LHV, you can make the visit before the company is created.
Here we tell the story of how an entrepreneur opened his account in LHV.
The second alternative is using a digital banking provider, such as Transferwise. Basically they are online banking services that offer you an account, with IBAN and Swift, that will allow your company to operate completely online. Most of them also provide you with a debit card for your company.
We discuss the best digital banking alternatives in this post.
And that’s all! Once you have your e-Residency card with you -a process that takes 3-6 weeks- your company can be ready in a matter of 5-10 days, including bank account and VAT number.
Then, it’s time to focus on your business! In Your Company In Estonia, we can take care of your accountancy, bookkeeping and taxes (including payrolls and VAT returns), so you can take care of growing your business. You can have a look at our prices here.
In this article, we describe the steps to launch and run your European business with us, completely online. Powered by the e-Residency program, our services allow you to run a hassle-free business that grants you location independence. Without red tape, without worries, and without even having to visit Estonia!
For freelancers, freelancers, entrepreneurs, and especially digital nomads, it is the perfect solution to have a European, global, borderless business you can manage completely online.