How to Start a Business in Estonia: A Guide for Startup Founders

Starting a company these days isn’t the hard part. It’s figuring out where to set it up without losing speed to paperwork, complex tax rules, or hiring delays. Legal setup, compliance tasks, and onboarding your first international hires can drag founders into weeks of operational back-and-forth before they’ve even shipped an MVP.

Estonia has become a natural starting point for founders moving fast and thinking global from day one. With its e-Residency program, paperless administration, and startup-ready banking, you don’t need a local consultant or continued visits to break into the EU business landscape.

That said, the moment you begin scaling your team, the simple setup starts to stretch. Managing payroll across regions, tracking compliance updates, and hiring a global workforce demands far more than a clean registration process.

Deel fills these gaps by layering global infrastructure on top of your Estonian base. It helps teams handle onboarding, visa sponsorships, contracts, and compliance across 150+ countries through a single platform.

Here is a step-by-step guide on how savvy founders can scale in Europe and beyond by combining Estonia’s strengths with Deel’s unified platform.

Why is Estonia an attractive destination for startups?

Estonia extends several significant benefits to startups, including the following:

• High-density startup ecosystem: Estonia leads the EU in unicorns per capita and attracts some of the highest venture capital investments relative to population. The ripple effect from Skype’s success is still strong, with 110+ partnership organisations and a founder community that supports young talent
• Lucrative residency with wider EU access: Estonia’s e-Residency lets you start and manage an EU-based business without being physically present. That means easier tax setup, simplified compliance, and zero tariffs across the EU’s 500+ million-strong single market. Dylan Hey, a founder from the UK, used this route to launch his business while traveling across Europe. As his team grew to 11+ countries, Deel stepped in to handle contracts, payments, compliance, and keep the company lean and distributed
• Rewarding tax structure: Estonia’s 0% corporate tax rate on retained profits means you can reinvest share capital without losing cash to tax in the early years. You’re only taxed when you extract profits, and even then, it’s a flat and transparent 20%. Tax declarations are famously efficient – most take under three minutes, and refunds are typically issued within a few days
• Founder-friendly banking: Through e-Residency, founders can open and manage bank accounts online after just one visit or choose fintech alternatives that require none at all. It’s so smooth that Austrian founder Dominik Panosch managed to launch his company and open a bank account in just 15 minutes and 33 seconds
• Settling in support: Estonia’s International House helps expats and their families settle in smoothly by offering government services like cultural orientation, job support, educational assistance for children, and housing assistance

See also: Doing Business in Europe: A Comprehensive Guide

How can I start doing business in Estonia and the European market?

Estonia makes it pretty easy to start a business, and even settle down if that’s on your radar. Here’s a simple roadmap to get started:

Step 1: Choose the right entry path to set up your startup

Before you hop on a flight or commit to a full relocation, it’s worth knowing that Estonia offers multiple ways to launch your business:

• Digital Nomad Visa is a good, low-commitment option and allows you to live in Estonia temporarily while getting a real feel for the local startup ecosystem. Offers temporary residence while you scout talent, meet partners, and validate operations on the ground
• The e-Residency program gives you the tools to launch and run an Estonian company entirely online. Registration with the Estonian business register takes about 15 minutes. The full process, including background checks and ID pickup, takes 4 to 8 weeks and is fully remote-friendly. You can collect your digital ID card from an Estonian embassy or a pickup location abroad
• The Estonia Startup Visa is ideal for non-EU founders to relocate and build in Estonia with freedom of movement within the Schengen Area. Perfect for early teams who want in-person collaboration without legal hurdles

Most founders start with e-Residency because it’s fast, low-friction, and designed for cross-border entrepreneurs. Once approved, your company is legally recognized in the EU, and while the card itself needs renewal every five years, your residency remains valid.

Estonia’s welcoming stance toward digital nomads was clear in a recent chat Deel had with the program’s managing director, who shared:

See also: Moving to Estonia: A Guide for Expats and Digital Nomads

Step 2: Secure visas for your key team members

Through Estonia’s Startup Visa program, you’re allowed to bring in co-founders, early team members, or critical hires to work on-site. But every person you bring in will have to navigate their own set of visa requirements based on their role and duration of stay.

Multiply that by a few key hires, and suddenly, you’re knee-deep in embassy calls, expiration trackers, and legal forms.

That’s why so many global teams are increasingly relying on Deel’s Immigration for end-to-end visa management. With a 98%+ approval rate and processing speeds up to 3x faster than standard routes, Deel gives you the confidence to plan onboarding and relocations without delays or risk.

You can track application statuses, receive automatic alerts before any permits expire, and get faster approvals backed by a legal team that actually understands the local process.

Step 3: Hire local employees and contractors compliantly

As your business grows, hiring local talent in Estonia might become a key part of your strategy. But Estonia’s employment regulations are tightly structured and cover equity distribution, working hours, mandatory insurance, and overtime pay. If you’re also managing a global-first team, staying compliant can quickly become overwhelming.

Deel EOR takes the weight off by acting as the legal employer through our Estonian entity. The platform can handle employment contracts, payroll, and labor law compliance within the ambit of Estonian labor regulations, so you can focus on leading your team, not managing admin or risk.

If you’re building a more flexible team, Deel Contractor of Record (COR) lets you engage Estonian contractors without risking misclassification. This way, you can get support with compliant contracts, streamlined onboarding, and automated payments from a unified platform.

This is how Cake built a fully distributed team of 200 people across markets without the overhead of an internal legal department, and with $3,000+ in cost savings per hire.

Step 4: Pay your team seamlessly across borders

Estonia’s banking system is digital-first, but if you’re not living in the EU, opening a traditional business bank account can throw up some roadblocks. Residency checks, document loops, and inconsistent timelines can stall something as basic as paying your team.

A faster and simpler approach is to use Deel Global Payroll. Rather than stringing together local banks and third-party vendors, Deel offers one platform to manage payroll across borders, handling payouts, tax filings, currency conversions, and compliance updates.

FICO used this setup to pay 3,000+ people across 90+ countries and never missed a single cycle. They hit every KPI, streamlined vendor management, and eliminated the manual status checks that usually slow payroll teams down.

Step 5: Manage a global, high-performing team

Getting your Estonian business off the ground is a major milestone. The next step is building a dispersed team that can actually grow it. Whether you’re managing your workforce remotely or on the ground in Estonia, you need an HR system that supports every stage of the employee journey:
onboarding, performance reviews, and even offboarding without any complexity.

Deel HR is built exactly for that. It’s a global HRIS designed for distributed teams to automate onboarding, manage time off, run compliant payroll, distribute benefits, track equipment, and handle offboarding from a single platform.

To keep your team engaged and scaling strong, Deel Engage brings AI-powered tools for career development, performance management, and learning into one seamless experience. The platform also gives everyone– HR, managers, finance– a shared, real-time view of the team to track and monitor talent growth. Which means few blind spots, fast feedback loops, and a consistently high-performing team.

Go global from Estonia with Deel

More than 35,000 companies trust Deel to scale their teams without compromising on compliance, speed, or employee experience. Ready to see how it could work for you?

Book a free demo and let’s explore what’s possible.