Estonia OÜ (Private Limited Company)
Estonia
Estonia's e-Residency program made it famous for allowing anyone worldwide to form an EU company entirely online. The OÜ benefits from Estonia's unique corporate tax system — no tax on retained profits, only 20% on distributions — making it attractive for reinvestment-heavy businesses. The company provides access to the EU single market, EU VAT registration, and SEPA payments. Banking has become the major pain point; traditional Estonian banks (LHV, SEB, Swedbank) are highly selective with e-Residents and often decline accounts. Wise Business, Revolut Business, and Airwallex have emerged as primary banking alternatives. Annual filing includes an income tax return and annual report submitted to the Estonian Business Register.
Formation Details
- Setup Time
- 4 hours
- Setup Cost
- $265
- Annual Cost
- $350
- Corporate Tax
- 0% on retained earnings; 20% on distributed profits (unique deferred distribution tax model)
- VAT Threshold
- $43,000
- Nominee Directors
- Not allowed
- Public Register
- Yes
- Residency Required
- None required for e-Residents. Estonia's e-Residency program allows foreigners to form and manage an OÜ entirely online. Physical presence not required. A licensed e-Residency service provider (contact person) must be maintained.
- Banking Difficulty
- Difficult
US Person Considerations
US persons face significant complexity. An Estonian OÜ owned by a US person is likely a Controlled Foreign Corporation (CFC) subject to PFIC or Subpart F rules. Estonia's 0% retained earnings tax does not reduce US tax obligations — US owners may owe US tax on undistributed earnings under GILTI rules. Strongly recommend US international tax counsel before forming.