Comparing Estonia and Ireland as Jurisdictions to Register a Company as a Foreigner

A country's reputation in the business world plays a significant role in attracting foreign entrepreneurs. The Ease of Doing Business ranking by the World Bank and the Potential Available B2B Market Size are good indicators of a jurisdiction's reputation.

Estonia ranks high in the Ease of Doing Business index, with a well-established digital infrastructure and a thriving startup ecosystem. This small Baltic nation has already produced 10 unicorns (startups valued at over $1 billion), making it the European leader in the number of unicorns per capita.

Ireland is also highly regarded for its business-friendly environment and ranks high in the Ease of Doing Business index. The country is known for its low corporate tax rates and has attracted numerous multinational corporations, making it a popular choice for registering a company as a foreigner.

Forming a corporate entity in another country requires time and money, including share capital, incorporation service fees, and the number of days required for the registration process.

In Estonia has lowered minimum share capital to €1 just this year. And the incorporation fees are relatively affordable — €290, and the process is quick and straightforward, usually taking only 1-2 business days.

In Ireland, the minimum share capital required for a private limited company (LTD) is €1, with no deferment option. Incorporation fees are also affordable, and the registration process typically takes 2-3 weeks.

The ease of doing business in a jurisdiction is an essential factor to consider when choosing a location for company registration.

Estonia has a well-developed digital infrastructure, allowing entrepreneurs to manage their businesses online efficiently. The country offers various e-government services, making it easier for foreign entrepreneurs to register and maintain their companies in Estonia. The country's e-Residency program allows non-residents to establish and manage Estonian companies remotely.

Ireland also has a robust digital infrastructure and offers e-government services to entrepreneurs, making it easy to do business in the country. However, compared to Estonia, Ireland has a more complex administrative process for company registration and maintenance.

Understanding a jurisdiction's tax system is crucial when selecting a location for company registration.

Estonia has a unique tax system where corporate income tax is not levied on retained or reinvested profits. This means that companies only pay tax on distributed profits (dividends) at a rate of 20%. Additionally, the VAT rate in Estonia is 20%.

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Ireland is known for its low corporate tax rate of 12.5% on trading income, making it an attractive location for businesses. However, unlike Estonia, Ireland does not have a tax exemption on retained or reinvested profits. The standard VAT rate in Ireland is 23%.

Some entrepreneurs may have specific requirements that could outweigh all other factors when choosing a jurisdiction for company registration.

Estonia is an excellent choice for entrepreneurs looking for a digital-first approach to business management. With its e-Residency program and advanced e-government services, Estonia enables foreign entrepreneurs to manage their businesses remotely with ease.

Ireland is an attractive option for businesses looking to establish a presence in the European Union with a low corporate tax rate. The country has a large, skilled workforce and an English-speaking population, making it a popular choice for multinational corporations.

The process of registering a company varies between jurisdictions, with some countries offering more straightforward and faster procedures than others.

In Estonia, the company formation process is quick and straightforward. Entrepreneurs can register their company using an e-Residency card or by issuing a notarized Power of Attorney. The process typically takes 1-2 business days when using the e-Residency card and 1-2 weeks when using a Power of Attorney.

In Ireland, the company registration process is more complex than in Estonia, typically taking 2-3 weeks to complete. Entrepreneurs are required to submit various documents and forms to the Companies Registration Office (CRO) to register their company.

The company structure differs between jurisdictions, with each country having its own set of rules and regulations governing the formation and management of companies.

In Estonia, the most common form of business entity for foreign entrepreneurs is the limited liability company (OÜ). An OÜ requires at least one shareholder and one board member, with no residency requirements for either role.

In Ireland, the most common form of business entity for foreign entrepreneurs is the private limited company (LTD). An LTD requires at least one director who is a resident of the European Economic Area (EEA) and one secretary, who can be a non-resident.

Access to banking and financial services is crucial for businesses operating in a foreign jurisdiction.

Opening a bank account in Estonia for non-residents has become more challenging in recent years due to increased regulations. However, Estonian companies can still open accounts with payment service providers (PSPs) and electronic money institutions (EMIs) across Europe.

Those are basically the same bank accounts allowing your to work perfectly. And you won’t need to travel anywhere to open a bank account.

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Opening a bank account in Ireland is relatively straightforward for foreign entrepreneurs, with many international banks offering services to Irish companies. However, some banks may require a physical presence in the country to open an account.

In conclusion, both Estonia and Ireland offer numerous benefits for foreign entrepreneurs looking to register a company. Estonia stands out for its digital-first approach, unique tax system, and ease of doing business.

That’s why we highly recommend opening a company in Estonia. Enty can help you open a company with e-Residency in a matter of 1 day. Together with that, our Control Panel offers a unique set of tools to ease up paperwork for your company: invoicing, contract creation, hiring, and accounting automation.