Estonia has remained one of the most popular jurisdictions for international business for many years. Transparent corporate legislation, advanced digital infrastructure, and the ability to administer companies remotely make it attractive both to startups and to entrepreneurs operating in international markets.

At the same time, many foreign entrepreneurs mistakenly believe that they must first obtain e-Residency in order to establish a company in Estonia. In fact, this is only one of the available mechanisms for registering a business.

In practice, Estonian law allows a company to be incorporated either through e-Residency or through an authorised representative acting under a notarised power of attorney. Each option has its own features, advantages, and limitations.

In this article, we will examine how these mechanisms differ and which option may be more appropriate depending on your business goals.

Is e-Residency Mandatory for Opening a Company in Estonia?

No. Obtaining e-Residency is not a mandatory condition for establishing an Estonian company. Although the e-Residency programme is often associated specifically with business formation, it is only a digital identification tool that simplifies interaction with Estonia’s electronic services.

In practice, an entrepreneur can choose one of two main approaches:

• first obtain e-Residency and independently carry out most corporate actions electronically;
• register the company through a representative under a power of attorney without obtaining e-Residency in advance.

The choice between these options depends less on the complexity of the procedure than on the future business management model.

Company Registration Through e-Residency

The e-Residency programme gives foreigners access to Estonia’s digital infrastructure and allows them to use a qualified electronic signature when working with government and corporate services.

After receiving an e-Residency card, an entrepreneur can participate in the company registration process, sign documents, and perform a range of administrative actions remotely.

This is why the mechanism is popular among owners of IT companies, SaaS projects, consulting businesses, and other entrepreneurs whose activities do not require a permanent physical presence in a particular country.

Advantages of e-Residency

The main advantage of e-Residency is the ability to manage the company independently and remotely.

After receiving the digital ID card, the owner or a management board member can use an electronic signature to interact with public registers, sign corporate documents, and complete many administrative procedures online.

In addition, e-Residency can significantly reduce the number of documents that require notarisation or physical delivery between countries.

For entrepreneurs planning to use an Estonian company on a long-term basis, this often becomes an important advantage.

Disadvantages of e-Residency

Obtaining e-Residency requires additional time and a separate application procedure.

The applicant must submit an application, pass the required checks, and collect the e-Residency kit in person at one of the official pickup locations.

In addition, the decision to grant e-Residency is made by Estonian public authorities, so submitting an application does not guarantee a positive outcome.

For entrepreneurs who want to start the company formation process as quickly as possible, the need to obtain e-Residency in advance may extend the project timeline.

Company Registration Through a Representative Under a Power of Attorney

An alternative option is to establish the company through an authorised representative acting under a notarised power of attorney.

In this case, the founder authorises a lawyer or another person to carry out the necessary company registration actions on their behalf.

This mechanism is used quite often, especially when a business owner does not want to wait for e-Residency or is unsure whether they will actively use Estonia’s digital infrastructure in the future.

Advantages of Registration Through a Power of Attorney

The main advantage of this approach is the ability to start the company formation process without obtaining e-Residency first.

The founder does not need to go through a separate procedure for obtaining a digital ID card, which in some cases allows the project to move forward faster.

This option can also be convenient for investors or business owners who do not plan to handle the company’s day-to-day administration themselves.

In addition, registration through a representative is often used in more complex corporate structures where several participants or legal entities are involved in the process.

Disadvantages of Registration Through a Power of Attorney

The main disadvantage is that, at the company formation stage, the owner is to some extent dependent on the representative and on the proper preparation of documents.

In addition, the absence of e-Residency means that some corporate procedures in the future may require additional document formalities or the involvement of a representative.

This is why this option is not always optimal for entrepreneurs who plan to actively manage the business themselves.

Can Both Methods Be Combined?

Yes, and this approach is quite often used in practice.

Registering a company through a representative and obtaining e-Residency are not mutually exclusive mechanisms. On the contrary, they can complement each other effectively.

For example, an entrepreneur may first register the company through a representative under a power of attorney and then obtain e-Residency for subsequent remote management of the business.

This approach combines the speed of company formation with the advantages of digital administration in the future.

This is why e-Residency should not be viewed solely as a company formation tool. In many cases, its main value lies precisely in managing an already existing business afterwards.

Which Option Should an Entrepreneur Choose?

There is no universal answer to this question.

If an entrepreneur plans to manage the company independently, use an electronic signature regularly, and actively interact with Estonia’s digital services, obtaining e-Residency is usually a justified choice.

If the priority is a quick business launch or the owner does not plan to be directly involved in the company’s day-to-day administration, using a notarised power of attorney and engaging a representative may be more practical.

When choosing a mechanism, it is important to consider not only the technical registration procedure but also subsequent tax, corporate, and compliance matters.

In practice, the greatest risks for an international business owner arise not at the company registration stage but during its subsequent operation. That is why, before forming a company, it is advisable to assess the future business structure, taxation rules, accounting requirements, and the possible implications of controlled foreign company (CFC) rules.

Conclusions

A company in Estonia can be opened either through e-Residency or through a representative acting under a notarised power of attorney. Both mechanisms are legal and widely used by international entrepreneurs.

The choice between them depends on business goals, the project timeline, the future company management model, and readiness to use Estonia’s digital infrastructure. Therefore, before starting the procedure, it is advisable to assess not only the company registration process but also the long-term legal and tax implications of the chosen structure.