FAQs

Digital document issued by the Estonian government that allows entrepreneurs to establish and manage an online company from anywhere in the world, giving them access to the European Union market and benefit from Estonian digital services.

You can start your application to the e-residency, on the official site:  HERE.

If you want more information about the e-residency program, we ask you to write to us at:  info@sunnybusiness.ee , where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy).

Osaühing (abbreviated OÜ), represents the legal form of Limited Liability Company (SL/LLC) in Estonia. The company (OÜ) has its share capital divided into private limited company shares and has a board of directors (one or more members), which means a management body that represents and directs the company. The minimum share capital of an OÜ without immediate contribution is €2,500. The partners have up to 10 years to make the contribution of the share capital.

If more than half or none of the board members do not reside in Estonia, the company must provide an authorized agent and a legal address in Estonia (Virtual Office and Contact Person services), as well as the address of the country of residence as a place of administration. 

You can start the process of registering your company,  HERE ! 

If you want more information about business registration and the benefits of having your company in Estonia, we ask you to write to us at:  info@sunnybusiness.ee  where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy ).

The e-residency program allows and facilitates carrying out many activities remotely and with access to the European Union market. The main ones and with which Sunny Business Services can support you, are:

• Professional Services: Freelancers (self-employed) who work as Web Designers and/or Programmers, Marketing and Business Consultants (Business Coaches), Travel Agencies, Traders -imports/exports-, among others.
• E-commerce & Dropshipping: If you want to start an e-commerce (Amazon, Ebay, or your own online store), even a drop shipping model.
• Digital Services: those services that do not require your direct intervention and are provided only digitally (Ex: SaaS and SaaP).
• And many others!

When incorporating the company, only one activity code can and must be reported. When filling out the “Entrepreneur Plan” registration form, we will ask you about the activity of your company or business model; this will help us to know under which code to register your company. This code must represent the main activity of the company and with which it will generate most of the income. 

The code will be adjusted if necessary, at the time of each closing of the fiscal year with annual report. The activity code is based on the EMTAK Code system.

Clear! With the same company you can simultaneously operate in various business fields with different activity codes. At the time of company registration, only one activity code is reported, the one expected to have the highest percentage of total activity. All the activities with the respective codes will be reported at the time of each closing of the fiscal year in the annual report. 

Your company's fiscal year generally starts from the month immediately following when your company was established. However, the fiscal year can be set to a different 12-month period to match the calendar year (optional).

Example: Company incorporation date: December 18, 2021. Fiscal year: January 1 to December 31.

Keep in mind that at the end of each fiscal year, your company must file an annual report, this is the annual tax declaration. 

According to the law, the share capital of the Estonian company (OÜ) must be at least €2,500. However, you do not have to deposit it immediately if the founder(s) of the company are natural persons; you can deposit it later (up to 10 years) in the bank or payment service institution within the European Economic Area. Until the total amount has been paid, the shareholders/founders are personally responsible for the missing contribution and must deposit it when the fiscal situation of the company so requires.

Once your company has an account with a European IBAN, either with a bank or payment institution within the European Economic Community, shareholders must transfer their share or shares from their personal accounts to the company's bank account. Said payment must bear the legend or detail:  “Osakapitali sissemakse” . When all the shareholders have paid their shares, they must request a digital confirmation from the bank or payment institution about the contribution. 

Once you have the digital confirmation of the payment of share capital,  Sunny Business Services  will support you in registering said procedure in the Estonian company portal and for the company to comply with the requirements. This service has a cost of 60 Eur (state fee included).

You can use this amount to make payments, business-related expenses, investments, loans, or simply keep it in the account. The company is not required to keep the capital in the bank.

No. The share capital must only be paid by the shareholders, which is why the company is called “limited liability”: the liability of the shareholders is equal to the amount they have contributed.

Undoubtedly, some of the big questions and concerns of entrepreneurs are: How and when do I pay taxes, how much do I have to pay and to whom or where? Don't worry, that's why  Sunny Business Services is with you; to make this something much easier and not bring you nightmares.

First, it is important to note that Estonia is NOT a tax haven, and your company will at some point pay taxes like any other.

Fortunately, Estonia has a modern, digital tax system designed to support companies from the start, promoting their healthy financial growth by reinvesting capital and making it easier to pay taxes online.

Regarding  when ; As long as you reinvest the money generated by your company and justify the expenses related to the business, the company will not pay corporate income tax (CIT) in Estonia at the end of the fiscal year.

The taxes that your company owes to Estonia are paid when you distribute dividends or profits to shareholders. How much?  Dividends activate 20% of CIT on the gross distribution, which is equivalent to 25% of the net distribution. Estonia's tax rate is formally expressed as 20/80.

To who? Remember that you and your company are two separate persons. Your company is a tax resident of Estonia and you are a tax resident of your country of residence. So your company pays corporate taxes in Estonia, and you in your country of tax residence.

IMPORTANT: As your Estonian company will be actively managed from another country, then according to local tax regulations, your Estonian company may be considered as tax resident in that country too. This means your company can be subject to CIT in the country where its management is located, and also in Estonia. Tax codes of both countries must be followed.
Estonia has a treaty for avoiding double taxation of income tax, effective with 60+ countries worldwide.

We can consult you about Estonian CIT and tax treaties that would apply to your company, but you should seek for additional consultancy from professionals in your country, to identify your company tax status and potential liabilities there.

If you want more information about taxes, dividends, salaries, or any other tax issue, we ask you to write to us at:  corporate@sunnybusiness.ee where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy).

Read more on CIT taxation here:
1. Tax registrations for e-resident companies
2. Cross-border taxes for e-resident operated companies
3. Tax guide for digital nomads with Estonian company

Dividends activate 20% of CIT on the gross distribution, which is equivalent to 25% of the net distribution. Estonia's tax rate is formally expressed as 20/80.

When distributing dividends, it is important to follow and comply with the following requirements:

• Make sure you have paid and registered the share capital.
• The last annual report must be approved with a resolution digitally signed by the shareholders.
• When deciding the amount of the dividend, make sure you don't exceed the retained earnings or undistributed earnings according to the company's Annual Report.
• The net assets of the company cannot fall below half of the share capital or the minimum share capital requirement of the company as a result of the payment of dividends, whichever is greater.
• As the sole shareholder, draft and sign the dividend distribution decision.
• The company must pay cash dividends to the current (personal) account of the shareholder.
• The respective entries must be made in accounting.
• The payment of dividends must be declared on the TSD and the tax due on the distribution of dividends must be remitted before the tenth day of the month following the actual payment.

Yes, and it is another of the alternatives to withdraw money from your company without having to pay taxes on the distribution of dividends and without having made the minimum or registered share capital contribution.

There are two ways: assign yourself a salary as an administrator (board member), and/or as an employee of your company. In many cases, the type of salary for a member of a small business is compensation for performing duties as a manager/board member or as an employee, or a combination of both.

If you want more information about their salaries and taxes, we ask you to write to us at: info@sunnybusiness.ee where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy).

It is important to understand and remember that, in your company, you are considered to perform two types of tasks: Being a member of the board or director (board member), you are in charge of the administrative and bureaucratic tasks of your company. 

Additionally, you can also be the only worker or employee; who performs the operational tasks of the company, which add value to the services / products you sell. Provision of services such as consulting and customer service, production, web design or programming, trading, etc; count as activities as an employee of your company.

However, the main difference between the administrator salary and the employee salary lies in taxes.

The remuneration of the members of the board (administrator) is applied for the fulfillment of company management tasks, such as hiring, personnel management, business development, signing contracts, banking, etc. 

Administrator's salary is always taxed in Estonia. How much? With 20% on the gross remuneration, plus the social tax (33%) on the previous gross remuneration. Social security tax is also payable in Estonia, unless you prove that you already contribute to social security in another country in Europe (residence) by providing an A1 form (E101).

This is a great alternative for those who work under the figure of SELF-EMPLOYED; you can unsubscribe, because with your company you can invoice your clients and show that you contribute to social security on your part, saving you the tedious monthly fee (300€ approx). It is better to unsubscribe and pay social taxes by self-employment, since the tax burden is much lower.

VAT (value added tax) is a type of tax applied to consumption and/or the sale of goods and services. In case of Estonia it is 20%.

Now, the intra-community VAT number is a unique code that identifies a legal person (company) subject to tax. In Estonia it always starts with the letters “EE” followed by 9 digits, for Spain it is “ES” followed by another letter and 8 digits.

Many companies face strict VAT compliance requirements when they start operating abroad. Whether they provide goods and services across international borders or ship products abroad to a foreign warehouse or fulfillment center, provide digital services to other businesses and consumers, they likely have a VAT number.

It depends on whether it meets any of the following characteristics:

• You buy goods or services from other companies in the EU, for example: Facebook advertising, Google Ads or other digital services.
• You sell physical products to customers (B2B and/or B2C) within the EU
• At least part of the production, transit, storage or distribution of goods or services is managed from Estonia,
• You sell services such as development, design, consulting, marketing, etc., to other companies (B2B) in the EU and earn more than €40,000 per year,
• You sell digital services (SaaS/SaaP) to European clients (B2B and/or B2C).

The VAT number helps track the amount of taxes your business pays and collects (inbound and outbound VAT) through purchases and sales (expenses and revenues).

1. Helps identify customers' tax status and tax location.
2. For B2B purchase / sale (Reverse Charge or Reversible Change mechanism).
3. To complete the VAT return form (Include your VAT number on all your tax receipts and invoices).

If you are looking for global expansion and have discovered the benefits and opportunities of new markets with your company in Estonia, then yes!

Important: Once your company reaches the distance selling threshold (crossborder VAT), you must obtain the VAT number in the country where this limit was exceeded.

Only Tax Offices are entitled to issue a VAT number, however this process can be complicated and time consuming. It is for the above that Sunny Business Services will support you in reviewing the commercial details and submitting the online application, so that you obtain the VAT number within 3 – 7 business days.

Simple… it depends on the type of business and where your customers are.

If your company sells services that require direct intervention on your part (consulting, marketing, design, programming, etc.).

• If your clients are EU companies with a VAT number =  you DO NOT  add VAT (0% Reverse Charge).
• If your client is B2C or a company within the EU without a VAT number =  YES  you add VAT (20% from Estonia).
• If your clients are outside the EU (Latam, Canada, USA, Australia, etc) = your invoices  DO NOT  include VAT.

Now, if your company sells digital services, that is, those that do not require your intervention because they are automated. Example: Apps, Downloads, Streamings, among others. 

• Your client is B2B (European) with a VAT number =  you DO NOT  add VAT.
• Your client does not have a VAT number, but is in Europe (B2C or B2B) =  IF  you add the VAT of their country of origin. 
• Finally, if your client is outside of Europe = you DO NOT add VAT.

E-residents use a wide range of payment institutions for their banking needs. The solution they choose varies based on their geographic location, business needs, and previous experience using payment institution services.

As an e-resident, you can choose a combination of banking options or change your bank account in the future. For example, some e-residents choose a banking provider with an account they can easily open online to start their business. Later, once their business is worth the investment or meets additional criteria, they upgrade to an account with more features.

Find a possible Banking service provider for yourself here: https://bankspace.net/

Depending on your situation, there may be several banking options and possibly the best of them is through a fintech.

This is because these institutions offer the option to open accounts entirely online and are often more flexible than traditional banks. Plus, you can get an account with many of the same features as traditional banking, including a European IBAN (International Bank Account Number) and the ability to make and receive payments in different currencies.

The variety of options is wide, so we recommend you do an exhaustive investigation to find out which of them best suits your needs and business profile. Now, based on the experience of our clients, at  Sunny Business Services we recommend you consider Wise (formerly called TransferWise) as your first option.

Find a possible Banking service provider for yourself here: https://bankspace.net/

Wise is a financial institution that allows you to open a personal and business account, with which you can send and receive payments in different currencies, including the main EUR, USD, GBP, AUD, among others. At the time of opening an account, you must enter information about your company (registration code, economic activity, shareholders, legal and administrative address, etc.). To activate your account, you will be charged a small one-time fee.

One of the advantages that Wise offers for the administration of your company is the payment of the share capital and its registration. 

In case of any problems or questions, Wise has a 24/7 English language support line. In Spanish there is the option of chatting or requesting a call from them; just write to them and ask them to call you. 

This transfer can be made from your Wise company account directly to the bank account of your choice in any of the countries in Latin America where Wise can send money. 

The only thing you have to do from the Wise platform is to convert your money to the destination currency of your choice (eg CLP, MXN, etc.) and, finally, transfer those funds to an account in the country of your choice. 

One of the best options offered by fintechs today is probably Global66, which is a Chile-based fintech that allows you to easily send funds from a CLP, COP, BRL, PEN, ARS or MXN account to any EUR account. located in Europe (such as a Wise account in EUR for purposes of payment of share capital).

If you want more information about banking, you can write to us at: info@sunnybusiness.ee where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy).

There are many advantages when choosing to open your e-commerce company in Estonia. Estonia is the first country in the world that has offered a digital identity that knows no borders, and that seeks to provide an opportunity to various entrepreneurs around the globe.

E-residency is the way to access the services offered by the Estonian government without having to visit the country. You can start your company, have access to the European Union market and have the necessary tools to manage your company remotely.

If you are looking to have a company dedicated to e-commerce or dropshipping, without depending on a fixed residence, avoid bureaucratic procedures and have European clients and suppliers, e-residency is the answer.

There are many benefits to becoming an e-resident:

• You do not need to depend on a specific residence. 
• You can establish and operate your company 100% remotely.
• You can live in any country without the need to make changes in your company.
• You will have the advantages of starting a company in Europe.
• You can use various payment providers, such as Stripe, Paypal, among others.
• You can sign and pay your taxes online.
• The e-residency is not a tax haven, but the Estonian tax system is very modern, digital and designed to support entrepreneurs from the start.
• You will not have to pay taxes as long as the money that enters the company is reinvested in it.
• For more information regarding taxes, go here. 

It is possible to categorize e-commerce with its business models depending on how they generate their income and how the exchange of products, goods or services between buyer and seller is carried out:

• Marketplace → It is a store of stores. It is a website where various companies offer their products or services.
• Dropshipping → It is a normal e-commerce, but the essential difference is that the seller does not send the product, but a third party does.
• Online store with your own products → It is the same as a physical store, but the products or services are marketed online.
• Services → It is not necessary to sell products or goods, you can also sell services such as mentoring and/or consulting.

One of the simplest and most common ways to start an e-commerce is through the "Fulfillment by Amazon" (FBA) program; a dropshipping model created by Amazon that makes various services available to its sellers, such as receiving, storing and shipping your products to customers around the world.

Integrating your e-commerce store to a platform or marketplace can be one of the most appropriate decisions when starting a business. Industry-leading marketplaces are frequently found helping e-commerce entrepreneurs boost their business in incredible ways.

We are talking about the giants of the marketplaces such as eBay, Amazon and Etsy. These marketplaces are very popular in the e-commerce fields and are constantly under development with the aim of creating suitable tools for entrepreneurs.

As for the platforms for e-commerce, we recommend the following:

1. WooCommerce : WooCommerce is a platform widely used by WordPress lovers as it helps from small to large companies to manage their online store. It will allow you to offer your products under your terms as it is quite flexible when it comes to customizing your online store.
2. Shopify:  Shopify has become one of the leading platforms in the field of e-commerce, helping countless entrepreneurs to establish an online presence through the sale of products and services.
3. Wix:  Wix is ​​an ecommerce platform that is characterized by being very easy to use when building your website. With its design tools and user interface, it makes it an ideal option for entrepreneurs with basic knowledge of web page design.

It is not necessary to have a bank account for your company, but it is recommended to open one before setting up your PayPal account for your business. In addition, you will have to confirm an email address, provide contact information, and provide the bank account number where you would like to receive the money deposited. Alternatively, you can use a Wise Business Account for receiving PayPal payments.

You will have to provide the name of your company (which will appear on your clients' invoice), and it will also ask you to describe the type of business of your company.

• Self Employed / Freelancer
• Limited Liability Company
• Anonymous society.
• Nonprofit organization.
• Government entity.

Depending on the type of business you choose, PayPal may require additional information, such as the product or service your business markets, website, monthly sales volume, and your business identification number. Lastly, it will ask you to provide contact information for your customers.

If you want more information about e-commerce, payment providers and marketplaces, you can write to us at: info@sunnybusiness.ee where one of our consultants will support and guide you on the subject (service fees applicable during the consultancy).

The liquidation process must include the following steps:

• Preparation and submission of shareholder resolutions.
• Appointment of local resident liquidator who is Estonian resident and lives in Estonia
• Announcements in the public notice board
• Payment of public notice fee
• Payment of state fee for registering the liquidation
• Liquidation of starting balance sheet and report
• Liquidation of closing balance sheet and report
• Signing various documents and applications on behalf of the company as needed during the process
• Archiving of company accounting documents for a minimum of 7 years, some documents are required to be archived for 10 or 50 years. Local resident company or person must be registered as the depository of documents
• Shareholders who do not have valid e-residency, must either attend to Estonian notary or authorize a local liquidator for submission of petitions and documents.

The liquidation process usually takes about 8 months, until the company becomes completely deleted.

Our fee for liquidation service starts from €1500 which includes all services listed above. Accounting- and tax services fees may be applicable extra. Note, that we provide liquidation service only to companies who do not have outstanding liabilities to third parties.