Estonia is well-known in business circles for the ease of setting up and running a company. With minimal bureaucracy, the country even holds the world record for the fastest company registration—just 15 minutes! Several amendments to Estonian Commercial Code came into effect in 2023. Throughout 2024, they will further simplify establishing a business here. This article highlights three key changes.
Start-up capital in Estonia — 1 Euro Cent
Since 1995, Estonian law required the minimum authorized capital for private limited company (OU) to be at least 2,500 euros. Entrepreneurs had little flexibility in deciding how much capital they actually needed—it was fixed at 2,500 euros to “stamp” a company into existence. But on February 1, 2023, everything changed.
Now, an OU’s minimum authorized capital can be as low as 1 euro cent.
With abolition of minimum capital requirement, the cost of capital formation for an OU has significantly decreased. Founders are now motivated to make more informed decisions. These flexible processes streamline OU registration and positively impact future entrepreneurs.
Simplified confirmation of authorized capital contributions
Also on February 1, 2023, Estonian Commercial Code introduced simplified procedure for confirming payment of share capital contributions. Previously, a payment notice from a credit or payment institution had to be submitted for every case, and Estonian Business Register had to verify contribution payments. Now, this rule only applies to large contributions exceeding 50,000 euros.
For smaller contributions, board members can confirm payments themselves. Administrative authorities have reduced their workload, and entrepreneurs no longer face delays or issues confirming payments through financial institutions.
Company name reservation in Estonia
On March 1, 2024, name reservation for companies was introduced. Now, you can reserve a name before registering or changing it in the Estonian Business Register.
For whom: individuals and legal entities. How much does it cost? A reservation for up to 6 months costs 150 euros.
Company name requirements remain unchanged. Names must not mislead regarding legal form, scope, or activity. They must adhere to moral standards and avoid using names of state authorities or local governments. It’s also wise to check combinations of letters, words, or numbers to ensure they don’t conflict with existing Estonian trademarks.
This innovation is welcomed by foreign entrepreneurs, offering predictability and confidence. Now, they can reserve a desired name and begin branding—securing a domain or Instagram handle—before officially registering the company.
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