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Step-by-step regulatory requirements organized by timeline phase
Non-Estonian founders apply for e-Residency through the Police and Border Guard Board to access digital signature and online services. Issued at Estonian embassies or pickup points worldwide.
Open Business Bank or Payment Account
Open a corporate account with LHV, SEB, Swedbank, or a fintech (Wise Business, Payoneer). Non-resident e-Residents typically use fintech providers since traditional banks require Estonian residence.
Apply for Residence Permit for Non-EU Staff
Non-EU employees need a residence permit for employment from the Police and Border Guard Board. Top Specialist track and Startup Visa programme are streamlined options for tech firms.
Apply for Sector Licences
Crypto service providers (FIU), payment institutions and e-money licences (Finantsinspektsioon), and gambling (EMTA) require authorisation before launch.
VAT registration is mandatory once 12-month turnover exceeds EUR 40,000 or for intra-EU acquisitions over EUR 10,000. Standard rate 22% (raised from 20% in 2024).
Register Employees with TÖR (Employment Register)
Register each employee in the Employment Register before the first day of work. Includes commencement, suspension, and termination data; mandatory for all forms of employment.
Set Up Accounting under Estonian Standards
Maintain accounting records under Estonian Accounting Act and Estonian Financial Reporting Standards (or IFRS). Most e-Residents use cloud accounting tools (Xolo, Envoice, SimplBooks) plus a local accountant.
Beneficial Ownership Register
Submit beneficial owner data to the e-Business Register and update within 30 days of any change. Mandatory under EU AMLD transposition.
Monthly Income Tax and Social Tax Declaration (TSD)
File Form TSD with MTA by the 10th of each month declaring withholdings on salaries, fringe benefits, and contractor payments. Pay social tax 33% and income tax 22% withheld.
Monthly VAT Return (KMD)
Submit VAT return and pay net VAT by the 20th of the month following the tax period via e-MTA. EU sales list (VD) due simultaneously for intra-EU B2B sales.
Annual Report to Business Register
File annual report (financial statements + management report) with the e-Business Register within 6 months of financial year-end. All companies required regardless of size.
Distributed Profit Tax (when paying dividends)
Estonia taxes only distributed profits at 22/78 of net distribution (effective 22% on gross). Reinvested profits are tax-free. Reduced 14/86 rate available for regular dividend payers (3-year average).
Audit Threshold Check
Statutory audit is mandatory once the company exceeds 2 of 3 thresholds (revenue EUR 4 million, total assets EUR 2 million, average 50 employees) or any one of higher thresholds. Review audit obligation annually.