Setting up a Private Limited Liability Company (OÜ) in Estonia

Private limited liability companies in Estonia are known as Osaühing or OÜ. They are rather popular for foreign investors who want to set up a business in Estonia because they are less expensive and easier to run.  

Capital

The minimum share capital required for setting up a private limited liability company in Estonia is 2,550 EUR divided in shares owned by shareholders. The minimum value of each share is 6.4 EUR. Contributions in kind are also accepted and they do not have to be assessed by an auditor unless they exceed the minimum required capital. Registration of the shares in the Estonian Central Securities Register is optional.

Shareholders

There must be at least one founder for the incorporation of a private limited liability company in Estonia or an unlimited number of shareholders. There are no requirements of residency or citizenship. Shareholders are not personally liable for the company’s activities. 

Management

A private limited liability company in Estonia must have a management board as a representative and executive body. At least half of the members should have residency in Estonia or any other EU country or Switzerland. Members of the management board do not need to be shareholders and the managing director can be appointed among the employees. The management board must organize an annual general meeting of the shareholders.

Control

A supervisory board is only compulsory in a private limited liability company in Estonia if the total share capital exceeds 400,000 EEK and in the companies that have less than three members in the management board. The members of the supervisory board are appointed at the general meeting for a period of five years. The law also stipulates that an Estonian private limited liability company should have an auditor as soon as the capital exceeds 400,000 EEK. It is also compulsory to appoint an auditor if the annual turnover exceeds 10 million EEK, if the balance sheet total is over 5 million EEK or if there are more than 10 employees in the company. 

Other requirements

The name of the private limited liability company in Estonia must not resemble another name in the Commercial Register and it can be either in Estonian or in English, with the special requirement that is should contain the legal form and the activity of the company.