Many new entrepreneurs think that an accountant must be hired as soon as the company is registered. That is not true. Nowhere does the law require a company to have a hired accountant. The only requirement is that the accounting is in order.
What the law actually requires
§ 2 of the Accounting Act places an obligation to organize the accounting, not to hire anyone:
"Under this Act, all persons named in this section are required to organize accounting and financial reporting … An accounting entity is … every legal person in private or public law registered in Estonia …"
— Accounting Act § 2
Every company must therefore keep accounts. Who does it — the owner, an employee on the payroll, or a bought-in service — is for the entrepreneur to decide.
What is actually (almost) free
Two things cost less than many people fear.
Filing the annual report with the Commercial Register carries no state fee. The report can be filed through the e-Business Register free of charge. The deadline is six months from the end of the financial year:
"...to the Commercial Register within six months from the end of the financial year."
— Commercial Code § 179
For a company with no activity at all, the main cost is therefore not the accountant's fee. It is more likely the cost of a contact person and an address. Those belong to the upkeep of the company, not to the accounting.
What your bill depends on
If the company is active, the cost is mostly set by three things:
- The volume of transactions. The more invoices and entry lines, the more work.
- VAT liability. A company liable to VAT also files a monthly return with the Estonian Tax and Customs Board.
- Paying a salary. If a salary or a board member's fee is paid, monthly payroll returns follow. If you take only dividends, there is less work.
Most of this is within the entrepreneur's own control. The simpler and tidier the paperwork, the cheaper the accounting.
One warning. The cheapest solution records only what you hand over yourself. It does not tell you when something is wrong. In truth you are not only buying the entries, you are also buying a warning about mistakes.
This article was prepared with the help of artificial intelligence.