Estonia

Operating a business

Setting up a company

Legal business entities

Different types of companies	Number of partners/shareholders	Maximum and/or minimum capital	Liabilities	Registration fees
Sole proprietorship	1 person.	No minimum capital.	Liability is unlimited.	EEK 500 (stamp duty)
Private Limited Company	Minimum 2 partners.	Minimum EEK 40,000 (approximately EUR 2,2256)	Partners' liability is limited to the amount contributed.	0.2% of the registered capital (no more than 20,000 EEK).
Public Limited Company	No minimum.	Minimum EEK 400,000 (approximately EUR 25,560).	Partners' liability is limited to the amount contributed.	0.2% of the registered capital (no more than 40,000 EEK).
General partnership.	Minimum 2 partners.	No minimum capital.	The partners are solitarily liable for the obligations of the partnership with all of their assets.	0.2% of the registered capital (minimum: EEK 3,000)

Business setup procedures

For setting up a company, it should be noted that all documents must be drawn up in Estonian. When a translation is required, legalisation from the Estonian Embassy is required.
Status have to be delivered, within six months after signature by the founders, with the Trade Register where the company is going to be located. Two to three weeks are necessary to carry out all formalities.

The following documents are needed for incorporation: memorandum of association concluded by founders ; they should also approve as well the articles of association to be annexed to the memorandum.

According to the Commercial Code of Estonia, a company shall be considered as founded after its registration in the commercial register.

It should be noted that since 2007, registration with expedited procedure is made possible. Using the possibilities of the Estonian electronic identification system and digital signature, it is possible to register a company electronically with an expedited procedure (target within 2 hours). However, this procedure is limited to founders who are registered as Estonian residents.

For more information, please consult: http://www.doingbusiness.org, (choose Estonia) and http://www.investinestonia.com (section "Investment guide")

The competent organization

Registration should take place at the Commercial Register.

Working conditions

Legal weekly duration

Legal duration is 40 hours a week.

Retirement age

63 for men

60 for women

Working contracts

There are fixed-term contracts, (their maximum duration is five years) and contracts with unspecified terms. A minimal part of the working populations has no written contract; conditions are agreed orally. These contracts can not be extended over two weeks.

Cost of labor

Minimum wage

Minimum monthly wage for a full time work is EEK 3,600.

Average wage

The average monthly gross salary is EUR 720. The highest wages are paid in the financial sector and the lowest in the hotels and restaurants.

Social contributions

Social security contributions paid by employers: The rate is 33% (20% for social security and 13% for health insurance).

Social security contributions paid by employees: No contributions exist for employees in Estonia.

Social partners

Bargaining power

There are 2 major trade unions in Estonia:

- EAKL - Confederation of Estonian Trade Unions

- TALO - Estonian Employees' Unions' Confederation.

It should be noted that trade unions were reorganized following the independence of the country in the 90's. The trade unions gave up their role of acting as an "executing organ" and supporter of the Soviet Union system to gain freedom in acting in the state system and economy. The principles of social partnership were therefore established quite recently. A Trade Unions Act was drawn up and guarantees the right for employees to join a trade union.

Unions