How does a TRADING COMPANY work?
- Establish a trading company in Estonia;
- Trading company buys goods abroad, for example from China;
- Trading company sells the goods to your subsidiaries in EU countries or directly to customers;
- Trading company accumulates the profit;
- Initial financing can be granted from the shareholders in the form of credit or as an equity investment.
- The profit of an Estonian company is not taxed until distributed. If distributed to shareholders,corporate income tax at the rate of 20/80 shall be paid. If distributed as arm's length interest, no income tax is due or 14/86 if the dividend is paid on regular basis.