Temporary residence permit
The issuance of residence permits is subject to the annual immigration quota, which cannot exceed 0.1% of the Estonian permanent population in one year. This does not apply to American or Japanese applicants or to citizens applying for residency to do research or study.
BusinessResidency is granted to foreigners who participate in a company or operate as sole proprietors, or invest in a business activity in Estonia with at least €65,000 (€16,000 if self-employed). The capital stock, the subordinated liability and the amount of the fixed assets registered can be considered as investment.
Temporary residence permits usually have a validity of 5 years. After that, you may renew the permit or apply for permanent residency. Provided that your place of residence has been entered in the Estonian population registry, you have health insurance, permanent legal income (€260 / month) and an Estonian language B1 level.
After living in Estonia for 8 years, 5 of which must be holding a permanent residency permit, you may be eligible for naturalization. To become a citizen, Estonian language proficiency, passiung an exam of the Constitution and the Citizenship Law, a permanent legal income (€ 260 / month) and loyalty to the Estonian state are all required.
Estonia does not recognize dual citizenship for naturalized citizens. Anyone who is granted Estonian citizenship by naturalization must renounce their previous nationality.
- Have an actual place of residence is Estonia registered with the Population Register.
- Have health insurance.
- Business plan in Estonian or English.
The description of business plan must express the following data:
+ name and registry code of the company or the sole proprietor;
+ business idea - planned activities, potential clients and suppliers, plans of development, fixed assets available for the company, circulating capital, labour force being used;
+ financial forecasts for the next two financial years - projected income statement, balance sheet, cash flow forecast
+ Curriculum Vitaes of the persons who perform managerial and supervisory functions
+ Motivation - why the settling of the applicant in Estonia is important for the enterprise
After one year has elapsed, when applying for the extension of the residence permit, the investment requirement set for applications for a residence permit may be replaced by the sales income (if at least €200,000 per year) or by the social security tax paid in Estonia (in each month at least equal to the monthly social security tax paid in Estonia from the fivefold remuneration of Estonian annual average gross wages).
European Economic Area
Dual citizenship is not recognized in Estonia. To become a citizen of Estonia, you must renounce your previous nationality.
- One passport-size photo
- Evidence of Health Insurance
- Proof of income
- Business Plan
- Investment Plan
- Original or Certified copy of Birth Certificate (if applicable)
- Original or Certified copy of Marriage Certificate (if applicable)
- Documents certifying Business Investment
- Receipt of payment of fees
- Original and photocopy of passport
- dual citizenship No
- Family members included Yes
- land ownership Yes
- Physical residence required No
- Personal visit required No
- Language skills required No
- Interview required No
- Investment Single €65,000
- Investment Family 4 €65,000
- Minimum annual income €3,120
- Time to citizenship 120
- Time to permanent residency 60
- Visa-free countries 181
- Financing available No
permanent residency benefits
temporary residency benefits
Its official language is Estonian, although about a third of its population is Russian-speaking. In 2011, the Euro (EUR) replaced the Estonian kroon (EEK) as its official legal tender currency. The country also stands out for its responsible public finances, being the least indebted state (9.6% of GDP) of the OECD.
Estonia is a world leader in digital governance and is one of the most digitally advanced countries. All Estonians receive a digital ID card that gives them access to around 4,000 services online, from managing their finances, registering companies, signing digital contracts, paying taxes or asking for prescriptions, and even voting. They are also pioneers in the conception and implementation of the E-Residency, a transnational digital identity card for non-residents issued and backed by the Estonian Government.
Visa Free Travel
To be a considered a tax resident in Estonia you must have a permanent residence and/or stay in the country more than 182 days in a 12-month period.
Tax residents are subject to income tax on their worldwide income at a flat rate of 20%. Non-residents pay taxes on their income accrued in Estonia.
Capital gains are considered ordinary income and taxed at the standard income tax rate. Investment income is usually taxed at normal rates. However, a tax deferment may be available under an investment account scheme where individuals can reinvest investment income and capital gains tax-free.
Domestic dividends are exempt from taxation; dividends obtained abroad are exempt provided they were taxed on source. Interest from financial institutions of the EEA are tax-exempt. Rental income and royalties are taxed as ordinary income.
On January 3rd 2019, Estonia implemented the EU-wide Anti-Tax Avoidance Directive Measures, which include new rules on controlled foreign companies (CFCs).
The V.A.T. standard rate is 20%. Reduced rates of 9% and 0% apply to certain goods and services.
Land is subject to a property tax that ranges from 0.1% to 2.5%, except for residential land. There are no transfer, inheritance and net worth taxes in Estonia.
Regarding corporate taxation, resident entities are subject to tax on their distributed profits at a 20% tax rate. Non-resident entities are subject to tax on their income accrued within Estonia.
Undistributed profits may be retained in an Estonian entity tax-free.
To learn more about the Estonian corporate legal framework, taxation and tax treaties, check out incorporations.io/estonia.
This should not be construed as tax advice. We have access to a global network of qualified attorneys and accountants who can give you the proper advice for your particular circumstances. Contact us for further information.
- Property tax Yes
- Transfer tax No
- Inheritance tax No
- Net worth tax No
- CFC law No
- Tax residency days 183
- Personal income tax rate 20%
- Capital Gains tax rate 20%
- Investment income tax rate 0%
- Territorial taxation No