When is Estonian Company considered “dormant”?

An Estonian company is generally considered dormant when it has been legally registered but has no business activity. This is not a specific legal status in Estonia, but rather a descriptive term.

To be considered “dormant”, the company should meet the following criteria:

• No Transactions: There have been no business transactions that should be recorded in the company’s books, tax returns, or annual report during the reporting period, except for share capital payments and allocated loans.

• No Liabilities: The company has no outstanding penalties or obligations to third parties.

• No employees: No salaries, no social tax payments, and no employment contracts.

Key note:

• Being “dormant” doesn’t exempt the company from legal obligations like submitting the annual report or keeping basic records. Even if there is no activity, the management board must file the annual report with the Estonian Business Register by the deadline (generally within 6 months after the end of the financial year), marking it as “no economic activity”.

• Companies that have never commenced operations can apply for simplified deletion from the Business Register.