how to start a non-profit organisation in estonia

An overview of founding a non-profit organisation or ‘MTÜ’ in Estonia as an e-resident: the requirements, process, and all you need to know as a board member

How to start a non-profit in Estonia? How to start MTÜ as an e-resident of Estonia?
Have a cause you care about? E-residents can start a non-profit organisation in Estonia online.

Thinking of starting a non-profit organisation? Consider Estonia, where there are multiple forms of not-for-profits. The most common among them is the MTÜ (or mittetulundusühing in Estonian), which this article will focus on.

Definition of a non-profit organisation in Estonia

In Estonia, a non-profit organisation is a legal entity that is established for the purpose of serving the public interest and is not operated for profit. The activity of a non-profit association in Estonia is regulated by the Non-profit Associations Act.


A non-profit organisation (NPO) | In Estonian: Mittetulundusühing (MTÜ)


Forming a MTÜ (non-profit) is slightly different than the process of founding an OÜ (Ltd), the most common form of business in Estonia. Similar to an OÜ, you can found an MTÜ entirely online – including as an e-resident. But in contrast, an MTÜ requires at least two founding members and must have a non-profit objective.

Here, I will go over some of the requirements of founding a new MTÜ. I’ll also provide some tips, which will come in handy once your new non-profit is already up and running.

How to start a non-profit. Step by step guide:

Things you need to know before you found a non-profit in Estonia

Key things in order to found a non-profit association

  • MTÜs require at least two founding members and must have a non-profit objective
  • Forming the MTÜ can be done fully online if all founding members have an Estonian or e-resident digital ID
  • An MTÜ’s articles of association should not conflict with the Estonian Non-profit Association Act 

Founders of a non-profit

Before you start a non-profit organisation, the first and perhaps most important task is to find your co-founder. Unlike an OÜ, an MTÜ must have at least 2 founding members. There is no legal requirement that both of these founders must be e-residents or Estonian citizens/residents. But, it would be useful and save a lot of time if each board member is able to sign in to Estonian e-services and give digital signatures. There are of course methods to found an MTÜ without digital signatures, but these will include visiting a notary (which may require travelling to Estonia) and using paper. It’s much easier to become an e-resident first.

Articles of Association

Another crucial detail to think about is your MTÜ’s articles of association. The articles are the set of most basic and fundamental (legal) rules your MTÜ must adhere to. They are generally set out in a document called a memorandum of association. This document must be agreed and approved when you start your non-profit organisation, after which the life of your MTÜ will be guided by the articles therein.

Your articles of association must include the following: 

  • The name of your MTÜ. You can check whether the name you’re considering is available here.
  • The location of your MTÜ. For MTÜs whose management board is located abroad, finding a business service provider to act as a legal address and contact person is also a must. E-residents can find some service providers who work with MTÜs listed on our Marketplace
  • The objectives of your organisation – this is generally stated as a mission and or/vision of your organisation. The objective or main activity of the MTÜ cannot be the earning of income from economic activity. 
  • Information on members, how to become a member, how to revoke membership and other relevant information
  • The rules of your MTÜ regarding general meetings (the highest decision making body of an MTÜ according to Estonian law), including procedures for calling a meeting, quorum, voting procedures (including the procedure to change the memorandum of association itself!)
  • The number of seats in your management board
  • Departments of your organisation, if they exist
  • And lastly, distribution of assets upon dissolution. 

Memorandum of Association

The memorandum of association itself, with which you found the organisation, must include:

  • The name of your MTÜ (same as in articles)
  • The location of your MTÜ (same as in articles)
  • The objectives of your organisation (same as in articles)
  • The names and addresses or offices of the founding members, as well as their Estonian personal identification codes
  • The obligations of the founders, for example, covering the state fee needed to found the organisation
  • The names and addresses or offices of the representatives of the management board (don’t worry, this isn’t a lifelong position as rules for electing the next management board will likely be set in place with your articles of association)

Estonian Non-profit Association Act

Your articles of association cannot conflict with the Estonian Non-profit Association Act. For example, the Act states that a “Notice of the general meeting shall be given at least seven days in advance unless the articles of association prescribe a longer term” (§ 20.(5)). This means that your MTÜ cannot set a shorter notice period in its articles. In this example, the Act does allow a longer deadline, however the statutory minimum is set at 7 days.

This example illustrates that the Act does a lot of the work for you in regulating aspects of your MTÜ. Other examples include how a general assembly is minuted or who covers the cost of holding in-person meetings. The Act will apply, unless you adjust them in your own MTÜ’s articles. So, unless you want to change any of the standard statutes as expressed in the Act, there is actually no need to state them in your articles.

The Act is the law most directly connected to your MTÜ, so get familiar with it!

Tips when drafting your Articles

When drafting your articles, here are a couple of tips to make life easier and maximise flexibility.

Making an official change to your MTÜ, be it a new document or changing board members, requires the signature of all existing managing board members. So, if you happen to have an MTÜ which requires more than one managing board member to sign off on official changes, make sure your e-Residency digital IDs are up to date and you can indeed give the much needed signatures!

It’s also useful to set the articles in a way which gives the managing board some flexibility (e.g. setting the number of board members as a maximum and minimum instead of a set number, i.e. 2-5 instead of 3).

Finally,  we recommend creating an additional document (e.g. standing orders) instead of settling everything within the articles. Why is this useful? Well, for each change of the articles the MTÜ must enter a signed amendment into the Estonian business registry. Each amendment is subject to a 10€ state fee to the business registry. In contrast, there is no formal amendment process for each change of the standing orders. So, having standing orders will save you and your MTÜ time and money.

Register the non-profit online in Estonia

Founders can formally apply to submit their MTÜ (non-profit) and the associated memorandum online in the Estonian business registry. You can do this easily in just a few steps by logging in with your e-Residency digital ID. The state fee for submitting this application is 20€. If all documents and information are in order, your MTÜ will be registered within five business days. 

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Things you need to know as a board member of a non-profit

Key points for board members of non-profit

  • MTÜs must submit an Annual Report of their accounts and activities
  • The General Assembly of the MTÜ must vote on and adopt the MTÜ’s annual report prior to it being submitted online in the e-Business registry
  • MTÜs don’t distribute profits so won’t need to pay income tax on distributed profits, but otherwise their tax obligations are largely similar to OÜs

Annual Report for non-profits

Once you start your non-profit organisation, the real work begins. Like other forms of business, an MTÜ requires you to submit an Annual Report. The first time you will need to do this is May of the year following the founding of your MTÜ. This is a report you will have to submit even if your MTÜ has had no activities and expenses. Typically, MTÜ’s will hire the services of an experienced accountant for this. E-residents can find accounting service providers who work with MTÜs on our Marketplace.

The report itself consists of two parts – your annual accounts and your management report. The annual accounts report is a thorough overview of the MTÜ’s balance sheet, income statement, cash flow statement and statement of changes in owners’ equity. Along with this, you must also report any donations or gifts your MTÜ has received during the fiscal year. 

 The second part of your annual report will be a management report, which includes an overview of “significant events which have occurred during the financial year and the likely future developments”. In addition to fulfilling a formal legal obligation, MTÜs can also see this annual report as an opportunity to take account of all you have done over the past (fiscal) year and steps to take going forward.

MTÜs function slightly differently than OÜs with respect to the Annual Report. How? Well, the General Assembly must vote on and adopt the report prior to its submission online through the business registry.

General Assembly of Members

Since for the most part, MTÜs don’t call for regular general assemblies and adopt documents, but rather work on their cause, the calling of a general assembly to adopt the annual report is sometimes its first brush with the formal procedures of life as an MTÜ. 

For most MTÜs who have a small number of members and a similarly small managing board, the title of general assembly may be much more daunting than the meeting itself. In essence, your members must simply go over the report and verify through a vote that they find the report to be accurate and truthful. Submitting this report is also one of the few exceptions to each business registry document needing the signatures of each managing board member. Since 2016, after a change to the Accounting Act, the annual report needs only a single board member’s signature.

When reading the law itself, it may not be obvious that you can hold general assemblies and other meetings and vote online. But in reality, there are tried and true methods of meeting and voting partially or fully online. Needless to say, some of these practices faced quite a stress test during the Covid crisis. 

Voting in General Assemblies

The simplest way of organising online voting is via email. For most MTÜs with few members and limited budgets, it’s perfectly sufficient to hold votes through a chain of emails. Each member can officially record their vote in an email and have it minuted. There are online meeting and voting systems out there to use if your MTÜ has a larger pool of members. When using a more comprehensive online voting system, for certain topics you must minute the number of votes. For example, approving the annual report, voting for new board members, or changing your articles. It’s thus a good idea to build this into the process from the start to avoid manual counting of votes.

Taxation basics for non profits in Estonia

When you start a non-profit organisation, your aim is not to generate profit. Thus, taxation differs from taxation of limited companies. As MTÜs cannot distribute profit, corporate taxes on distributed profits aren’t something MTÜs have to think about. Regarding other taxes, the situation for MTÜ’s on the whole is actually not very different from regulations regarding OÜs. MTÜs are also subject to the same regulations on VAT, fringe benefits, payroll taxes, management board remuneration, etc. Donations to MTÜs by private individuals come with some exemptions on income tax. However, MTÜs themselves have to pay income tax on gifts or donations, unless they’re subject to a specific incentive.

Further reading to help you start a non-profit organisation in Estonia

Before you start a non-profit organisation in Estonia, read these further resources:


This article was written by Katrina Koppel, Customer Support Quality Manager at e-Residency. If you have ever written to our support team, Katrina may have assisted with your query.


Find more in-depth, support-focused content on the e-Residency Knowledge Base.

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