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If you're considering establishing a holding property company in Estonia, you're making a strategic choice. Whether your focus is on managing real estate investments, acquiring property assets, or consolidating property holdings, Estonia offers a range of benefits for such ventures. The country’s business-friendly environment includes a number of specialized services from firms like Eesti Consulting and 1Office, which support property management and investment activities.
Estonia in Numbers
Estonia’s e-Residency program is a pioneer in digital identity and continues to gain momentum, providing unprecedented opportunities for global entrepreneurs to operate their businesses seamlessly across borders. Recent statistics from SimplBooks.ee underscore the significant impact and growth of the e-Residency program:
Over 112,700 e-residents are now registered, marking a significant global uptake and interest. E-residents have established more than 30,200 companies in Estonia, showcasing the program’s effectiveness in facilitating remote business operations. In March 2024 alone, 1,077 new e-Residency applications were processed, highlighting the program’s ongoing expansion and appeal.
Application for e-Residency card is a must
To start, visit the official e-Residency portal at eresident.gov.ee and complete the online application form. You’ll need to upload a copy of your passport, a photo, provide personal details, and explain your reasons for applying. The application fee is €100 if you opt to pick up your e-Residency card at a Service Point of the Police and Border Guard Board in Estonia. If you prefer to collect it from an Estonian embassy, the fee is €120 (€100 for the application and €20 for courier services), payable online during the application process.
After submission, a background check will be conducted, which can take several weeks. Once approved, you'll receive an email notification, and you can then collect your e-Residency card at your chosen pickup location, either in Estonia or at the selected Estonian embassy.
Choosing a Service Provider
To set up a company in Estonia, you need a "Service Provider" who can offer a registered address, provide a contact person service, and guide you through the process of company registration. Below are some options to consider. administrative support tailored for e-residents and digital entrepreneurs.
Startup Estonia offers comprehensive support for startups, including company registration assistance, mentoring, and access to funding opportunities.
FiduLink provides company formation services, virtual office solutions, and accounting support for e-residents and international businesses.
Aperture focuses on company registration, accounting services, and compliance solutions for businesses operating in Estonia.
e-Estonia assists with company formation and offers various services related to business setup and management for e-residents.
TAMO provides company formation, accounting, and legal services, with a focus on supporting international businesses and e-residents in Estonia.
How works Holding Company?
A holding company acts like a financial manager for various assets such as properties, stocks, or other companies. Its primary role is to separate financial risks and investments, protecting the owners from potential losses. If one of its investments faces financial issues, the owners' exposure to risk is minimized.
Holding companies earn money in two main ways:
From Their Assets: They make money through the profits of the companies they own or by selling parts of these companies at a profit.
Operational Efficiency: They can increase profitability by streamlining operations. For instance, a holding company that owns several businesses might provide shared services like IT or HR, reducing costs and boosting overall earnings.
Why Choose Estonia for a holding company location?
Estonia is an attractive location for setting up a holding company primarily due to its unique tax policy. The country offers a 0% corporate tax rate on retained earnings. This means that if your holding company reinvests its profits into the business rather than distributing them as dividends, it does not incur any corporate tax on those retained earnings. This policy encourages growth and investment, allowing holding companies to scale their operations more effectively without the burden of corporate taxation on reinvested profits.
Example of using this structure
Imagine that you have a company dealing with properties for sale in Costa del Sol . It’s nautral that this company is registered in Spain because this business is connected with properties located in the Spain. But this is a field ideal for launching holding company .
The 🇪🇪 Estonian Holding Company owns 100% of the shares in the 🇪🇸 Spanish Company. This structure means the Estonian entity has full control and ownership over the Spanish business, managing its operations and decisions entirely from Estonia. To set up this arrangement, you will need the assistance of a notary public and a professional company to help you with the registration and establishment of this specialized structure.
Conclusion: Choose Estonia for Real Estate Holding Location
Estonia offers a compelling array of benefits for establishing a real estate holding company. With its 0% corporate tax on retained earnings, businesses can reinvest profits back into operations without incurring additional tax liabilities. The country’s advanced digital infrastructure and efficient e-Residency program streamline company registration and management, allowing you to operate seamlessly from anywhere in the world. Additionally, Estonia's transparent legal framework and vibrant business ecosystem provide a supportive environment for growth and innovation. By choosing Estonia as the location for your real estate holding company, you position yourself to leverage these advantages, ensuring both financial efficiency and operational flexibility.
About Paweł Krok
Pawel Krok is a respected expert in business consulting and corporate management. At Eesti Consulting, he helps lead important projects and build international connections. With a strong background in finance and planning, Pawel is committed to promoting sustainable business practices and global economic growth. His recent work with the World Bank shows his dedication to tackling global issues and making a positive impact.
