OÜde

OÜde, short for osaühingud (private limited liability companies), are the most common corporate form in Estonia. They are designed for small and medium-sized businesses and are available to both residents and non-residents. In an OÜ, liability is limited to the share capital, meaning shareholders are not personally liable for the company’s debts beyond their investment.

OÜs can be founded by a single shareholder or multiple shareholders. The company must have a registered legal address and a management board that handles daily operations; the articles of association govern internal rules. The company is registered in the Estonian Commercial Register, and formation can be completed online through the e-Business Register, including by non-resident entrepreneurs via the e-residency program.

Shares can be held by individuals or other companies, including foreign entities, and transfers are governed by the articles of association. The management board, appointed by the shareholders, is responsible for administration, while major decisions may require shareholder approval or a supervisory board in larger OÜs.

Taxation in Estonia operates on an attribution basis: profits are not taxed at the corporate level when retained; they are taxed when distributed as dividends. This system encourages reinvestment and growth, while distributed profits are subject to dividend taxes and other applicable obligations.

OÜ form is widely used by tech startups, service providers, and contractors seeking a simple, flexible corporate structure. They face ongoing obligations such as accounting, annual reports to the Commercial Register, and VAT or payroll-related duties where applicable. The e-residency program and online registration have contributed to Estonia’s reputation for a digital business environment.