What "OÜ" Means

If you have done business with an Estonian company, or looked into setting one up yourself, you have seen the letters “OÜ” at the end of a company name – as in “Acme OÜ”. Here is what they mean, and where the OÜ fits among Estonia’s other legal forms.

OÜ = osaühing = private limited company

OÜ is short for osaühing, which translates as “private limited company”. It is Estonia’s equivalent of a UK Ltd, a German GmbH or a US LLC, and by far the most common legal form for a business in Estonia. The abbreviation comes after the company’s name, not before it – so “Acme OÜ”, not “OÜ Acme”.

An OÜ is a separate legal entity, owned by one or more shareholders and run day to day by a management board. It is the form most foreign owners and e-residents choose when they set up in Estonia, and the one this site is written for.

The other Estonian legal forms you will see

Estonia has a small, fixed set of legal forms, and you will meet the abbreviations often enough that it is worth knowing what each one is:

• FIE – füüsilisest isikust ettevõtja, a sole proprietor. A private individual who runs a business under their own name, without setting up a separate company. Simpler to start than an OÜ, but the owner is personally liable for the business’s obligations.
• MTÜ – mittetulundusühing, a non-profit. Used by clubs, charities and other organizations whose purpose is not to distribute profit to their members.
• AS – aktsiaselts, a public limited company. Used by larger companies, particularly those that expect to have many shareholders or to list their shares.

For most foreign-owned businesses and e-residents, the practical choice is between an OÜ and operating as an FIE. That comes down to liability, whether you plan to have co-owners or employees, and how you want your profit taxed.

What an OÜ has to do, accounting-wise

Every OÜ is an accounting entity from day one, whether or not it has started trading. Two obligations apply to essentially every OÜ:

• An annual report, filed with the Estonian Business Register within six months of the end of the financial year – by 30 June for a financial year that matches the calendar year. This applies even to a dormant company with no activity during the year.
• Monthly tax returns, but only once they are triggered. A monthly VAT return (KMD) is required once the company is registered for VAT. A monthly payroll tax return (TSD) is required once the company pays salaries or other taxable payments, such as fringe benefits or dividends. A company with no VAT registration, no employees and no other taxable payments in a given month files neither return for that month.

That is the baseline. Beyond it, what your OÜ actually needs from an accountant depends on your turnover, whether you have staff, and whether you are VAT-registered – all things we go through with clients when they are setting up.

If you are setting up, or already running, an Estonian OÜ

If you are an e-resident or a foreign owner working out what your new OÜ needs – or you already have one and want it handled properly, in English – see our accounting for e-residents and foreign owners or startup accounting services.