Many business owners think that if a company does nothing, then nothing needs to be done with the company. Estonian law, however, has no such thing as a "dormant" company. A company with no activity is simply a company that still has all of its obligations.
The report must be filed even with no activity
The annual report must be filed with the Commercial Register every year — even if the company had no activity at all for the whole year. You have six months after the end of the financial year. If the financial year is the calendar year, the deadline is 30 June.
A zero report (all figures at zero) is allowed and is easy to file in the e-Business Register portal. But it does have to be filed.
What happens if the report is not filed
If the report does not arrive on time, it does not go unnoticed — and the consequences are two separate things.
First, the fine. The registrar may impose a fine without a prior warning and may do so again and again, until the report is filed.
Second, deletion. For that, the registrar first gives a new deadline together with a warning. If the report still does not arrive, the company is deleted from the register. Commercial Register Act § 61 subsection 2:
A legal person may be deleted from the register if the legal person has not filed the annual report within the term set by the registrar and at least three months have passed from the filing deadline provided by law.
The road to deletion is shorter than many people think.
For a foreign owner: a contact person is an obligation
If the company address is in a foreign country, the company must have an Estonian contact person. Only the following may act as one: a notary, an attorney, the operator of a law office, a sworn auditor, an audit firm or the tax representative of a non-resident. This is an obligation, not an extra service. If the contact person disappears, the company may be deleted from the register for that reason as well.
Where the real cost hides
The company goes quiet. The invoices from the contact person and the letters from the register arrive in a mailbox that nobody reads — and they are in Estonian on top of that. The deadline passes unnoticed. The fine and the deletion come exactly when the owner suddenly needs the company again. The expensive part is not the couple of hundred euros a year — it is the forgetting.
Two reminders a year keep things in order
- In spring: file the report (a zero report too).
- Once a year: pay for the contact person and the address, and check that the register holds an email address that you actually read.
That is all.
Keep it or close it
Keep the company alive only if it protects something real: a bank relationship, a VAT number, licenses, contracts or a name. By the way, the Estonian Tax and Customs Board may also remove an inactive VAT payer from the register on its own. If there are no plans and there is nothing to protect, closing it down is the cheaper choice.
This article was prepared with the help of artificial intelligence.