Setting up a company the right way can save you significant money, among other benefits. Let’s check a 5-item list which helps you avoid common business mistakes in Estonia. See what to watch out for!
What is EORI number and how to get one in Estonia?
Economic Operators’ Registration and Identification system operates in each country of the European Union. This system was established for customs authorities information about goods flow between the countries of the Community and the third countries (outside the EU).
EORI number is the identifier of the economic entity with the customs authorities and is a single number which is unique for each individual and valid throughout the Community. EORI number can be granted only once.
How the authorities control our bank accounts?
When we decide to open an account abroad, national tax authorities can be notified about this. The Polish tax office will therefore acquire a range of financial data about our company. Only some countries have not decided to participate in such fiscal cooperation and do not automatically share information with the fiscal authorities of other countries – these include Georgia and Armenia. The automatic exchange of data is an inconvenience for entrepreneurs, who value privacy and do not want the state to have access to their bank accounts.
To improve the flow of information between national authorities, Organization for Economic Cooperation and Development (OECD) has issued Common Reporting Standards (CRS).
The taxation rules of a dividend from an Estonian company
How to calculate the value of CIT on dividends?
One of the possibilities of paying out the profit achieved by an Estonian company is the payment of dividends. As a rule, the dividend payment generates 20% CIT on the gross amount, which corresponds to 25% on the net amount. Taxation of the dividend is expressed by a ratio of 20/80 of the paid out amount. The tax due can be calculated using two alternative methods.
The tax amount calculated during the distribution of the entire profit generated by the company
Licences and permits in Estonia – when will you need one?
When you set up a company abroad, it is necessary to analyse, at the very beginning of the registration process, whether it is necessary to obtain a licence or permission for your type of activity. This is particularly important because each country in the European Union has different regulations for particular types of business activity subject to regulation and licencing. It is worth noting that in some cases one of the requirements is to operate in a certain legal form, ex. as a Joint Stock Company or to have a certain share capital. Therefore, it is worth consulting your plans with a law firm before starting your business to avoid costly mistakes at later stages.
Company in Estonia. For whom is this a good solution?
Establishing a company in Estonia is a particularly good solution for new technologies industry. Thanks to effective legislative processes and transparent legal environment, it is beneficial for cryptocurrency exchange or token issuing companies. What’s more, setting up a company in Estonia is also much easier and cheaper for firms active in traditional industries such as finance and shipping.
Why is it worth to set up a company in Poland?
Poland is the country located in the heart of Europe. The business climate, as well as the economic competitiveness, have been improving over the years and now the country has a successful economy and a large internal market (38 million citizens). It is worth noting that Poland has one of the lowest CIT rates in the European Union. What’s more it offers access to the skilled labor force as well as attractive conditions for doing business.
Benefits for investors
Corporate income tax in only 9% in Poland, which is really attractive to the entrepreneurs. This applies to the companies with revenue up to 1.2 million euros. The rate also includes entities in their first year of operation. In fact, 9% tax rate can apply to the entities with revenue higher than 1.2 million euros, with the more complicated corporate structure build on the limited partnership. It is also worth mentioning that companies are not obligated to pay divided tax. The taxation is on the receiver. Fiscal obligations do not distinguish between local firms and those owned by foreign persons, however international taxpayers can benefit from tax reliefs should they be subject to double taxation treaties (signed with more than 80 countries). There are also other fiscal reliefs for companies conducting ex. research activity.
Why you should register your company in Poland?
Looking for a good place for your business in UE?
🇵🇱 Pay attention to Poland, which offers many opportunities for setting up new businesses. One of the lowest corporate income tax rates, well-developed banking system and large market for the products. If you’re interested in hearing some more, see my newest episode. All you need to know in just 3 minutes!
Security Token Offering (STO)
Chcesz się dowiedzieć czym jest STO i jak dokonać jego emisji? Dobrze trafiłeś/aś. Przed Tobą 3-minutowy filmik, w którym w prosty i przystępny sposób tłumaczę m.in.: 👇👇👇
– czym jest STO,
– jak wygląda w praktyce,
– co dokładnie daje emitentowi.
Sprawdź, dlaczego powinieneś zwrócić uwagę właśnie na tę metodę pozyskania kapitału.
When Estonian company should be subject to an audit?
An audit is a detailed examination of the company. The auditor assesses correctness of the annual financial statement, which represents the economic situation of the company in a reliable and credible way.
Criteria that determine the audit obligation
The matter of audit and Review is regulated in the Estonian “Audit Activities Act”.
Mandatory audit concerns entities which have shown at least two of the following values in their annual report:
Sales revenues of more than EUR 4 000 000;
Total assets of more than EUR 2 000 000;
Average number of employees at least 50.
Interview for Nooor Blockchain Armenia
We were invited to the Nooor Talks Series, where our Senior Partner, Artur Kuczmowski, briefly talked about how Poland is getting over the issues resulted from the pandemic and expreded his thoughts on stablecoins, and the biggest challenge of blockchain technology.
The Polish government spent PLN 1.5 billion to help entrepreneurs during the crisis. They focused mainly on protecting jobs and maintaining financial liquidity. What is more, the Polish Development Fund in cooperation with banks has created a revolutionary program aimed at maintaining financial liquidity during the coronavirus pandemic, Senior Partner recalls.