Skip to content

📘 Estonian OÜ Accounting Guide (via Enty)

This guide documents how we (founders/co-owners) handle accounting, taxes, and financial operations in our Estonian OÜ using Enty as the accounting provider. It includes best practices for payments, dividends, salaries, investments, VAT, and expenses. We plan to keep the company VAT-registered by default so we can reclaim VAT on expenses and issue VAT invoices when required.

🧾 Receiving Money from Clients

  • Clients can pay into our LHV or Wise business account (in EUR or other currencies).
  • Enty connects to bank feeds or accepts manual CSV uploads to track incoming payments.
  • Incoming funds remain company money until withdrawn as salary/dividends.

💼 Paying Ourselves

✅ Two ways to pay ourselves:

Type Taxed? Notes
Salary Yes (~40-45%) Declared monthly via TSD, affects pension/TRP. Aim for at least Estonian minimum gross salary (€820 in 2024) when running payroll so social tax obligations are met.
Dividends Yes (20%) Paid from profit (after annual report). More flexible

Important: You must declare salary or dividends before transferring company money to your personal account. Otherwise, it's considered a fringe benefit and taxed heavily.

📥 How to Declare Dividends

  1. Log in to Enty dashboard -> "Distribute Dividends"
  2. Enter amount and confirm available retained earnings
  3. Enty handles:
  4. Dividend documentation
  5. 20% tax calculation

  6. Report to Estonian Tax Office (EMTA)

  7. Transfer declared amount to your personal account

✅ Dividends are distributed strictly by share percentage. For 50/50 companies, it's 50/50 split.

✈️ Business Travel & Expenses

✅ Two payment methods:

Method Recommended? Handling
Company card (Wise, LHV) ✅ Yes Enty auto-detects and categorizes, you confirm it as business expense
Personal card ✅ OK Upload invoice + receipt -> Enty -> reimburse yourself from company

Examples of deductible expenses:

  • Plane/train tickets
  • Hotel/accommodation
  • Taxi/public transport
  • Coworking, conference tickets
  • Office groceries (coffee, fruit, etc.)

✅ Always keep and upload invoices with company name.

📈 Company Investments (e.g. Lightyear, IBKR)

We can invest retained company profits tax-free:

  • Allowed investment types:
  • Stocks/ETFs via Lightyear Business, IBKR Corporate, or LHV Broker

  • Real estate (rentals)

  • Must be done from company -> company accounts (not personal!)

✅ Process:

  1. Open a Lightyear Business or IBKR Corporate account for the OÜ
  2. Transfer from LHV to the investment account
  3. Add clear transfer note (e.g. "OÜ investment account")
  4. Enty will detect -> categorize as financial investment
  5. Profits grow tax-free until you take them out as dividends

❌ Never invest company money into personal accounts. Enty will flag this as fringe benefit -> taxed ~64%.

💰 VAT (Value-Added Tax)

🔍 Do we need to register for VAT?

  • Not mandatory until your turnover exceeds €40,000/year
  • But early VAT registration is possible and sometimes recommended for:
  • Building credibility with EU clients
  • Reclaiming VAT on eligible business expenses
  • Working with VAT-registered B2B partners

✅ What happens if we register:

  • Enty can handle the VAT registration process with EMTA
  • They will file monthly or quarterly VAT returns for us
  • You must save invoices for all purchases and sales
  • Cross-border EU B2B services are usually reverse-charged (0% VAT declared, but reported)

We don’t need to register immediately, but if we start seeing client interest or regular expenses with VAT, it’s worth doing.

🧾 Reporting & Tax Submissions

Enty handles all necessary filings:

Report Frequency Who submits
TSD (salary/payroll) Monthly Enty
KMD (VAT report) Monthly/Quarterly Enty
Annual Report Yearly Enty
Dividend declaration As needed Enty

We just need to:

  • Upload invoices/receipts when relevant
  • Confirm categorizations for expenses
  • Inform Enty before paying dividends/salary

🧑‍🤝‍🧑 Shareholder & Board Member Structure

  • Our company can be 50/50 owned.
  • Shareholders receive dividends according to their %.
  • Both co-owners should be board members (juhatus) for equal authority.
  • Adding shareholders/board members can be done via:
  • Business Register directly
  • Or through Enty (recommended — they'll prepare the documents)

✅ Best Practices Summary

  • Never transfer money to personal accounts without declaring it as salary or dividends
  • Always use company accounts for business expenses or reimburse via invoices
  • Declare dividends only via Enty
  • Use investment accounts registered to the OÜ, not personal
  • Let Enty handle all reports, tax submissions, and salary/dividend documents
  • Keep VAT registration active so we can reclaim VAT and issue compliant invoices

This guide can be extended as we onboard the second shareholder and begin operations.