Forms of business in Estonia
The first stage in establishing a company is selecting the form of business. The primary forms of business in Estonia are private limited company (OÜ), public limited company (AS) and sole proprietor (FIE). Deciding which type of business to set up depends on the business area of activity and related risks.
E-residents and non-residents are allowed to establish all forms of business. The most common form of business preferred by non-residents is private limited company. The moment you establish your private limited company and it is registered in the Central Commercial Register, the established company becomes tax resident in Estonia. This differs from sole traders who are obliged to apply for tax residency at the local tax department.
When selecting the type of business to set up, we recommend taking into account the liability of owners including any representatives. Private limited company, public limited company and commercial association owners and shareholders are not personally liable for any obligations of the company whereas not-for-profit association and limited partnership owners are jointly and severally responsible for any breaches of obligations.
With responsibility comes the right to represent the company. Private limited company, public limited company and non-profit association are all represented by board members. How the company is represented will be agreed in the article of association.
Take a look at the comparison table of all business forms in Estonia: https://1office.co/estonia/primary-forms-business-estonia/