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The Estonian trading company

The Estonian trading company

Commerce, as an economic resource, is characterized by the number of trading companies, trade area, assets, number of employees, calculated on the basis of their different operational activities and efficiency indicators. Estonian economic activities are regulated by NACE (The European classifications for economic sectors), which came into effect from January 2008 and contains the basis for wholesale and retail commerce in Estonia.

What are the features of trading in Estonia?

The Chamber of Commerce in Estonia has the purpose of assisting the spatial, temporal, qualitative and quantitative relations between the production and consumption and any Estonian trading company must obey certain values:

– Space functionality value – due to the spatial separation of production and consumption of goods, making them available wherever the customer requires them.

– Time functionality – related to production and consumption time, making possible the creating of trade stocks.

– Quantitative Function – Converting large production quantities into smaller intakes.

– Quality Function- which defines specialized producers for certain types of consumers.

– Credit function – which consists of financial assistance: the manufacturer will continue to produce the good before collecting the payment.

A trading company must follow the Estonian VAT registration procedure in order to start its activities.

Which are the Estonian trading companies?

Trade in Estonia is defined as any profit-seeking activity that implies the intermediate of goods from the manufacturer to the consumer, related to the procedure of purchasing goods and selling them to third parties, without being processed by the negotiator.

Trade forms in Estonia can be explained through the concept of institutional trading, which includes only those entities whose main business is trading in a functional sense.

An Estonian trading company organizes entrepreneurial activities simultaneously on selling and buying markets. Commercial enterprises can be classified in accordance to different characteristics (form of operation, location, size) and several types of business structures are available for trading activities in Estonia:

  • – A public limited company, can be an Estonian trading company, having the following features: a public limited company is a company that has equity capital divided into shares, the shareholders are not personally liable for the company’s obligations, while the company is liable for its obligations with all its assets and the company’s share capital shall not be less than EUR 25,000;
  • – A limited liability company can operate as an Estonian trading company, in which the shareholders are not liable for the company’s obligations and the minimum share capital that must be deposited at the incorporation moment is EUR 2,500;
  • – A cooperative is a company whose goal is to support and promote the economic interests of its members through the joint economic activity and needs a share capital of EUR 40,000 to be incorporated;
  • – A general partnership can also be formed as an Estonian trading company, being a type of business where the shareholders operate under a common business name and are responsible for all the company’s commitment: debts and legal requirements.

Estonian trading companies are required to obtain EORI numbers.

Are you interested in opening an Estonian trading company? If you want to know more about trading in Estonia and you need to set up a company for commercial purpose, please contact our specialists who can help you open a company in Estonia.

We can also guide you on fintech regulations. As the first law to establish the European legal framework for virtual currencies, Estonia was the first nation to implement EU Directive 2015/849 to national laws in 2017. Virtual currencies are defined under the Estonian Money Laundering and Terrorist Financing Prevention Act and related laws, which also impose additional legal requirements on cryptocurrency vendors and wallet providers, including stringent reporting requirements. If you want to set up such a business, you need to apply for a crypto license in Estonia.