General Partnership (Täisühing) in Estonia
TÜ · Formation from $14
Last verified: June 10, 2026
Corporate Tax
22.0%
State Tax
0.0%
Formation Cost
$14
Annual Fee
$0
Comparison Scores
Privacy, remote setup, banking, and tax efficiency
Calculate full formation cost
Break down one-time filing fees and recurring costs for any supported entity type.
Who Should Choose This?
Profiles that typically benefit from this entity
- Professional service providers (e.g., law firms, accounting practices, consulting agencies) where partners trust each other deeply.
- Small family businesses looking for a simple, low-maintenance corporate structure.
- Joint ventures between two existing companies collaborating on a specific project.
- Founders who want to avoid minimum capital requirements and complex corporate governance.
Who Should Avoid This?
Scenarios where another structure may be better
- Solo entrepreneurs (a TÜ requires at least two partners).
- High-risk businesses (e-commerce, manufacturing) where unlimited personal liability poses a significant threat.
- Startups planning to raise venture capital or issue equity to employees.
Advantages
- +No minimum share capital requirement.
- +0% corporate tax on retained and reinvested profits (same as OÜ).
- +Simple management structure with no mandatory board of directors (partners manage directly).
- +Can be registered and managed 100% remotely via the e-Residency program.
- +High level of partner control and flexibility in profit distribution via the partnership agreement.
Disadvantages
- -Unlimited personal liability for all partners (jointly and severally liable for business debts).
- -Requires at least two partners (cannot be a single-member entity like an OÜ).
- -Less attractive to external investors compared to an OÜ or AS due to the liability structure.
- -Transferring partnership interests is more complex than transferring shares in an OÜ.
- -Partners' personal assets are at risk if the business faces litigation or bankruptcy.
Formation Steps
Step 1: Obtain e-Residency. Apply for an Estonian e-Residency card to enable digital signatures and remote registration (takes 3-5 weeks).
Step 2: Draft the Partnership Agreement. Create a comprehensive agreement detailing profit sharing, management roles, and liability among partners.
Step 3: Secure a Legal Address and Contact Person. Hire a licensed virtual office provider in Estonia (mandatory for non-residents).
Step 4: Choose a Business Name. Ensure the name is unique in the Estonian Commercial Register and includes the appendage 'Täisühing' or 'TÜ'.
Step 5: Submit the Application. File the registration application and partnership agreement via the e-Business Register using your digital ID.
Step 6: Pay the State Fee. Pay the €20 state fee for registering a general partnership.
Step 7: Open a Business Bank Account. Apply for a business account with an EU/EEA fintech (e.g., Wise, Revolut) or a traditional Estonian bank.
Step 8: Register for VAT (if applicable). Register with the Estonian Tax and Customs Board if annual turnover exceeds €40,000.
Cost Breakdown
Detailed breakdown of formation and ongoing costs
| Item | Type | Amount |
|---|---|---|
| State filing fee | One-time | $22 |
| e-Residency application fee | One-time | $165 |
| Registered address & contact person | Annual | $300 |
| Accounting & compliance (estimated) | Annual | $600 |
| First year total | $1,087 | |
| Annual ongoing | $900 | |
Real-World Examples
Typical use cases for this entity type
- A boutique consulting firm founded by two e-residents who want a simple structure to pool their expertise and share profits flexibly.
- A small family-owned craft business operating locally in Estonia, prioritizing minimal administrative overhead.
- A joint venture between two European marketing agencies collaborating on a long-term Baltic campaign.
Common Mistakes
Pitfalls to avoid during setup and operations
- Failing to draft a detailed partnership agreement, leading to disputes over profit distribution and decision-making.
- Underestimating the risk of unlimited joint and several liability for the actions of other partners.
- Using a TÜ for a high-risk business model instead of an OÜ, exposing personal assets to creditors.
- Forgetting to appoint a local contact person, which is a strict legal requirement for non-resident partners.
- Assuming a TÜ can be formed by a single person (it strictly requires two or more partners).
Other entity types
Other formation options in Estonia
Private Limited Company (OÜ)
- Tax
- 22.0%
- Formation
- $305
Public Limited Company (Aktsiaselts)
- Tax
- 24.0%
- Formation
- $285
Sole Proprietor (FIE)
- Tax
- 22.0%
- Formation
- $14
Limited Partnership (UÜ)
- Tax
- 22.0%
- Formation
- $15
Commercial Cooperative (Tulundusühistu)
- Tax
- 22.0%
- Formation
- $215
Branch (Filiaal)
- Tax
- 22.0%
- Formation
- $215
Non-profit Association (MTÜ)
- Tax
- 22.0%
- Formation
- $32
Compare with Other Countries
| Country / Type | Tax | Formation | Annual |
|---|---|---|---|
| 🇪🇪 General Partnership (Täisühing)(TÜ) | 22.0% | $14 | $0 |
FAQ
What is the main difference between a TÜ and an OÜ?
A TÜ (General Partnership) requires at least two partners who have unlimited personal liability, whereas an OÜ (Private Limited Company) offers limited liability and can have a single founder.
Do I need to pay corporate tax in Estonia?
Estonia applies a 0% corporate tax on retained and reinvested profits. You only pay a 22% tax when profits are distributed to partners.
Can non-residents form a Täisühing?
Yes, non-residents can form and manage a TÜ 100% remotely using the Estonian e-Residency program.
Is there a minimum capital requirement for a TÜ?
No, there is no statutory minimum capital requirement for a General Partnership in Estonia.
Do I need a local director?
No, but if the partners reside outside Estonia, you must appoint a licensed local contact person and maintain a registered legal address in Estonia.
How long does it take to register a TÜ?
With e-Residency, the online registration process typically takes 1 to 5 business days after submission.
Can a TÜ be converted into an OÜ later?
Yes, Estonian commercial law allows a general partnership to be transformed into a private limited company (OÜ) if business needs change.
Are annual reports required for a TÜ?
General partnerships are generally exempt from filing annual reports with the commercial register unless one of the partners is a limited company or cooperative.
Detailed Tax Rates
Corporate Income Tax
| From | To | Rate |
|---|
Estonia applies a unique corporate tax system where retained and reinvested profits are taxed at 0%. A flat 22% tax (calculated as 22/78 of the net distribution) is levied only when profits are distributed as dividends.
Personal Income Tax (Top rate: 22.0%)
| From | To | Rate |
|---|---|---|
| $0 | No limit | 22.0% |
Estonia applies a flat 22% personal income tax rate on all taxable income. As of 2026, a uniform tax-free allowance of €8,400 per year (€700 per month) applies to all residents regardless of their income level.
Capital Gains Tax
22.0%
Capital gains are taxed as ordinary income at the flat rate of 22%. Individuals can defer taxation by using a designated investment account (investeerimiskonto) until funds are withdrawn.
VAT / GST
24.0%
Registration Threshold: EUR40,000
Non-resident providers of digital services to Estonian consumers must register for VAT under the OSS scheme or locally, applying the standard 24% rate.
Withholding Tax
Estonia does not levy withholding tax on dividends or standard interest payments to non-residents. Royalties are subject to a 10% withholding tax, which may be reduced or eliminated under double tax treaties or EU directives.
Payroll & Social Security
Employers pay a 33% social tax and a 0.8% unemployment insurance contribution on gross salaries. Employees contribute 1.6% for unemployment insurance and a 2% mandatory funded pension contribution.
Other Taxes
Fringe Benefits Tax
Benefits provided to employees are subject to 22% income tax (calculated as 22/78 of the net amount) and 33% social tax on the combined value.
Land Tax
An annual land tax is levied on the assessed value of land, with rates determined by local municipalities ranging from 0.1% to 2.5%.
Incentives & Support
0% Corporate Tax on Reinvested Profits
Estonia does not tax retained or reinvested profits. Corporate income tax is only triggered upon the distribution of dividends.
Allows businesses to grow their capital tax-free.
Eligibility: Available to all Estonian resident companies, including General Partnerships (TÜ).
e-Residency Program
A government-issued digital identity that allows global entrepreneurs to establish and manage an EU-based company 100% online.
Remote company formation, digital document signing, and online tax filing.
Eligibility: Available to non-Estonian citizens worldwide who pass a background check.
Formation Requirements
Minimum Capital
No requirement
There is no minimum share capital requirement for a General Partnership (Täisühing).
Local Director
Not Required
No local director is required, but if the management board is located outside Estonia, a local contact person must be appointed.
Registered Office
Required
Virtual office allowed. $50-300/year
Notarization Required
Yes
Power of Attorney (Remote)
Required
Required if the founders do not have an Estonian e-Residency card to sign documents digitally.
Timeline
Standard: 3-5 business days days
Expedited: 1 day days ($100)
Required Documents
- 1Passport copy of all partners
- 2Proof of residential address
- 3Partnership Agreement
- 4Registry extract (if a partner is a foreign legal entity)Apostille needed
- 5Power of Attorney (if registering via a representative)Apostille needed
Compliance & Reporting
Annual Filings
Annual Report (Majandusaasta aruanne)
Penalty: Fines starting from €400 up to €1,200, and potential compulsory deletion from the Commercial Register.
Income and Social Tax Return (TSD)
Penalty: Late payment interest of 0.06% per day (approx. 21.9% annually).
Audit Requirement
Not Required
Mandatory if 2 of 3 are met: Revenue €5M, Assets €2.5M, Employees 60; OR 1 of 3: Revenue €15M, Assets €7.5M, Employees 180.
Accounting Standard
Estonian GAAP or IFRS
Tax Return Deadline
10th of the month following a taxable distribution (TSD form).
VAT Filing Frequency
Monthly (by the 20th of the following month)
Data Protection
Must comply with the EU General Data Protection Regulation (GDPR).
Banking & Payments
Wise
Remote-friendlyHighly popular among e-residents for its seamless online onboarding and multi-currency accounts.
Revolut Business
Remote-friendlyOffers comprehensive digital banking services, corporate cards, and multi-currency support for EU companies.
LHV Bank
A traditional Estonian bank that is very tech-friendly, but requires a demonstrable business connection to Estonia to open an account.
Wamo
Remote-friendlyA fintech alternative offering EUR/GBP IBANs and fast online onboarding tailored for e-residents.
Payment Gateways
Stripe, PayPal, Montonio, Adyen, Mollie
Currency
EUR
Multi-Currency: Supported
Account Opening
Opening a traditional bank account in Estonia as a non-resident requires proving a strong business connection to the country, such as local employees or suppliers. However, e-residents can easily open fully functional business accounts with EU/EEA fintechs like Wise or Revolut entirely online.
Practical Information
Timezone
UTC+2 to UTC+3
Business Language
Estonian (official), English (widely used)
Legal System
Civil law
Ease of Doing Business
#18
IP Protection
Estonia offers robust intellectual property protection fully aligned with EU directives. It is a member of WIPO, the European Patent Organisation (EPO), and the EU Intellectual Property Office (EUIPO).
Double Tax Treaties
62 countries
Notable treaties: United States, United Kingdom, Germany, France, Canada, Japan
Visa & Residency Options
Digital Nomad Visa
Allows remote workers to live in Estonia for up to 1 year. Requires proof of a €4,500 gross monthly income over the prior 6 months.
Startup Visa
Designed for non-EU founders of innovative, scalable tech startups. Offers up to 18 months (D-visa) or a 5-year temporary residence permit.
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Changelog
Data updates and changes on this page
Updated state fee to €20 and verified 2026 tax rates and e-Residency costs.
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