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Founding a company in Estonia was already a quick process thanks to the digital company registration portal, but now there’s also the possibility to register the founded company as value added tax (VAT) payer and to register the employees of the company in the course of the founding process within the portal. Earlier, the respective petitions had to be submitted separately in a portal managed by Tax and Customs Board.
Registering as VAT payer
In Estonia it is mandatory to register a company as a VAT payer from the day when the turnover exceeds 40,000 EUR calculating from the beginning of the calendar year. It is also possible to voluntarily register the company as VAT payer before reaching the 40,000 EUR turnover threshold or even when no taxable turnover has been generated yet. This is advisable in case the company is buying services or goods taxed with VAT and wishes to apply reverse taxation, i.e. offset the sales and purchase VAT. The VAT payer is also entitled to reclaim the purchase VAT if it exceeds the sales VAT for the calculation period. However, if the clients of the company are mostly private persons and the projected costs are not high, it is more useful to remain as not a VAT payer.
Registering as VAT payer results in the obligation to keep a record of VAT and to submit VAT declarations by the 20th date of each month. The companies usually buy this service together with accounting service.
Registering of the employees
All employers — both private and legal persons — have the obligation to register the employees at the register maintained by Tax and Customs Board. The employees can ordinarily be registered via the digital portal of Tax Board, however, now the respective registering can be done already in the company registering portal during the founding process. The obligation to register includes all persons, whose tax liability is created in Estonia, irrespective of the format of the agreement and its duration.
The employment must be registered by the moment of commencement of work by the employee at latest. Therefore also the management board members of the company must be registered, which can now be conveniently done during the founding. It is mandatory to register also in case a person is working free of charge (for example the management board members at founding to whom no fee is paid).
Estonian company can be founded also with a bank account in foreign bank
When founding a company according to the regular proceedings (i.e. not via the company registration portal, but at the presence of notary instead) there occurred situations where the non-residents had trouble opening a bank account in a bank in Estonia, because in case of non-residents the banks were not able to fulfil their know-your-client requirements.
Since the beginning of this year the company being founded does not have to have a bank account in Estonian bank, but instead it is enough if the bank account has been opened in a credit institution that has been founded in another Member State of the European Economic Area or its branch. The company may also use such bank account later on for performing contributions for increasing of the share capital.
Post-founding documents and their management in Avokaado
In Avokaado you can quickly create all the aforementioned documents. You can always ask from the helpdesk what kind of document you should conclude and there’s information included with each document on when to use it. You can also find answers to frequently asked questions regarding the specific document. In order to create the document the user will answer questions, the tooltips next to the questions explain further the contents, court practice and other circumstances related to the questions. When the questions have been answered, Avokaado system momentarily creates the final document.
In addition to create the documents, Avokaado also simplifies the further processes related to the documents. Through Avokaado it is easy to share the documents with other parties — both with team-members and external persons — for sharing, negotiations and, of course, signing by using your ID-card.
Companies that have not implemented a separate document management system can use Avokaado’s document management function. It also enables to create various folders where the created, shared or uploaded documents can all be securely store in a cloud storage.