The most popular type of legal entity being set up by foreigners in Estonia is the so-called "Osaühing, OÜ", or Private Limited Company.

Private Limited Company (osaühing or OÜ)

A private limited company is a company that has its share capital (in Estonian: osakapital) divided into private limited company shares (in Estonian: osad). A shareholder will not be personally liable for the obligations of the company. A private limited company is liable for the performance of its obligations with all of its assets.

The share capital must be a minimum of EEK 40,000 (approx EUR 2,556). The minimum nominal value of a share is EEK 100.

A private limited company must have a management board. The management board is a directing body of the private limited company which represents and directs the private limited company. The management board may have one member (director) or several members. A member of the management board need not be a shareholder. A member of the management board must be a natural person with active legal capacity. At least one half of the members of the management board shall have their residence in Estonia, or in another Member State of the EEA or in Swiss Confederation.

A private limited company shall have a supervisory board if the share capital is greater than 400,000 kroons (approx EUR 25,560) and the management board of the private limited company has less than three members, or if prescribed by the articles of association of the private limited company. A private limited company shall have an auditor if the share capital of the private limited company is greater than 400 000 kroons (approx EUR 25,560) or if prescribed by law or the Articles of Association. An auditor is also mandatory when the company surpasses certain threshold values in terms of turnover, number of employees and asset value.

Public Limited Company (aktsiaselts or AS)

A public limited company is a company that has a share capital (in Estonian: aktsiakapital) divided into public limited company shares (in Estonian: aktsiad). A shareholder is not personally liable for the obligations of the public limited company. A public limited company is liable for the performance of its obligations with all of its assets. One or more natural or legal persons without or with share subscription may found a public limited company.

Share capital must be a minimum of EEK 400,000 (approx EUR 25,560) and the minimum nominal value of a share should be EEK 10. Shares shall be registered and entered in the Estonian Central Register of Securities. The rights attached to registered shares belong to the person who is entered as the shareholder in the share register.

A public limited company must have a Management Board and a Supervisory Board.

The management board is a directing body of the public limited company which represents and directs the public limited company. A member of the management board need not be a shareholder. The management board may have one member (director) or several members. A member of the management board must be a natural person with active legal capacity. A member of the supervisory board shall not be a member of the management board. At least one half of the members of the management board shall have their residence in Estonia, in another Member State of the EEA or in Swiss Confederation.

The supervisory board shall plan the activities of the public limited company, organise the management of the public limited company and supervise the activities of the management board. The supervisory board shall notify the general meeting of the results of a review. The supervisory board shall give orders to the management board for organisation of the management of the public limited company. The supervisory board shall have three members unless the articles of association prescribe a greater number of members. A member of the supervisory board must be a natural person with active legal capacity.

A public limited company must appoint an auditor.

General Partnership (täisühing or TÜ)

A general partnership is a commercial undertaking in which two or more partners operate under a common business name and are solitarily liable for the obligations of the partnership with all of their assets. A general partnership will operate on the basis of the partnership agreement concluded by the partners. There is no minimum capital requirement and partners shall make monetary or non-monetary contributions in the amount prescribed by the partnership agreement.

Limited Partnership (usaldusühing or UÜ)

A limited partnership is a company in which two or more persons operate under a common business name, and at least one of the persons (general partner) is liable for the obligations of the limited partnership with all of the general partner's assets, and at least one of the persons (limited partner) is liable for the obligations of the limited partnership to the extent of the limited partner's contribution.

A limited partner shall not have the right to manage or represent the limited partnership unless the partnership agreement prescribes otherwise. A limited partner who has paid a contribution in full shall not be liable for the obligations of the limited partnership and he or she is entitled to the corresponding part of its profits.

Sole Proprietorship (füüsilisest isikust ettevõtja or FIE)

A sole proprietor shall be entered in the commercial register on his or her petition, or on another basis provided by law. A sole proprietor shall be liable for his or her obligations with all of his or her assets.

Additional information

Estonian Commercial Code: http://www.legaltext.ee/et/andmebaas/tekst.asp?loc=text&dok=X0001K17&keel=en&pg=1&ptyyp=RT&tyyp=X&query=%E4riseadustik

Estonian Central Register of Securities: https://e-register.ee/index.php?lang=en