Why Voluntary Liquidation Is Necessary in Estonia

Many international entrepreneurs and e-resident business owners in Estonia ask the same question: why should I go through the official voluntary liquidation process instead of simply leaving my company dormant?

The truth is that properly liquidating your Estonian company is not just a legal formality — it’s essential for protecting your reputation, avoiding penalties, and ensuring a clean business exit. Here’s why:

1. Ongoing Legal and Tax Obligations

   • Every Estonian company, even without active operations, must file annual reports with the Estonian Business Register. Ignoring these duties can lead to fines, compulsory dissolution by the state, and long-term restrictions on doing business in Estonia.

2. Personal Liability Risks

   • Management board members and, in some cases, shareholders remain responsible for the company’s obligations. If taxes or debts are left unresolved, these liabilities may create legal and financial exposure, even for non-residents.

3. Avoiding Forced Liquidation

   • If authorities dissolve your company due to neglect, you lose control over the process. Compulsory liquidation is slower, more complex, and can negatively affect your standing in Estonia’s business environment.

4. Protecting Your Credibility

   • Estonia’s e-Residency program is built on trust and transparency. Leaving a company abandoned can damage your professional reputation, limit your ability to open bank accounts, or create barriers to establishing new companies in the future.

5. Achieving Finality and Peace of Mind

   • Voluntary liquidation ensures that your company is officially closed, debts are settled, and your records are in order. This gives you — and the Estonian authorities — clarity and closure.

Closing Your Estonian Company the Right Way

For e-residents living outside Estonia, voluntary liquidation provides a secure, structured, and predictable way to exit the market. Rather than leaving a dormant entity behind, which can create years of complications, liquidation ensures that your business journey ends on good terms.

At Expat Legal Estonia, we help international entrepreneurs navigate the entire voluntary liquidation process, from shareholder resolutions to deregistration. Our team ensures compliance with Estonian law, while saving you time and avoiding costly mistakes. Our liquidation service costs 325 euros (does not include the annual reports if they are missing).