starting a company in ireland vs estonia

Compare the features, processes, and pros and cons of company formation in Ireland and Estonia. Check our quick-reference table showing the key features side-by-side.

There are many businesses that can be run from a different country to where they’re based. In fact, starting your company in another country to where you are can be a smarter business decision. One of the tougher decisions, though, is choosing where to base your business. 

You need to consider factors such as the ease of company set-up, costs and taxation, banking options, remote management possibilities, and local regulatory conditions. In this article, we will compare two very popular locations for remote business incorporation - Ireland and Estonia.

Benefits of starting a business in Ireland

Benefits of starting a business in Ireland:

• EU member state
• Favourable corporate tax rates
• One of only two official English language jurisdiction in the EU

Ireland has one major selling point as a place to set up your business - it’s a European Union (EU) member, and it’s also one of only two official English language countries in the EU since the UK’s departure.

It’s also seen one of the most impressive economic comebacks since the 2008 financial crash. The country’s leadership created a business-friendly environment when it introduced a flat 12.5% corporate tax rate in 1997. This was further supported by political stability, regulatory clarity, and copyright and intellectual property protections.

All of this led to Ireland becoming the top choice for EU headquarters of major tech corporations. As of 2021, around 800 US companies have operations in Ireland, including giants like Apple, Google, and Meta.

While Estonia doesn’t try to compete on the basis of low taxes, it has ranked first on the Tax Competitiveness Index each year since 2011. That’s partly thanks to its neutral and transparent tax system rooted in innovative digital services. With no corporate tax on reinvested profits, companies benefit from tax-free growth. It is also one of the top countries in Europe for most startup investments per capita.

While creating a company in both Ireland or Estonia offers the ability to enter the EU single market, there are several major aspects of how the registration and management processes differ.

How to set up a company in Ireland

• Company registration takes between three and seven days
• Company, owner, and tax registrations are separate processes
• Incorporation of business is partially online
• Non-EEA residents face additional requirements for both registration and banking

You can register mostly online through Ireland's Companies Registration Office (CRO). The most common structure is the Private Company Limited by Shares (LTD). An Irish LTD can have a single director, but if so, a separate company secretary is required. This can be arranged through a service provider.

If none of your directors live in the EEA, you have two options. You can appoint a nominee EEA-resident director through a service provider, which carries an ongoing annual cost. Or you can take out a Section 137 bond, which costs around €1,600 to €2,000 for a two-year period. A company can avoid both requirements if it can demonstrate a "real and continuous link with one or more economic activities that are being carried on in the State" under the Companies Act 2014, though this is difficult for new businesses to establish.

How to register a limited company in Ireland

Reserve and register a company name 

You can check name availability and reserve a name via the CRO's online CORE platform. Reservation costs €25 and is valid for 28 days. Name registration is included in the standard incorporation fee.

File Form A1 and a constitution via CORE

Your constitution must include:

• The company name
• A description of main business activities
• A registered office address in Ireland (a physical address, not a PO box)
• Names of company officers
• Beneficial ownership information

Most non-resident founders use a Registered Office Agent to satisfy the address requirement. The CRO fee for online incorporation is €50. Registration currently takes five to 10 working days, though backlogs can push this to two to three weeks. Documents can be submitted digitally but must be physically signed and uploaded.

Register beneficial owners with the RBO

Beneficial owners holding more than 25% of shares must be registered with the Register of Beneficial Ownership (RBO) within five months of incorporation. Filing is free and done online. Non-resident directors without an Irish PPS number must obtain an Identified Person Number (IPN) via a Form VIF, submitted to the CRO.

Register with revenue

Your CRO company number is not your tax number. You must register separately with the Irish Revenue Commissioners through Revenue's Online Service (ROS) before you can invoice clients.

Estonia comparison

Estonia’s company registration for e-residents is fully digital and benefits from the ease and speed of electronic signatures. It can be done in about as much time as it takes you to fill out the registration form and pay the state fee of €265. You could even try to break the current record of 15 minutes and 33 seconds, but the average approval process takes two hours.

With e-Residency, non-resident founders can complete business registration fully online and in a simple process that doesn’t require a third party. E-Residency service providers can help founders register and run their companies, but using their services is optional. The only service you will need as a non-resident of Estonia is a local contact person and legal address in Estonia. This and other services can be easily found online via the e-⁠Residency Marketplace, with costs starting from €200 per year.

Opening a bank account for your Irish company 

Both residents and non-residents can open a traditional bank account in Ireland. You will typically need:

• Certificate of incorporation
• Company constitution
• Form A1
• Certified photo ID (passport preferred)
• Certified proof of address

Irish banks must comply with EU Anti-Money Laundering rules, which can slow applications and may require an in-person visit. Many non-resident founders open accounts with fintech providers instead, which are faster and fully online.

The business banking options in Estonia are similar. Usually, the best option for e-⁠Residents is to open a business account with a fintech company such as Wise, Intergiro or Payhawk. Fintechs provide more flexibility as to which clients they take on and also allow full setup online. You can apply for pre-approval online for a traditional bank account in Estonia, but you will need to visit the bank in person to confirm your identity. Estonian banks also require the business to have a strong connection to Estonia. A third option is to open a business account with a bank from another EU or EEA member state. This is a good option for entrepreneurs with a good client relationship with another bank.

Running your company registered in Ireland

Key taxes and rates:

• 12.5% corporate tax on trading income
• 25% on passive income (rent, interest, foreign dividends)
• 33% Capital Gains Tax
• 1% stamp duty on share transfers (exempt if consideration is under €1,000)

Filing obligations

Most changes to your company - such as name, address, directors - can be filed online via CORE.

• First annual return: due six months after incorporation, no financial statements required
• Subsequent annual returns: every 12 months before your Annual Return Date, with financial statements
• Corporation tax return (CT1): due nine months after the end of your accounting period, filed via Revenue's Online Service (ROS)

Tax rates and incentives

Ireland’s corporate tax rate is 12.5% for trading income, which is a major draw for many companies. It's a big reason why multinational companies locate in Ireland. Ireland’s tax rate for income from an excepted trade and for non-trading income is 25%. Meanwhile, Ireland’s Capital Gains Rate is 33%. Transactions on shares are taxed at 1% of the amount paid or the market value, whichever is higher (if the value is less than €1,000, this duty can be exempted). For asset deals, the rate is 7.5%. The Irish Competition and Consumer Protection Commission reviews mergers. Ireland relies heavily on trade and has an extensive Double Tax Treaty network with more than 70 DTAs.

Another draw for registering a company in Ireland is the variety of incentives. Companies that begin trading before 31 December 2026 may qualify for a corporation tax holiday covering the first three years of trading. The full exemption applies where annual corporation tax does not exceed €40,000. Partial relief is available where the liability falls between €40,000 and €60,000.

The R&D tax credit is 35% of qualifying expenditure for accounting periods starting on or after 1 January 2026, up from 30%. Combined with the standard tax deduction, the total effective benefit is 47.5% of eligible spend. Ireland has double tax treaties with more than 70 countries.

Estonia comparison

In Estonia, an annual report must be submitted within six months after the end of the financial year, which can be done entirely online. Income and social tax returns must be submitted by the 10th of every month, and VAT returns must be submitted by the 20th of each month.

Estonia taxes corporate profits only on distribution. This means retained and reinvested profits are tax-free. When profits are distributed, the company pays 22% corporate income tax. There is no capital gains tax. Estonia has double tax treaties with more than 60 countries and has ranked first on the International Tax Competitiveness Index consecutively since 2011.

Another benefit for e-⁠residents running a business in Estonia is the dedicated support and resources provided by the e-⁠Residency team, a Marketplace of corporate service providers, the friendly and responsive Estonian Tax and Customs Board, and an ecosystem of startup incubators, accelerators and business chambers.

Comparing Ireland and Estonia for company formation

Where to form your company: Ireland or Estonia?

Reasons to set up in Ireland

• 12.5% corporate tax rate on trading income, one of the lowest in the EU
• The only English-speaking EU member state, making it straightforward to deal with agencies and service providers
• Strong startup ecosystem backed by Enterprise Ireland and Local Enterprise Offices, with funding, mentoring and networking support
• Access to the EU single market
• Extensive double tax treaty network with more than 70 countries
• R&D tax credit of 35% on qualifying expenditure, with a combined effective benefit of 47.5%

Reasons to set up in Estonia

• 0% tax on retained and reinvested profits
• Fully digital setup and administration, with no need to physically sign or attend anything in person
• Company registration takes around two hours on average
• All business services accessible in English online
• First on the International Tax Competitiveness Index since 2011
• Access to the EU single market
• e-Residency Marketplace gives founders easy access to accounting, legal, banking and tax support
• Active global community of e-⁠resident entrepreneurs, with dedicated support from the e-⁠Residency team