Tütarettevõtted

Tütarettevõtted, which translates to subsidiaries, are legal entities that are controlled by a parent company. Control is typically established when the parent holds more than 50 % of the voting rights or has the power to direct the subsidiary’s operations through agreements or statutes. Although a subsidiary may operate independently and maintain its own management structure, the parent company is ultimately responsible for its overall strategy and financial performance.

In Estonia, subsidiaries are governed by the Estonian Companies Act and the Acquisitions Act. The parent company must register a controlling interest in the subsidiary, disclose related party transactions, and, for listed companies, submit annual reports that include consolidated financial statements. Subsidiaries can be established in various forms such as registered association, private limited company (OÜ), or public limited company (AS), depending on the parent’s objectives and the industry context.

Subsidiaries serve several strategic purposes. They can isolate financial risk, allowing the parent to protect its assets from potential liabilities of the subsidiary. They also facilitate market entry by enabling a company to operate under local regulations and cultural norms. Additionally, subsidiaries provide flexibility in tax planning, as many jurisdictions offer favorable tax regimes for foreign-owned companies.

Examples of prominent Estonian subsidiaries include those of multinational corporations that own local digital infrastructure or manufacturing units in Estonia. These entities benefit from the country’s high digital maturity, efficient corporate registration procedures, and favorable tax incentives for research and development.

Overall, tütarettevõtted play a pivotal role in corporate structures, offering operational autonomy, risk management, and strategic advantages for both domestic and international firms within Estonia’s regulatory framework.