Starting new business – Registration of a company in Estonia can be completed with only one shareholder and one director who both can be foreigners and reside elsewhere than Estonia, if company has official Estonian contact person. The minimum paid-up capital is €2,500 and with Novasigma the incorporation procedures can be completed remotely.
Tax system – Profits realized by an Estonian company are not subject to any income tax in Estonia provided the income is re-invested int the same company or kept in the company’s corporate bank account. This tax system allows entrepreneurs and investors to re-invest all their income into the development of their businesses without any deduction by the government. Corporate income tax in Estonia can be deferred without any time limitations until such a time company wishes to distribute it’s profits abroad
Low costs – Labor costs of only 10€/h (10th lowest among all European countries) and Tallinn is the second cheapest capital in the EU for the cost of renting an office from 13€ per square meter. Cost to import and export products are much lower than the rest of European Union (average €765 per container)
No debt crisis – The country’s public debt is only recorded at 9,4% of its GDP, one of the lowest rates in the European Union and in the world.
Domestic market – While companies registered in Estonia have access to the whole European Union market without any custom duties (exemption in Finland), the country’s domestic market offers limited opportunities, due to a population only 1.3 million and annual purchasing power of less than $20,000 per person
Corporate tax – Estonian’s taxes are higher than one would expect from an Eastern European country: corporate income tax and VAT rates are both 20%, in some cases corporate income tax is 14%. Employers must also remit social contributions averaging 33% of their employees’ gross salaries.
VAT – Value added tax 20% (VAT) is charged on the value of supplies of taxable goods and services made in Estonia, including some exports to European Union countries.
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