Founding an OÜ in Estonia: capital, articles, name, fees and first steps

A private limited company (osaühing, OÜ) is the usual vehicle for a small Estonian business and for e-Residents. It can be founded online in the e-Business Register in about a day, with a share capital as low as one cent. This guide covers the choices at founding and the duties of the first weeks.

In short

• There is no fixed minimum capital: the smallest share is one cent. The capital is paid in full before the application is filed.
• The state fee is 265 euros in the expedited online procedure with the standard articles, and 200 euros in the ordinary procedure.
• Tailored articles (share classes, transfer restrictions) need a notary at founding.
• The name must contain "OÜ" or "osaühing" and be clearly distinguishable from registered names.
• A licence or a notice of economic activity is needed only where a specific law says so, and then before the activity starts.
• In the first weeks: bank account, beneficial owners, accountant access, VAT decision, employment register, bookkeeping.

Share capital

There is no fixed minimum. The smallest share has a nominal value of one cent, so an OÜ can be founded with 0.01 euros of capital per shareholder (Commercial Code § 136, § 148). The founders pay for their shares in full before the registration application is filed, and the payment cannot be set off against claims on the company (§ 140(2)-(3)). Founding without paying in the capital is no longer possible.

A very small capital is legal, but it has costs:

• If the capital is below 2,500 euros and the company's other assets cannot pay the interim trustee, the interim trustee can claim the trustee's fee and expenses from the shareholders, up to the difference between the capital and 2,500 euros (Bankruptcy Act § 29(9^1)). This is not a liability for the company's debts.
• Banks, landlords and suppliers read the capital as a sign of credibility.
• If the net assets fall below half of the share capital, the shareholders must act: change the capital, restore the net assets, or wind up the company (Commercial Code § 176). The test is against half of your own capital, whatever its size.

The capital does not decide the audit duty: that depends on revenue, assets and staff (Auditors Activities Act § 91).

Paying in the capital

A contribution is in money unless the articles allow a contribution in kind (Commercial Code § 140(1)). The founders open an account in the name of the company "in founding" with a bank or payment institution in the EEA (§ 141, § 520).

• Up to 50,000 euros: no bank certificate. The board members confirm in the application that the money has been paid (§ 144(2¹)).
• Above 50,000 euros: a notice of the bank is attached (§ 144(1)). In the expedited procedure the money goes as a deposit to the registrar's account, or to a restricted bank account under the Money Laundering and Terrorist Financing Prevention Act § 27(2) (§ 520(4¹); Commercial Register Act § 42(3)). A deposit with the registrar must be claimed back within one year of registration, otherwise it goes to the state.
• In kind: any transferable asset with a money value, but never work or services (§ 142). The board values it, and an auditor checks the valuation when the capital, or the share paid for in kind, is at least 25,000 euros (§ 143). A contribution in kind rules out the expedited procedure (Commercial Register Act § 42(3)).

Never confirm a payment that has not been made. Founders and board members are jointly liable for false data at founding (Commercial Code § 146). File within a year: the company is not registered if the application comes more than a year after the founding agreement (§ 144(4)).

Articles of association

The articles state at least the name and seat, the share capital, how shares are paid for, any special rights of shares, the valuation of contributions in kind, any reserve capital, and the number of board members (Commercial Code § 139(1)).

The standard articles of the portal are set by regulation (§ 139¹). They cover a plain company with a fixed capital and money contributions, and the founders cannot add clauses. You need your own articles when you want, for example:

• share classes, preferences or different voting rights (§ 148(3));
• restrictions on share transfers (§ 149(3));
• a supervisory board, or a fixed term for board members;
• contributions in kind, or a minimum and maximum capital.

Own articles at founding need a notarially certified founding agreement (§ 138(4)-(5)). A company founded with the standard articles can adopt its own later, by a two-thirds majority of the shareholders, effective on entry in the register (§ 175). Adding a restriction on share transfers later needs the consent of all shareholders, unless the articles say otherwise (§ 149(3)). A shareholders' agreement binds only its parties; rules that must bind the company or future shareholders belong in the articles.

State fees and time

Related fees: reserving a business name costs 150 euros, and each later change of the register data of an OÜ costs 25 euros (State Fees Act § 62¹, § 63).

The founding application is filed by the board and signed in the portal by every founder and board member (Commercial Code § 144). The register accepts signatures with an Estonian ID card, an e-Residency card, Smart-ID or Mobile-ID (e-Business Register; founding guide of the registrar). A founder without one of these signs at a notary.

The business name

• It contains "osaühing" or "OÜ" at its start or end (Commercial Code § 9).
• It is clearly distinguishable from names already registered or reserved in Estonia (§ 11).
• It does not mislead, does not use a protected trademark without consent, and is written in the Estonian-Latin alphabet (§ 12).

A name can be reserved for six months (§ 15¹) for 150 euros (State Fees Act § 62¹). The name, seat and registry code must appear on business documents and the website (§ 15(2)).

Changing the name is an amendment of the articles: a shareholder decision by two thirds, filed in the portal, effective on entry, for a 25 euro fee (§ 175). The registry code and the VAT number stay the same.

Activity codes, notices and licences

At founding you state the planned main activity with a code of the Estonian classification of economic activities (EMTAK). Later, the activities are updated through each annual report (Commercial Code § 4). Choose the code by what the business actually does.

Economic activity is free by default (General Part of the Economic Activities Code Act § 4). Only where a specific law requires it:

• a notice of economic activity is filed before the activity starts (§ 14);
• an activity licence must be granted before the activity starts (§ 16). For example, trust and company service providers need a licence of the Financial Intelligence Unit (Money Laundering and Terrorist Financing Prevention Act § 70).

The special act of each field decides. Check it before you start; the register accepting a code is no clearance.

A company as founder

Any natural or legal person can found an OÜ, alone or with others (Commercial Code § 137). A legal person cannot sit on the board, so the parent appoints an individual (§ 180(2)).

• An Estonian parent founds through its board member in the portal, and the expedited procedure is available.
• A foreign parent proves its existence and its representation with an extract of its home register, apostilled or legalised and translated into Estonian by a sworn translator (Commercial Register Act § 8, § 40). The application usually goes to the ordinary procedure or to a notary.

Every new OÜ declares its beneficial owners with the registration application: the natural persons who ultimately control it (Money Laundering and Terrorist Financing Prevention Act § 9, § 77). If the company's address is abroad, a contact person is required; see e-Residency, the legal address and the contact person.

Sole proprietor or entrepreneur account

• Entrepreneur account (ettevõtluskonto): for a person with small income and few costs. The bank withholds 20 percent of each amount received, with no accounting and no expenses (Simplified Business Income Taxation Act § 4). The holder may not be registered for VAT (§ 2(2)).
• Sole proprietor (FIE): business expenses are deductible, but the owner answers for business debts with all personal assets (Commercial Code § 78), and as a rule pays social tax on at least 12 times the monthly rate each year (Social Tax Act § 2(5)).
• OÜ: limited liability (Commercial Code § 135). Retained profit is not taxed; corporate income tax is paid when profit is distributed (Income Tax Act § 50).

Read the full comparison: the entrepreneur account or an OÜ.

Holding company or direct ownership

The venture's operating profit is taxed once, when the venture distributes it, whoever owns the shares (Income Tax Act § 50(1)). What a holding company adds is deferral:

• A dividend the holding receives from a subsidiary of which it owns at least 10 percent can be passed on without a second charge, or kept and reinvested (§ 50(1¹)).
• A gain on selling the subsidiary's shares stays untaxed in the holding until it is distributed. A founder who owns the shares directly pays 22 percent on the gain in the year of sale (§ 15).

Direct ownership is simpler for outside investors and employee options. In both cases the owner is not liable for the company's debts (Commercial Code § 135). A parent that gives instructions to its subsidiary can, however, become liable for its debts when it does not act once the subsidiary's insolvency becomes likely (§ 6¹).

An OÜ may not lend to a shareholder with more than 5 percent of the capital, or to its board members; such a loan is void (Commercial Code § 159). A loan to a shareholder or the parent can also be taxed as a hidden profit distribution (Income Tax Act § 50²). See startup funding.

The first weeks after registration

1. Bank. Open the account in the company's name. If the capital was deposited with the registrar, ask for it back within one year (Commercial Code § 520(4¹)).
2. Beneficial owners. Check the entries. Changes are filed within 30 days of learning of them, and the data are confirmed with each annual report (Money Laundering and Terrorist Financing Prevention Act § 77).
3. Accountant access. Give the accountant a representation right in e-MTA (Tax and Customs Board guidance) and the right to submit reports in the e-Business Register.
4. VAT. Registration is mandatory within three working days of passing 40,000 euros of taxable turnover in a calendar year, and voluntary before that (VAT Act § 19, § 20). The Board may ask for proof of real business in Estonia. See VAT registration.
5. Employment register. Register each employee, each board member whose work creates tax liability in Estonia, each individual working under a contract for services (other than a sole proprietor or an entrepreneur-account holder), and anyone working for the company unpaid, at the latest when work starts (Taxation Act § 25¹, § 25²). See hiring employees.
6. Notices and licences. File them before the activity starts.
7. Books. The board organises the accounting from day one (Commercial Code § 183). The first financial year can run up to 18 months (Accounting Act § 13), and the annual report is filed within six months of the year end (Commercial Code § 179).
8. Contact data. Keep the e-mail address in the register current: courts, the registry department included, send documents there, and a document that cannot be served in the e-File is deemed served five working days after it is sent to that address (Code of Civil Procedure § 311¹). See e-Residency, the legal address and the contact person.

Buying a shelf company

A ready-made company carries its whole history: debts, tax arrears, unpaid capital, overdue annual reports. The company is liable for all its obligations with all its assets (Commercial Code § 135(3)), so the buyer inherits them.

• If it was founded without contributions, the unpaid share and its liability pass with it (§ 520¹).
• An overdue annual report can lead to fines and deletion from the register (Commercial Register Act § 57, § 61).
• The share transfer must be notarially certified unless the articles validly waive that form (Commercial Code § 149).
• A licensed activity needs advance notice to the licensing authority before a change of owner or management that the licence checks (General Part of the Economic Activities Code Act § 30).

Since a new OÜ can be founded online in a day for a state fee of 265 euros, a shelf company rarely saves anything. If you still buy one, check the register card and past entries, the annual reports, the public tax debt query and the contracts, and get warranties with an indemnity in the purchase agreement.

General information, not advice for your situation. The law as in force on 30.09.2026.