Osauhing is the Estonian private limited company, the workhorse entity for Estonian SMEs and remote founders using the e-Residency program.
An Osauhing (OU) is an Estonian private limited company regulated by the Commercial Code (Ariseadustik). Members hold shares in EUR cents, with minimum issued capital of 0.01 EUR per share since the 2023 capital reform (previously 2,500 EUR minimum, often deferred). Liability is limited to the company's assets, with directors owing duties of care and loyalty.
The Estonian e-Business Register supports fully online incorporation, often within hours, available to e-Residents and Estonian residents holding a digital ID card. Articles, share register, and management board decisions are signed digitally. The company must have a registered office in Estonia and a contact person if no management board member is an EEA resident.
An OU operates under the unique Estonian corporate tax regime: corporate income tax is paid only on distributed profits, currently at 22/78 effective rate (28 percent gross-up from 2025) on dividends, and reinvested profits are tax-free. There is no annual corporate income tax on retained earnings. VAT, Social Security, and payroll follow standard EU rules.
Annual reports are filed digitally with the e-Business Register.
You will encounter the OU constantly in the e-Residency ecosystem: digital nomads, agency owners, and remote freelancers form Estonian OU companies to invoice global clients with EU VAT compliance and minimal administration. Bootstrapped European founders often use OU as an operating company because retained earnings are not taxed.
The form is less suitable for venture-backed startups raising USD-denominated rounds, who usually move the holding to Delaware or the UK.
See what a company actually costs in year one, and how the jurisdictions compare on tax, capital and timeline.
