Limited Partnership (UÜ) in Estonia
UÜ · Formation from $15
Last verified: June 10, 2026
Corporate Tax
22.0%
State Tax
0.0%
Formation Cost
$15
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
- Joint ventures where one party provides capital (limited partner) and the other manages the business (general partner).
- Family businesses or investment vehicles seeking a flexible partnership structure.
- E-residents looking for a business entity with absolutely no minimum capital requirement.
- Founders who want to reinvest all profits back into the business tax-free.
Who Should Avoid This?
Scenarios where another structure may be better
- Solo founders (a UÜ requires at least two partners: one general, one limited).
- High-growth tech startups seeking venture capital (investors strongly prefer OÜ or AS structures).
- Founders unwilling to take on unlimited personal liability (the general partner has unlimited liability).
Advantages
- +No minimum share capital requirement (0 EUR).
- +0% corporate tax on retained and reinvested earnings.
- +Can be managed 100% remotely via the e-Residency program.
- +High privacy and limited liability for limited partners.
- +Excellent digital infrastructure and minimal bureaucracy.
- +Seamless access to the EU single market and SEPA banking.
Disadvantages
- -Requires at least one general partner with unlimited personal liability.
- -Mandatory local contact person and registered address if managed from abroad (recurring cost).
- -Traditional Estonian banks are difficult to access for non-residents without local ties.
- -Distributed profits are taxed at 22% (expected to rise to 24% in 2026), which can be high.
- -Not as universally recognized or trusted by venture capital investors as a private limited company (OÜ).
Formation Steps
Obtain Estonian e-Residency (takes 3-5 weeks, requires picking up the card at an embassy).
Choose a unique business name and verify its availability in the e-Business Register.
Draft the Partnership Agreement (Articles of Association) defining general and limited partners.
Secure a registered legal address and a licensed local contact person in Estonia.
Submit the registration application via the e-Business Register using the e-Residency digital ID.
Pay the state registration fee of €20 for a Limited Partnership (UÜ).
Open a business bank account with a fintech provider (e.g., Wise, Revolut) or a traditional bank.
Register for VAT 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 registration fee (UÜ) | One-time | $22 |
| e-Residency application fee | One-time | $165 |
| Registered address & contact person | Annual | $275 |
| First year total | $462 | |
| Annual ongoing | $275 | |
Real-World Examples
Typical use cases for this entity type
- A cross-border e-commerce joint venture where the investor acts as the limited partner and the operator as the general partner.
- A family-owned real estate holding company using the UÜ structure for flexible profit distribution.
- A small consulting firm established by two e-residents, leveraging the 0% tax on reinvested profits to grow their agency.
Common Mistakes
Pitfalls to avoid during setup and operations
- Assuming limited liability applies to all partners (general partners have unlimited liability).
- Forgetting to appoint a licensed local contact person when managing the UÜ from abroad.
- Misunderstanding the 0% corporate tax (it only applies to retained earnings, not distributed profits).
- Failing to register for VAT once the €40,000 annual revenue threshold is reached.
- Trying to open a traditional Estonian bank account without proving strong local business ties.
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
General Partnership (Täisühing)
- Tax
- 22.0%
- Formation
- $14
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 |
|---|---|---|---|
| 🇪🇪 Limited Partnership (UÜ)(UÜ) | 22.0% | $15 | $0 |
FAQ
What is the difference between a general partner and a limited partner in an Estonian UÜ?
A general partner has unlimited personal liability for the partnership's debts, while a limited partner's liability is restricted to the amount of their capital contribution.
Do I need to visit Estonia to set up a UÜ?
No, if all partners have an Estonian e-Residency card, the entire formation process can be completed 100% online.
What is the minimum capital required for a UÜ?
There is no statutory minimum capital requirement for an Estonian Limited Partnership (UÜ). The capital contributions are determined by the partnership agreement.
How are profits taxed in an Estonian UÜ?
Profits retained or reinvested in the business are subject to 0% corporate tax. Tax is only applied when profits are distributed to partners, currently at a rate of 22/78 of the net distribution.
Can a foreign company be a partner in an Estonian UÜ?
Yes, both natural persons and legal entities (including foreign companies) can act as general or limited partners in a UÜ.
Do I need a local director for my UÜ?
No, foreign partners can manage the UÜ remotely. However, if the management is located outside Estonia, appointing a licensed local contact person is mandatory.
How much does it cost to maintain a UÜ annually?
Annual maintenance typically includes the cost of a registered address and contact person (around €200 - €400 per year), plus accounting fees which vary based on transaction volume.
Is an audit mandatory for a UÜ?
For most small UÜs, an audit is not required. It only becomes mandatory if the partnership exceeds high statutory thresholds for revenue, assets, or employee count.
Detailed Tax Rates
Corporate Income Tax
| From | To | Rate |
|---|
Estonia levies a 0% corporate tax on retained and reinvested profits. A 22% tax (calculated as 22/78 of the net distribution) applies only when profits are distributed as dividends. Limited Partnerships (UÜ) are subject to this same corporate tax regime.
Personal Income Tax (Top rate: 22.0%)
| From | To | Rate |
|---|---|---|
| $0 | No limit | 22.0% |
Estonia applies a flat personal income tax rate of 22% on all taxable income. A basic tax-free allowance of €8,400 per year (€700 per month) applies to all residents starting in 2026.
Capital Gains Tax
22.0%
Capital gains are not taxed separately but are included in ordinary income and taxed at the flat rate of 22%. Corporate capital gains are tax-exempt until distributed.
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, with no registration threshold.
Withholding Tax
Estonia does not levy withholding tax on dividends or interest paid to non-residents (unless interest significantly exceeds market rates). Royalties are subject to a 10% withholding tax, which may be reduced or eliminated under EU directives or double tax treaties.
Payroll & Social Security
Employers pay a 33% social tax and a 0.8% unemployment insurance premium on gross salaries. Employees contribute 1.6% for unemployment insurance and 2% (or optionally 4% or 6%) for the funded pension.
Other Taxes
Fringe Benefits Tax
Fringe benefits provided to employees are subject to both income tax (22/78) and social tax (33%) calculated on the grossed-up value.
Land Tax
An annual land tax is levied on the assessed value of land at rates ranging from 0.1% to 2.5%, depending on the municipality.
Incentives & Support
0% Corporate Tax on Retained Earnings
Estonia levies no corporate income tax on reinvested or retained profits.
Tax is deferred until profits are distributed (taxed at 22/78).
Eligibility: Available to all Estonian resident companies, including UÜs.
e-Residency Program
A government-issued digital identity that allows foreign entrepreneurs to manage an Estonian company fully online.
Enables remote company formation, digital document signing, and online banking.
Eligibility: Available to non-residents who pass a background check.
Formation Requirements
Minimum Capital
No requirement
There is no minimum share capital requirement for a Limited Partnership (UÜ) in Estonia. The partners' contributions are determined by the partnership agreement.
Local Director
Not Required
Foreign partners can manage the UÜ remotely. However, if the management is located outside Estonia, appointing a local contact person is mandatory.
Registered Office
Required
Virtual office allowed. €50 - €300 per year
Notarization Required
No
Power of Attorney (Remote)
Required
Not required if all partners use Estonian e-Residency digital signatures. Required and must be apostilled if registering through a proxy.
Timeline
Standard: 3-5 business days days
Expedited: 1 business day (with e-Residency) days ($25)
Required Documents
- 1Partnership Agreement (Articles of Association)
- 2Passport copies of all partners
- 3Proof of registered address and contact person consent
- 4e-Residency card (if registering online)
- 5Power of Attorney (if registering via a legal representative)Apostille needed
Compliance & Reporting
Annual Filings
Annual Report (Majandusaasta aruanne)
Penalty: Fines and potential deletion from the Commercial Register.
Income and Social Tax Return (TSD)
Penalty: Late payment interest of 0.06% per day on tax arrears.
Audit Requirement
Not Required
Audit is 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 (2026 thresholds).
Accounting Standard
Estonian GAAP or IFRS
Tax Return Deadline
Corporate tax is deferred until profit distribution. TSD declarations are due by the 10th of the following month when distributions or taxable expenses occur.
VAT Filing Frequency
Monthly (by the 20th of the following month)
Data Protection
Subject to the EU General Data Protection Regulation (GDPR). Companies must ensure lawful processing of personal data.
Banking & Payments
Wise
Remote-friendlyHighly popular among e-Residents. Offers multi-currency accounts and seamless integration with Estonian accounting software.
Revolut Business
Remote-friendlyExcellent for multi-currency transactions and corporate cards. Fully supports Estonian entities.
LHV
Estonia's largest domestic bank. Requires a strong connection to Estonia (e.g., local office, employees) and a physical visit to open an account.
Payoneer
Remote-friendlyGood alternative for e-commerce and freelance businesses needing US and EU receiving accounts.
Payment Gateways
Stripe, PayPal, Montonio, Maksekeskus, Paddle, 2Checkout
Currency
EUR
Multi-Currency: Supported
Account Opening
Opening a traditional bank account (e.g., LHV, Swedbank) is difficult for non-residents and usually requires a physical visit and proof of local business ties. However, e-Residents can easily open business accounts entirely online with fintechs like Wise, Revolut Business, or Payoneer.
Practical Information
Timezone
UTC+2 (EET) / UTC+3 (EEST)
Business Language
Estonian (official), English (widely used in business)
Legal System
Civil law
Ease of Doing Business
#18
IP Protection
Strong IP protection. Estonia is a member of the EU, WIPO, and the European Patent Organisation. Trademarks can be registered locally or via the EUIPO for EU-wide protection.
Double Tax Treaties
66 countries
Notable treaties: United States, United Kingdom, Germany, France, Turkey, Canada
Visa & Residency Options
Startup Visa
Allows non-EU founders to relocate to Estonia to build a scalable tech startup. Requires approval from the Startup Committee.
Digital Nomad Visa
Allows remote workers and freelancers to live in Estonia for up to a year while working for a foreign employer or their own company. Requires a minimum monthly income of €4,500.
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Changelog
Data updates and changes on this page
Verified 2026 state fees (€20 for UÜ) and updated corporate tax notes regarding the planned increase to 24%.
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