Estonia charges nothing until you distribute. The UK charges on every pound of profit either way. Everything else, cost, banking, VAT, treaties, is a tiebreaker. Move the slider.
The osaühing is Estonia's private limited company and the vehicle behind the overwhelming majority of Estonian businesses. e-Residency, launched in 2014, gives non-residents a government digital identity to sign, file and manage entirely online: more than 110,000 cards issued across 170-plus countries, and over 30,000 companies formed through the programme.
The card is the bottleneck: four to eight weeks, collected in person at an embassy or pickup point. With it in hand, incorporation through the e-Business Register takes about twenty minutes. You need a contact person resident in Estonia, typically €200 to 400 a year through a provider, and a registered address usually bundled with it.
The defining feature is deferral. Corporate tax is 0% on retained and reinvested profit, and 22% falls due only on distribution: including deemed distributions such as fringe benefits and non-business expenses. A 14% reduced rate applies to regularly distributed dividends from the third year. There is no further withholding on outbound dividends from already-taxed profit.
The UK private limited company is the most accessible corporate vehicle in any developed economy: £100 online at Companies House, live within 24 hours, no notary, no minimum capital, no local director. More than 500,000 are formed each year.
Formation was £12 until 1 May 2024, when Companies House quadrupled it to £50, then doubled it again to £100 on 1 February 2026: a change most comparisons have not caught up with. The confirmation statement also rose to £34. Budget £200 to 800 a year all in for a lightly trading company, or more with an accountant.
Tax is charged on all profit regardless of distribution: 19% below £50,000, 25% above £250,000, with marginal relief between. Dividends to UK-resident individuals attract 8.75% to 39.35% personal tax above a £500 allowance; dividends to non-residents generally face no UK withholding. Post-Brexit, selling digital services into the EU means the non-Union OSS rather than the domestic scheme.
If profit sits in the company for years, Estonia. If you pay yourself every month, the UK.
For a bootstrapped team building a product where earnings compound inside the business before any dividend, 0% on retained profit is the single largest advantage available in European corporate structuring, and the €600 to 1,500 of annual Estonian accounting is recovered at modest profit levels.
If you distribute regularly, Estonia's 22% lands close to the UK's 19 to 25% while costing more to run and taking six weeks longer to start. At that point the £100 formation, same-week banking and 130-treaty network settle it.
The figures above are a planning instrument, not a quote. Four things move them materially.
Most founders overestimate how long they can leave profit in the company. Model two years of real drawings before committing to the deferred-tax case.
