Estonia is a popular location to establish a business not just for the reasons like having better access to EU clients or the ability to deal with the Estonian government in a very non-bureaucratic manner. Some choose to establish an Estonian company to have the benefit of obtaining a visa through investment, which can be very handy if one is from a non-EEA country or has tax residency in a country that is not as favourable as Estonia.
There are several reasons one should wish to become have Estonia’s investor visa and here are a few perks that come along with it:
· a temporary residence permit which grants the right to stay longer in Estonia that a regular tourist visa or 90 days;
· the right to freely enter the EU and Estonia;
· the right to travel freely between other Schengen countries;
· possibility to establish a personal bank account in Estonia which can be beneficial if you are interested in buying shares of a public company LINK in Estonia;
· possibility to manage your company from Estonia, thus making it a resident company;
· possibility to get Estonian tax residency;
· temporary residence permit for up to 5 years with possibility for extensions.
In case you wish to get the Estonian temporary residence permit as a major investor, you must be ready to make a direct investment of at least €1,000,000 in an Estonian company that is also registered in the e-Business Register and that mostly invests into the Estonian economy. Alternatively, you can also invest in an investment fund, according to the investment policy where the principal instruments of the fund are invested in companies that are registered in Estonia.
In case you apply for the major investor visa, you do not need to submit a business plan, which is a requirement under the general investor scheme.
However, the investment that you make under this scheme must be permanent during the period that your residence permit is valid, except cases where the investment suffers fluctuations of the market price. During this period, you can change the company or the investment fund in which you made the investment in order to be eligible under the conditions that the company or the investment fund continues to invest in the Estonian economy and companies that are registered in Estonia.
Finally, major investors are not required to have a place of residence in Estonia nor the requirement to register a place of residence in the Estonian Population Register.
The general investor scheme is much less capital demanding than the major investor scheme. The conditions within the general scheme enable you to apply for the residence permit if you have a stake in a local company (in a private limited company e.g.) or you operate a sole proprietor company. The investment you must make as a sole proprietor is €16,000 while in other businesses it must be at least €65,000. Here it is worth noting that the company’s equity, its subordinated liability and the fixed assets that are registered can be considered as investments. This is because share capital can be contributed as monetary and non-monetary assets and one can fund a company’s activities in the form of loans.
As I briefly mentioned before, you must submit a business plan in order to qualify for this visa. Within the business plan, you must include the following:
· name and the registry code of the company;
· the business’ main planned activities, potential clients, potential suppliers, plans of development, fixed assets, circulating capital, and the labour force being used;
· financial forecasts for the next two years, which include a projected income statement, balance sheet, and a cash flow forecast;
· CVs of the people who are at a managerial or a supervisory position;
· a motivation letter on why the applicant must relocate to Estonia in relation to the company and its goals.
Once a period of one year passes after gaining your residence permit via the general investor scheme and are applying for an extension, the investment requirement for the residence permit may be replaced with your company’s sales income or by the social security tax paid in Estonia. The sales revenue must be €200,000 per year, or the monthly social security contributions must be at least equal to the contribution made from an Estonian five-time average annual gross salary.
You start the process of applying for the Estonian investor visa by downloading and filling in all the boxes of the application for a temporary residence permit either in English or Estonian. Also, note that by signing your application, you confirm that everything stated there is true; you have adequate legal income (at least €260 per month), and you have a health insurance contract. Finally, print out the application, add an appropriate photo, and sign the application with a signature that is written with a dark ballpoint pen and in a steady continuous line and without ruptures or additional dots and lines.
It is stated that your signature should not cross the borders of the signature box or else your application may not be accepted!
Gather all documents you must take with you – your application, passport and even the documentation that proves your legal income and that you have health insurance. Also, if you apply under the major investor scheme, you must bring documentation or data that proves that you have made the investment for the required amount. And as mentioned, under the general investor scheme, you must have a business plan that you take with you within the requirements stated above.
Make sure to pay the state fee of the application and keep the receipt.
If you are not an e-resident and do not posess the e-Residency card, then you need to make your way to a foreign representation of Estonia or to a local Service Office in Estonia.
Once you have submitted your application in person, it will go under analysis and you will get a positive or a negative answer within the period of 2 months after your application was accepted. In case you receive a positive answer, a residence card will be issued at the location noted in your application, which you have to pick up personally and be ready to submit your fingerprints.
Once your business-related residence permit expires and you wish to extend it, you can do it in person at a local Estonian Police and Border Guard Board’s service office with at least 2 months until your current residence permit is due to expire. Also, if less that 5 years has passed, you can apply for the extension by mail or by e-mail. You will get the answer for your extension at least 10 days prior to your current permit’s expiration date.
Now, if you wish to become an Estonian citizen instead of just being a permanent resident, you must be aware of the fact that Estonia does not allow dual nor multiple citizenships. This means that once you gain Estonian citizenship, you must denounce all other citizenships that you may have. This may be done prior, or after you have officially gained Estonian citizenship.
In order to be eligible for Estonian citizenship as an adult you must:
· have a long-term residence permit or the right of permanent residence. It is obtained through residing five consecutive years, without absence of six consecutive or a total of ten months during the five-year period if you are a non-EU national. In case of EU nationals, you cannot be absent over 12 consecutive months or 18 months in total within a five-year period;
· have been living in Estonia for at least eight years based on a residence permit or by right of residence where at least five years it has been regularly, prior to submitting the application;
· have passed the Estonian language proficiency examination, where the exam is not required if you have obtained basic, secondary or higher education in Estonian;
· have passed an exam that tests your knowledge about the Estonian Constitution and the Citizenship Act;
· have a permanent legal income;
· have registered your place of residence in the Estonian Population Register;
· are loyal to the Estonian state.
To apply for Estonian citizenship, you must make an online reservation at a local Estonian Police and Border Guard Board’s service office. Once going there, bring documentation that proves that you meet the requirements mentioned above, bring a completed application, and documentation proving you have denounced or will be released from another citizenship in relation to the acquisition of Estonian citizenship.
Estonia’s entrepreneur-friendly business environment makes it the ideal place to incorporate your company. If you are interested in registering your company in Estonia, let us help you sail smoothly through the process. Reach out to us, and we’ll get you started!
Disclaimer: This article provides general information, which may or may not be correct, complete or current at the time of reading. No recipients of content from this site should act on the basis of content of the article without seeking appropriate legal advice or other professional counselling.