How to Start a Business in Estonia as a Foreigner 

If you’ve been thinking about company formation in Estonia, expanding into the EU, or making it easier to work as a contractor or digital nomad anywhere in the European Economic Area (EEA), Estonia is worth serious consideration. 

Estonia is a popular country for entrepreneurs, digital nomads, contractors and freelancers, thanks to its streamlined, low-cost system for registering new businesses as a non-citizen, support for the entrepreneurial spirit, rapidly developing economy, and position as part of the EU. Owning a business in Estonia means that you can get paid more easily by European clients, sell products online in European marketplaces, and work smoothly with suppliers and partners anywhere in the EU.  

Doing business in Estonia as a non-citizen has never been more accessible. Whether you want to open a company in Estonia or register a company remotely without ever setting foot in the country, this guide covers everything you need to know. 

As of the latest available data, Estonia’s e-residency program had grown to over 112,700 members globally, with e-residents having founded more than 30,200 Estonian companies. 

Can foreigners start a business in Estonia? 

The Estonian government is very supportive of entrepreneurs and business owners, so it’s simple to open an enterprise in the country. There’s a streamlined process for opening a business in Estonia, and you can do it all online without ever setting foot in the country.  

You don’t need to be residing in Estonia to run a company in the country. The e-residency program was specifically designed to let people around the world start a business in Estonia and manage it entirely from their home country. 

What you should know before opening a company in Estonia 

Before you start a business in Estonia, you’ll need to get e-residency. Although it sounds like it involves living in Estonia, it’s not a residency permit and it doesn’t give you Estonian citizenship. It’s more like a digital tool that you can use to open a company, manage your business, and pay taxes. It’s worth noting that you don’t have to get e-residency. You can instead apply for a visa to become an actual resident of Estonia, but that costs more and takes longer to process.  

1. Apply for e-residency 

The first step is to become an e-resident. The application form is online and takes about 30 minutes to complete. You’ll need to briefly explain why you want to open a company in Estonia using e-residency and pay an application fee of EUR 100–120. Depending on the location of pickup, there may be an additional pick-up fee of EUR 30. For the most up to date application and pick-up fees, check this out. 

The government promises a reply within 30 days, but it’s usually less. Identity verification takes approximately 8 to 30 days, and card delivery takes 2 to 5 weeks.  

Every owner of your business needs to be an e-resident in their own right. If you’re running a company with a partner, or you’re a startup with a few founders and investors, each of you has to get e-residency separately. This is particularly relevant for board membersw ho need to sign documents and act on behalf of the company.  

2. Pick up your digital ID card — or use Mobile ID 

Once your application is approved, you’ll pick up the e-residency starter kit from a nearby location. You can choose your preferred location online as part of the application process.  

The kit includes: your digital ID card, which you can use to register a business, pay taxes, and more online; a digital USB card reader, access codes, and an access stick, so you can use your card to authenticate your identity and carry out business activities online. When you pick up the kit, an official will also record your fingerprints as part of Estonia’s anti-fraud practices.  

Alongside the digital ID card, Estonia also supports Mobile ID — a SIM-based authentication method that lets you sign documents and verify your identity directly from your mobile phone, without a physical card reader. For eligible Estonian mobile network subscribers, Mobile ID offers a convenient alternative for day-to-day digital signing and company formation tasks. 

3. Arrange a local address and contact person 

Once you have e-residency, you can apply to start your business in Estonia. Before you apply, you will need: a physical address in Estonia, which can’t be a residential address, and a local contact person. There are plenty of service providers who’ll carry this service out for you. Choose one from Estonia’s e-residency marketplace. It usually costs around EUR 30–150 per month, depending on additional services like accounting and bookkeeping.  

The address and contact person requirement exists under Estonian law so the company in Estonia has a registered presence for legal correspondence. Your service provider will typically cover both the registered address and the contact person role together. 

What types of company can you register in Estonia? 

Estonian law recognizes six kinds of company registration:  

1. Private limited company 

2. Public limited company 

3. Sole proprietor 

4. General partnership 

5. Limited partnership 

6. Commercial association 

Here’s what you need to know about each type of business to choose the right structure. 

Private limited company (OÜ) 

This is the most popular type of business for starting a company in Estonia, because it’s flexible, limits exposure to risk, and doesn’t require much capital. A private limited company is called osaühing in Estonian, but usually abbreviated to OÜ. It’s appropriate for contractors and freelancers working alone, and for small groups of people running a business together. An OÜ has to have a management board, but that board can have just one member and that member can be you.  

The board members of an OÜ are responsible for the day-to-day management and legal representation of the company. Many OÜ companies in Estonia have just one board member, which is why it’s so popular for independent contractors and sole traders. 

As of February 1, 2023, the Estonian Commercial Code and the Business Registry Law underwent significant changes. These revisions provide new opportunities for Estonian companies, including the removal of the minimum share capital requirement for private limited companies (OÜ). This means that you only need to commit to investing 1 euro cent in your OÜ, and you don’t have to pay it upfront; you can pledge to invest it within 10 years. With an OÜ, your personal assets are only at risk for the capital you invest.  

Public limited company (AS) 

This is similar to a private limited company, but it’s publicly traded and the minimum share capital is EUR 25,000. It’s called an aktsiaselts in Estonian, but that’s normally shortened to AS. An AS is a good choice if you already run a successful business with a reliable turnover and a number of business partners and you want to expand into the EU.  

An AS requires at least three board members and is subject to more stringent governance requirements than an OÜ. 

Sole proprietor 

If you’re running a business all by yourself or you’re a freelancer, you can register as a sole proprietor, or FIE. But most sole traders in Estonia register as a private limited company instead, because it’s so easy and protects them from risk. If you’re a sole proprietor, then you are personally responsible to pay any liabilities associated with the business.  

General partnership 

A general partnership is a business that you run together with one or more partners. Each one of you needs to be an e-resident. In a general partnership, all the partners are personally liable for any business debts.  

Limited partnership 

A limited partnership is very similar to a general partnership, but it limits your liability to just the amount of capital you put into the business. This makes it more popular than a general partnership.  

Commercial association 

A commercial association is a kind of company that lets all the founders and members work together for their joint interests. It’s rare to use a commercial association to start a business in Estonia.  

What is the best business to start in Estonia? 

As long as your business vertical is legal, you can open it in Estonia. Some of the best businesses to start in Estonia for e-residents are IT services, consultancy, marketing, ecommerce, and logistics.  

Estonia’s digital-first economy and strong tech talent pool make it particularly well suited for software development, digital services, SaaS businesses, and creative industries. Doing business in Estonia in sectors such as fintech, edtech, and digital marketing also benefits from the country’s EU regulatory framework and an established startup ecosystem that has produced more unicorns per capita than almost any other European country. 

Some areas of business have more regulations than others. If you want to open a business in a highly regulated industry, like financial services, cryptocurrencies, or construction, you’ll probably need to get a license or submit a Notice of Economic Activity before you start any business activities. 

How to register a company in Estonia as a foreigner 

Once you’ve got e-residency, it’s easy to register a company in Estonia.  

Here are the steps you’ll need to take: 

1. Decide what type of business to open 

2. Go to the Estonian e-Business Register (the commercial register) and complete the online form 

3. Sign your documents digitally using your digital ID card. It only takes about 15 minutes to complete the form, and your company in Estonia will be ready in 1 working day. The fee to register a company in Estonia is EUR 265, and most of the information and forms are in English. 

Before you start the process of company registration, make sure you have: 

• An e-residency ID card 
• A copy of your passport, for anti-money laundering regulations 
• A local physical address and contact person 

Many wonder if they need a lawyer to open a business in Estonia. In practice, if you have e-residency, you won’t need a lawyer to start a business in Estonia. You can do it all online without setting foot in the country. But if you choose not to become an e-resident, you will need a lawyer and a notary to open the business for you. It’s more expensive this way, and it takes longer. 

Opening a bank account for your Estonian company 

Once your company in Estonia is registered in the commercial register, you will typically need to open a business bank account to conduct financial transactions. Connection to Estonia is advantageous — and sometimes required — to open a business account with a bank in Estonia. Many e-residents complement this with a multi-currency receiving account, such as through Payoneer, to manage payments from EU clients and international marketplaces.  

Running your company in Estonia: Ongoing obligations 

Starting a company in Estonia is only the first step. Once your company registration is recorded in the commercial register, you will have ongoing compliance obligations under Estonian law: 

• Annual reports: Every company in Estonia must submit annual reports to the commercial register each year, typically within six months of the end of the financial year. Annual reports are filed electronically and are publicly accessible. 
• Board members: Your company’s board members are legally responsible for ensuring annual reports are filed on time and that the company’s registered details remain accurate and up to date. 
• Tax registration: If your company’s annual turnover exceeds the VAT threshold (currently EUR 40,000), you must register for VAT in Estonia. 
• Accounting: Estonian companies must keep proper accounting records. Many e-residents use service providers who combine the address and contact person service with bookkeeping support. 

The advantages and disadvantages of Estonian e-residency 

If you’re still considering whether it’s worth getting e-residency as part of starting a business in Estonia, here’s a brief overview of the pros and cons. 

Advantages: 

• It makes it smooth, easy, and fast to open and manage a business in Europe 
• Support to manage an EU business online from your home 
• Low corporate tax, and tax agreements with many countries to prevent double taxation 
• Access to valuable business markets in the EU and Eastern Europe 
• Low fees for setting up and managing a business 
• A digitally advanced economy with fast internet, many business services, and plenty of support for entrepreneurs 
• An established startup hub which has produced more unicorns per capita than almost any other European country 
• Most business-related resources are in English 

Disadvantages: 

• You don’t receive any rights as a citizen or a resident, and e-residency is not a visa or give you the right to enter the country  

For most freelancers, contractors, and digital service businesses, the advantages of company formation in Estonia far outweigh the limitations — particularly if you already work with EU clients. 

How Payoneer can help when doing business in Estonia 

Once your company registration in Estonia is complete, you’ll need a reliable way to receive international payments, manage multiple currencies, and pay global partners. This is where Payoneer can support your business. 

With a Payoneer account, your company in Estonia can: 

• Receive payments like a local: Access EUR, USD, GBP, and other currency receiving account details so EU and global clients can pay you via local transfers. 
• Manage multiple currencies: Hold balances in 10+ currencies and convert while making a transaction, when rates work for you. 
• Pay partners globally: Make payments to suppliers, contractors, and team members in 190+ countries and territories. 
• Simplify invoicing: Use Payoneer’s request a payment feature to send professional payment requests directly to clients. 

Whether you’re doing business in Estonia as a solo contractor or scaling a digital services company, Payoneer provides the financial infrastructure to support your global growth.