Estonia or Cyprus: where should you start a business?
Cyprus ranks higher in the index, 11 against 13. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Retained profits are not taxed. Distributed profits bear 22%, calculated as 22/78 of the net amount, and VAT is charged at 24%.
Corporate income tax rose from 12.5% to 15% on 1 January 2026. VAT is 19%, and deemed dividend distribution no longer applies to profits after 2025.
Set-up
The state fee is €265, although a 2022 notice gives €200. Share capital starts at €0.01 per shareholder, and review usually takes a day.
Online registration costs €165 and name approval €10, with a lawyer signing the application. The annual return costs €20, and no minimum capital applies.
On the ground
Board members need not be resident but must be able to sign the application digitally. A company with a registered address abroad must name a contact person.
A company needs a registered office in Cyprus, which cannot be a mailbox, at least one director and a company secretary.
Ownership
Beneficial owner data can be viewed by anyone on the e-Business Register portal. A restriction planned for 10 July 2026 was postponed.
Public access to the beneficial ownership register was suspended on 28 November 2022. Companies must confirm their beneficial owners each year.
Residence
A shareholder investing at least €65,000 in the company's Estonian activities qualifies for a business permit. e-Residency gives no right to live there.
A foreign-owned company whose beneficial owner invests €200,000 can register with the Business Facilitation Unit, giving its staff access to permits.
Living and working
Currency
Euro.
Euro.
Time zone
UTC+2, and UTC+3 in summer.
UTC+2, or UTC+3 in summer.
Personal tax
Income tax is a flat 22% in 2026, and gains on property transfers are taxed as income, with no separate capital gains tax.
Top rate 35% on income of €72,001 and above from 2026. A 20% capital gains tax applies only to Cyprus property; no inheritance tax.
Language
Documents submitted to a court must be in Estonian or translated into Estonian.
Greek and Turkish are the official languages and are used in the courts. Most people speak another language, usually English.
Flights
Larnaka and Pafos airports served 165 destinations in 42 countries in August 2026; Larnaka handled 9.91 million passengers in 2025.
Estonia vs Cyprus: common questions
Estonia: Retained profits are not taxed. Distributed profits bear 22%, calculated as 22/78 of the net amount, and VAT is charged at 24%. Cyprus: Corporate income tax rose from 12.5% to 15% on 1 January 2026. VAT is 19%, and deemed dividend distribution no longer applies to profits after 2025.
Estonia: The state fee is €265, although a 2022 notice gives €200. Share capital starts at €0.01 per shareholder, and review usually takes a day. Cyprus: Online registration costs €165 and name approval €10, with a lawyer signing the application. The annual return costs €20, and no minimum capital applies.
Estonia: Board members need not be resident but must be able to sign the application digitally. A company with a registered address abroad must name a contact person. Cyprus: A company needs a registered office in Cyprus, which cannot be a mailbox, at least one director and a company secretary.
Estonia: Beneficial owner data can be viewed by anyone on the e-Business Register portal. A restriction planned for 10 July 2026 was postponed. Cyprus: Public access to the beneficial ownership register was suspended on 28 November 2022. Companies must confirm their beneficial owners each year.
Estonia: A shareholder investing at least €65,000 in the company's Estonian activities qualifies for a business permit. e-Residency gives no right to live there. Cyprus: A foreign-owned company whose beneficial owner invests €200,000 can register with the Business Facilitation Unit, giving its staff access to permits.
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