There is no direct need for an Estonian company to have a local director. However, in some cases, it might be useful to have a proper local presence—someone who knows how things work in Estonia — to assist you.

In Estonia, almost everything is done digitally (with a digital signature), and local knowledge of this might be helpful.

Hiring a local director even for a part-time job might give you a stronger “local presence” effect.

In simple terms, local substance means having real, meaningful business activities and infrastructure within Estonia, rather than just a company on paper. Key indicators of substance include:

• A physical workspace (office or coworking space),

• Landline phone number

• Hiring local employees or appointing a local director.

Hiring a local employee or director also involves paying a salary or board member remuneration, which is at least partly public information. Everybody can see that the company is paying salaries and taxes. The most important thing is not to pay a high salary or a lot of taxes. Even a relatively reasonable wage and tax payments will significantly change the company’s web image..

Often, the need for local presence and assistance is not high, which means you can hire a part-time director or employee at a reasonable monthly cost.

As a rule, terminating the management agreement with the local board member can be done immediately upon the shareholders' decision.

Read also about local presence and using a nominee director in Estonia.