For a foreign entrepreneur who does not live in Estonia, the simplest route is usually to establish an Estonian private limited company (OÜ) using e-Residency. The entire process can be handled remotely once the necessary digital identity is available.
The simplest structure: an OÜ
For most entrepreneurs, the appropriate legal form is an osaühing (OÜ), roughly equivalent to a private limited company.
An OÜ can be established by a natural person or a legal entity, and the current minimum share capital is only €0.01. The state fee is €265 (service fee will be added). An OÜ must have a management board and must submit an annual report.
The €0.01 minimum should not necessarily be interpreted as the recommended amount of capital for every business. The appropriate capital depends on the company’s activities and financing needs.
The most convenient route for a foreign founder
If you are not an Estonian resident, the practical route is:
e-Residency → Estonian OÜ → registered address/contact person → business account → accounting and tax compliance.
Estonia’s e-Residency programme provides a government-issued digital identity that allows eligible foreigners to access Estonian digital business services. It does not, however, give you Estonian citizenship, tax residency or an automatic right to live in Estonia.
Step 1: Apply for e-Residency
If you do not already have an Estonian digital identity, apply for e-Residency.
Once approved, you receive an e-Residency digital ID card that can be used for secure digital authentication and signing.
The important point is that e-Residency is primarily a digital business identity, not an immigration programme. It does not automatically change your personal tax residence.
Step 2: Choose your company name
Before registering the company, choose a name and check whether it is available.
The name should be distinguishable from existing Estonian companies and should also be checked against relevant trademarks. Estonia’s Business Register provides tools for checking company names before registration.
It is also sensible to check the corresponding domain name and social-media handles before committing to the company name.
Step 3: Arrange an Estonian legal address or contact person
A foreign founder generally needs an Estonian legal address or, depending on the circumstances, a licensed Estonian contact person.
This is where using an Estonian service provider can make the process considerably easier. Providers commonly offer a package combining a legal address/contact person, company formation and accounting.
The Estonian e-Residency programme currently indicates typical pricing of approximately €200–€400 per year for a contact-person/legal-address service, although prices vary by package.
This is often the most convenient option for a founder who has no physical office in Estonia.
Step 4: Register the OÜ online
Once you have the required digital identity, you can register the company through Estonia’s official e-Business Register.
The registration process consists essentially of preparing the application, digitally signing it, paying the state fee and submitting it. The official e-Residency guidance estimates approximately 15 minutes to one hour for the online registration process itself.
The state registration fee is currently €265.
In straightforward cases, this means you can create the company without travelling to Estonia.
Step 5: Open a business account
After incorporation, you need an account through which the company can receive and make payments.
For internationally operated businesses, an EEA-based fintech or business-payment provider can sometimes be more convenient than a traditional bank. Estonia’s e-Residency programme specifically notes that e-residents can consider EU-licensed fintech providers as well as banks in Estonia or elsewhere in the EEA.
However, opening a financial account is not guaranteed simply because you have an Estonian company or e-Residency. Financial institutions conduct their own compliance and know-your-customer checks.
Your country of residence, nationality, business model, customers, expected transactions and source of funds can all affect the result.
Step 6: Set up accounting
This is the part that should not be overlooked.
An Estonian company is still a real company with accounting and reporting obligations. All Estonian companies, including dormant companies, must submit an annual report.
For a small online business, the most convenient solution is often to use an accounting service that integrates with your company’s banking and accounting systems.
A typical outsourced setup might include:
- bookkeeping;
- annual report preparation;
- VAT returns, if applicable;
- payroll reporting, if you have employees;
- tax calculations;
- assistance with the Estonian Tax and Customs Board.
This is generally easier than trying to manage Estonian accounting yourself unless you already understand the local requirements.
Please see our accounting prices here: https://parenzolaw.com/en/services08/
What about VAT?
VAT registration is not automatic when you establish an Estonian company.
As of 2026, the mandatory VAT-registration threshold is generally €40,000 of relevant annual turnover, although the precise application of the rules depends on the nature and location of your transactions. Voluntary registration can also be possible.
Please notice: e-Residency does not eliminate your home-country taxes
Creating an Estonian OÜ does not automatically make you an Estonian tax resident.
If you live and work in another country, that country may still consider you personally tax resident there. It may also impose taxes on your salary, dividends or other income.
There can also be corporate tax issues if the company is effectively managed from another country or creates a permanent establishment there.
Alternative: Open an Estonian Company by Power of Attorney
If you do not want to apply for e-Residency or prefer to delegate the incorporation process to a lawyer, there is another convenient option: opening an Estonian company by power of attorney.
In this case, you do not need to travel to Estonia personally. The incorporation procedure can be handled by a lawyer acting on your behalf under a notarised power of attorney.
The practical process is:
Power of Attorney → documents sent to Tallinn → preparation of company details → notarial appointment → registration of the OÜ.
Step 1: Receive the Power of Attorney template
Our lawyer will prepare and send you a template of the power of attorney.
The document will authorise our lawyer to represent you before the Estonian authorities and a notary and to complete the necessary steps for establishing your company.
You will need to sign the power of attorney in accordance with the applicable local requirements.
Step 2: Notarise and apostille the Power of Attorney
In most cases, the power of attorney must be notarised and apostilled. The apostille applies where the country in which the power of attorney is signed is a party to the Hague Apostille Convention. If the signing country is not a party to that Convention, the document will instead need to be legalised through the applicable consular procedure.
The exact document requirements may depend on the country where you are signing the power of attorney and the applicable international rules.
Once the document has been properly notarised and, where required, apostilled, it should be sent to our office in Tallinn.
Step 3: Send the original document to our Tallinn office
The original power of attorney is sent to our office in Tallinn.
Once we receive the document, our lawyer can proceed with the next steps and arrange an appointment with an Estonian notary.
This means that you can complete the necessary formalities in your country of residence while our team handles the Estonian part of the procedure.
Step 4: Provide the company details
Before the notarial appointment, you provide us with all the necessary information about the company.
This normally includes:
- proposed company name;
- business activities;
- shareholder information;
- management board information;
- share capital;
- registered address;
- other information required for preparing the incorporation documents.
Our lawyer will use this information to prepare the documents required for the incorporation procedure.
Step 5: Notarial incorporation in Estonia
After receiving the power of attorney and the necessary company information, we book a time with an Estonian notary.
Our lawyer represents you at the notarial appointment and completes the incorporation formalities on your behalf.
You therefore do not need to travel to Estonia to attend the appointment personally.
How much does it cost?
The cost of opening an Estonian company by power of attorney through our office is approximately €750–€950.
The exact price depends on the circumstances and the required procedure.
The price includes the state fee and notarial expenses related to the incorporation.
Please note that the costs of preparing, notarising and apostilling the power of attorney in your country of residence may be additional, depending on the local requirements.
Who should consider this option?
Opening a company by power of attorney can be particularly convenient if:
- you do not have an Estonian e-Residency card;
- you do not want to travel to Estonia;
- you prefer to have a lawyer handle the incorporation procedure;
- you want professional assistance with the notarial process;
- you need to establish the company while remaining in your country of residence.
This option allows you to delegate the Estonian incorporation procedure to a local lawyer while you complete the document formalities in your own country.
e-Residency or Power of Attorney?
There are therefore two practical ways for a foreign entrepreneur to establish an Estonian OÜ remotely.
With e-Residency, you obtain an Estonian digital identity and can manage many company-related procedures yourself online. This can be particularly convenient if you expect to manage the company yourself over the long term.
With a power of attorney, you delegate the incorporation procedure to a lawyer. This can be more convenient if your immediate objective is simply to establish the company and you prefer not to deal with the Estonian digital registration and notarial process yourself.
The appropriate option depends on how you intend to manage the company after incorporation and whether you already have an Estonian digital identity.
This article is provided for general informational purposes only and does not constitute legal advice. It does not create an attorney-client relationship, and it should not be relied upon as a substitute for advice tailored to your specific circumstances. Procedures, requirements, and costs described above may vary depending on the applicable jurisdiction and the specifics of each case, and may change over time. For advice on your particular situation, please contact our office directly.
