Key facts
| Item | Estonia | Latvia |
|---|---|---|
| Retained or reinvested profit | 0% | 0% |
| Distributed profit | 22% of the gross (≈28.2% of net) | 20% of the gross (≈25% of net) |
| Further tax at the shareholder | None | None |
| Dividend withholding for non-residents | 0% | 0% (20% to blacklisted jurisdictions) |
| Optional regime from 2026 | - | 15% CIT + 6% PIT on dividends |
What the deferral is worth
The regime is a compounding machine. A company earning €100,000 a year and reinvesting everything deploys the full €100,000 each year; a Lithuanian competitor at the standard 17% rate deploys €83,000. Over years of reinvestment the gap compounds - which is why the structure suits businesses that grow from retained earnings: product companies, asset builders, anything pre-exit. Estonia adds practical appeal: an OÜ can be formed and run entirely online through e-Residency.[3][6]
The deferral is not a rate cut. At distribution Estonia takes 22% and Latvia 20%. Against Lithuania’s 20.95% total for a small company (7% corporate + 15% dividend) the difference is small; against Lithuania’s two-year 0% start-up relief it can even be negative. The value is entirely in the timing: tax-free compounding until the year you choose to pay out.[1][4][6]
Latvia’s 2026 twist
From 2026 Latvia lets companies owned by individuals opt into an alternative: 15% corporate tax on distributable profit plus 6% personal income tax withheld on the dividend - roughly 20% combined, paid earlier but at a structure closer to a classical system. The default 0/20 regime remains.[4][5]
The catch
Everything that sneaks value out of the company is taxed like a distribution: fringe benefits, gifts, non-business costs. Directors’ fees paid by an Estonian company are taxable in Estonia regardless of where the director lives. And the big one: running an Estonian or Latvian company from another country can make it tax-resident there under place-of-effective-management rules, which deletes the whole regime. e-Residency is a login, not a tax residence.[1][2]
Συχνές ερωτήσεις
Can profit stay untaxed in an Estonian company forever?
Yes - there is no deadline and no deemed distribution for ordinary retained profit. Tax arises only when profit is distributed or leaks out as fringe benefits or non-business expenses.
Which is cheaper at distribution - Estonia or Lithuania?
For a small company, Lithuania: 7% corporate tax plus 15% dividend tax is 20.95% in total, marginally below Estonia’s 22%. Estonia wins on everything retained; Lithuania wins slightly on everything paid out.
Does e-Residency make me or my company Estonian for tax purposes?
No. It is a digital identity for signing and filing. A company managed day-to-day from another country risks being tax-resident in that country, whatever its register says.
Τα διασυνοριακά αποτελέσματα εξαρτώνται από τη φορολογική κατοικία, τους κανόνες για τις ελεγχόμενες αλλοδαπές εταιρείες και την πραγματική οικονομική υπόσταση - μια δομή στα χαρτιά δεν αρκεί. Δείτε την αποποίηση ευθύνης παρακάτω.
Πηγές
Παραπομπές με αρίθμηση που αναφέρονται σε όλο αυτό το άρθρο. Οι νόμοι συνδέονται με κωδικοποιημένα κείμενα στο επίσημο μητρώο.
- Νόμος περί φόρου εισοδήματος (Tulumaksuseadus), κωδικοποιημένο αγγλικό κείμενο
- Φορολογία μερισμάτων
- Ηλεκτρονικό εμπορικό μητρώο
- Νόμος περί φόρου εισοδήματος νομικών προσώπων (Uzņēmumu ienākuma nodokļa likums)
- Αλλαγές στη φορολογία και τα οικονομικά από το 2026
- Νόμος περί φόρου εισοδήματος νομικών προσώπων (Pelno mokesčio įstatymas), κωδικοποιημένο κείμενο