Prikhodko&Partners
Services
International corporate law
Business Setup and Support in Estonia Liquidation of the company in Estonia

Taras Miroshnychenko

Head of practice

E-mail

miroshnychenko@prikhodko.com.ua

Phone numbers

Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.

Liquidation of the company in Estonia

Liquidation of a company in Estonia is a process that includes several stages and requirements that must be met in order to officially close the company.

In this article, we will look at the main aspects of liquidating a company, including the terms, process, timing and the possibility of closing through a sale and purchase.

Conditions of liquidation of the company

Liquidation of the company can be voluntary or compulsory.

The main reasons that can lead to liquidation include:

Voluntary decision by the owners: The owners of the company can decide to close the business at their own will.
Inability to meet obligations: If a company is unable to meet its financial obligations, a decision may be taken to liquidate it.
Expiry of the company: If the company was formed for a certain period, the expiry of this period may be grounds for its liquidation.
Court decision: the court may decide to liquidate the company in various circumstances, including violations of the law.

The process of liquidation of the company

The process of liquidation of a company in Estonia includes several main stages:

Making a decision on liquidation

The first step is the decision to liquidate the company. This decision must be approved by the general meeting of shareholders or owners of the company.

Appointment of liquidator

A liquidator is appointed to carry out the liquidation process, who will be responsible for all legal and financial aspects of closing the company.

Public announcement

The liquidator must make a public announcement about the liquidation of the company in the relevant registers. This is necessary so that creditors can present their claims.

Solving financial issues

The liquidator collects the company’s assets, settles with creditors and resolves all financial issues. This includes paying taxes, paying wages to employees, and other obligations.

Closing bank accounts

After fulfilling all financial obligations, the liquidator closes the bank accounts of the company.

Submission of the final report

The liquidator submits the final liquidation report to the Commercial Register. After its approval and passing all checks, the company is officially considered liquidated.

Terms of liquidation

The terms of liquidation of the company may vary depending on the number of assets, liabilities and the complexity of the procedure. On average, the liquidation process can take from several months to a year.

It is important to note that each case is unique and the terms may vary.

Closing the company through sale and purchase

One way to close a company is to sell it.

The procedure for selling a company includes the following steps:

Search for a buyer

The owners of the company are looking for potential buyers who are interested in acquiring the company. It can be another company or individual.

If necessary, the lawyers of the company “Prikhodko and Partners” will help you in finding an interested person.

Company valuation

To determine the fair sale price, an assessment of the company’s value is made, taking into account its assets, liabilities and potential.

Conclusion of a sales contract

After reaching an agreement, a sales contract is concluded between the seller and the buyer, in which all the terms of the agreement are fixed.

Transfer of ownership rights

After signing the contract, the ownership of the company is transferred to the buyer. This includes re-registration of the company with the relevant authorities.

Closing financial issues

The buyer assumes all obligations of the company, including payment of debts and fulfillment of contracts.

Closing a company through a sale and purchase can be a faster and more profitable option for the owners, as it avoids a lengthy liquidation process.

Liquidation of a company in Estonia is a complex and multi-stage process that requires a careful approach and compliance with all legal regulations. The choice between voluntary liquidation and sale of the company depends on the specific circumstances and goals of the owners.

Regardless of the path chosen, it is important to ensure that all procedures are followed correctly and in a timely manner to successfully close the business.

The lawyers of the company “Prikhodko and Partners” will provide you with high-quality and quick advice on liquidation or purchase and sale of corporate rights and will accompany you in such a difficult procedure with minimal involvement of you in the process

Calculate the cost of services

1 question

Are you interested in the complete liquidation of a company in Estonia?

Yes

2 question

Are you interested in the liquidation of a company in Estonia through the purchase and sale of corporate rights?

Yes

3 question

Do you need advice on liquidation of a company in Estonia?

Yes

Is there really no corporate income tax in Estonia?

Estonia applies a deferred taxation system. This means that while profits remain in the company’s accounts or are reinvested in its development, the corporate income tax rate is exactly 0%. Tax is paid only when funds are distributed in favour of the founders.

What is the current tax rate on dividends? (Does the 14% preferential rate still apply?)

The preferential 14% tax rate on dividends was completely abolished from 1 January 2025. Currently, all distributed profits (dividends) are taxed at a single rate of 22% (calculated using the 22/78 formula on the amount of the distribution).

Can I open an account with a traditional Estonian bank remotely?

No. Traditional Estonian banks require proof of a close economic connection with the country (substance) — the presence of a genuinely leased office in Tallinn and employed resident staff. For remote businesses operating through e-Residency, the optimal and reliable solution is to use licensed payment institutions (EMIs) that provide full IBAN accounts.

Is a company required to pay a salary to its director?

Estonian law does not require a company to pay a mandatory salary to its director. If you are a tax resident of another country and do not live in Estonia, you may also be exempt from paying Estonian social tax (33%) provided that social insurance coverage in your country of actual residence is confirmed.

What are the conditions for obtaining a residence permit through business?

A successfully operating business is a lawful basis for obtaining a residence permit. The legislation requires an investment of at least EUR 65,000 in the company’s share capital for shareholders, or at least EUR 16,000 if the business is registered as a sole proprietorship.

Successful cases on the topic: