Share capital decrease/reduction in Estonia

Since the beginning of 2023, amendments in law allow a company to have a minimum share capital of 1 eurocent. Since the minimum share capital of an Estonian company was previously 2500 euros it raises a question if those companies could lower the share capital as well? The answer is yes.

This option could also be handy when the company has increased the share capital to 10 000 euros to take advantage of simplified share sale option. Later perhaps such a high capital is not needed and it can be reduced.

It is a process that requires some time and correct shareholder decisions.

Firstly, a shareholder decision to lower the share capital (and also amend the articles) has to be taken - 2/3 of the votes are needed. In the decision the reason for reduction of share capital has to be stated (i.e the company does not need such a high share capital due to the field of activity).

After the decision to reduce share capital, it has to be published in the Official Gazette (Ametlikud Teadaanded), also known creditors have to informed directly.

The reduction can be registered in the Business Registry min. 3 months after the publishing in the Official Gazette. Also the payment to the shareholder can be made after that.

We are happy to help with all the necessary steps from start to finish so feel free to contact us info@expatlegalestonia.com