Estonia

Advantages:

• developed banking infrastructure;
• stability of tax system, moderate tax rates;
• effective and developed economic system;
• all the management may be in Russian.

Legislation:

Commercial Code 1995 (amended in 2005, 2006, 2007, 2008)

Taxation:

• corporate tax; if the profit is not distributed – the tax rate is 0%; if the profit is distributed – the tax rate is 21/79;
• tax from dividends 21/79;
• VAT 20 % (basic rate)

Depending on the kind of activity, the rate can be reduced to 5% (activity, connected with medicines, books etc.) and 0% (if export of goods and services from Estonia takes place).

The main legal forms of companies:

Osaühing – OÜ – analogue of Russian LLC

The company must have Management board and a shareholder.
Governing body of the company is this very Management board and its creation is compulsory, Management board member has to be EU resident. According to Estonian law Management board is equal to Russian sole executive body – director. At the same time director is not stipulated in the company, but he can be appointed by the Management board decision. His activity is regulated by labour contract.

Director can be any person (it’s not compulsory to have EU resident as a director). Shareholder can be any person (physical or legal). The minimum number of shareholders is 1, members of Management board -1. Director, shareholder and Management board member can be the same person. Shareholder and Management board member of the company don’t need to obtain permanent residence in Estonia.

If the share capital exceeds 40 000 EEK (approximately 2500 EUR), it can be required to have Supervisory Board.

Company report:

Annually up to June 30, the company must provide a financial report for last fiscal year (fiscal period is the calendar year from 01.01 to 31.12) to the commercial register.

If a company is registered with the value added tax and has an individual number VAT (in Estonia - KMKR), it is necessary to provide reports on the VAT to the tax department on a monthly basis up to the 20th.

Authorized capital:

The minimum share capital in LLC company is 40 000 SEK (2500 EUR) and must be fully paid at the time ofincorporation.

Currency control:

No currency control.

Confidential information:

Commercial register is public. It provides information about the shareholders, Management board members.

Permitted activity:

All the activities are permitted except those that are prohibited by the law or require licensing. The activities that require licensing are insurance, banking, financial and credit activities.

Agreements on double taxation avoidance:

Estonia has concluded the agreements with such states as Lithuania, Poland, Great Britain, Czech Republic,Denmark, Finland, Sweden, Norway, Iceland, France, Canada, Ukraine, Belarus, Kazakhstan, Italy, Austria, Latvia, Netherlands, Germany, Belgium, Malta, Moldova, Armenia, Portugal, Croatia, Hungary, Ireland, China, USA, Spain, Turkey, Slovenia, Luxembourg, Slovakia, Romania and Switzerland.