Branches and subsidiaries in Estonia are both very good options for foreign investors who want to open a company in Estonia. They are suitable business forms for parent companies abroad that want to expand their activities in Estonia.
In general, subsidiaries and branches in Estonia are taxed in the same way. There is no branch profits tax in Estonia. Subsidiaries in Estonia may be subject to more tax planning options for efficient profits repatriation from Estonia.
Our law firm in Estonia can offer you numerous services for companies and business, like company management services.
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Opening a branch in Estonia in 2026
A branch is a good business option for parent companies that want to have full control over their filial in Estonia. A branch is not an individual legal entity, thus the parent company is fully liable for the actions of the branch. The incorporation procedure for this type of company is straightforward and the process usually lasts less than compared to other companies.
An Estonian branch must be registered at the Companies Registry in order to perform commercial activities. The registration certificate is usually issued within a few working days. A representative of a parent company can open a branch in Estonia with the help of a power of attorney that allows him or her to take any actions for this purpose.
A subsidiary in Estonia
Estonian subsidiaries are treated the same as any other company in Estonia. This means that they are fully liable for their own actions and do not depend in any way on the parent company abroad. Usually, subsidiaries in Estonia take the form of private limited liability companies and public limited liability companies.
Like the branch, the subsidiary must also be registered in order to perform business activities. Our attorneys in Estonia can help you register the company at the Estonian Commercial Register. Also, these types of companies will also need to be registered for VAT.
Positive economic performance expected
Estonia’s economy is recovering, according to the Bank of Estonia’s most recent prediction, with growth in 2026 being fuelled by expanding export markets and government initiatives.
The Central Bank stated that while an increase in government spending will boost the Estonian economy, changes to income tax will increase people’s earnings. A more optimistic perspective is also being influenced by lower interest rates, ongoing bank lending availability, and declining inflation.
Estonia’s GDP is expected to rise by 3.6% in 2026, but growth is predicted to decelerate to 2.5% by 2028. The Government will also play an important role in the future economic status of the country, as it will provide financial help to businesses.
The choice to incorporate a branch or a subsidiary in Estonia in 2026 is mainly made considering the level of independence these two types of companies have. For more details on company registration in Estonia and doing business here, please contact our company formation representatives in Estonia.