Submitting your annual report in Estonia

What is an annual report?

The annual report is a financial document that gives an overview of the company’s financial position and financial performance. The size of your company and its business activities also decide the length and content of the annual report.

Who has to submit it?

Every company registered in Estonia (including companies registered by e-residents) has to submit an annual report of their business activities to the Business Register, according to the Commercial Code (see § 60). The report has to be prepared in Estonian and in the official currency (EUR). NB! Even if your company has no transactions or has been dormant, the annual report still needs to be submitted.

When is the deadline?

The deadline is within six months of the end of the financial year. Generally, the financial year is defined as a period between 01.01-31.12 of each year, which means that the deadline for submitting the annual report is June 30.

What happens when a company misses the deadline?

It might happen that a monetary fine is issued to the company without a warning if the annual report is not submitted on time or is not submitted at all. In case the annual report is not submitted within 6 months after the deadline has passed, supervision proceedings will be initiated which could end in the compulsory dissolution of the legal person.

What has to be included in the annual report for an active company?

This also depends on the company size.For larger companies, the annual report must contain the annual accounts (balance sheet, income statement, cash flow report and statement of changes in equity, plus annexes) and management report.

However, the vast majority of e-residents’ companies will most likely fall within the definition of a micro-enterprise and therefore only need to submit an abridged annual report. A micro-enterprise is a private limited company or Osaühing („OÜ“) complying with all the criteria described below:

• total assets do not exceed EUR 175,000;
• revenue does not exceed EUR 50,000;
• total liabilities do not exceed total equity; and
• one shareholder who also acts as a member of the Management Board.

For micro-enterprises, only two basic reports must be added to the annual accounts (balance sheet and income statement plus up to three annexes). Compiling a management report is not necessary.

How to use RIK (Company Registration Portal) to submit your annual report?

The e-reporting environment of the Company Registration Portal is a solution established for electronic submitting of annual reports; its use requires logging in with the ID card or mobile ID. The reporting environment allows preparing the main reports and the notes, adding notes and documents, digitally signing the annual report or printing and signing it on paper, and also allows the sworn auditor to prepare the sworn auditor’s conclusion and to certify it electronically.

You can submit your report in RIK here: https://www.rik.ee/en/company-registration-portal/annual-report

A detailed step-by-step guide how to enter the data into RIK portal –https://abiinfo.rik.ee/uploads/files/Electronic%20submission%20of%20annual%20account20150622.pdf

Who is allowed to use the RIK portal and submit the report?

Access for electronic submitting of annual reports and its notes is allowed for the following persons: Board Members, general partners, limited partners with the right of representation, subsidiary managers, liquidators and bankruptcy trustees. At the same time, a person with the right of representation may grant e.g. the accountant(s) the right to enter and submit a report. The accountant can enter the data, keep an eye on the signing of the annual report, and observe when the auditor signs the auditors’ report. After all necessary actions are completed, the accountant being granted the right to submit the annual report can submit the report to the registry. A Board Member can add the sworn auditor before preparing the report, so that the sworn auditor can observe the entry of data, or during the preparing of the report or only after all persons with the right of representation have signed the report.

How can your service provider help you with the annual report?

Most e-Residency service providers should help you with your annual report – some offer it for an extra fee. When you are a customer of Silva Hunt, submitting the annual report is already included in our service fee, so all you have to do is make sure we have all the correct information and documents to submit it.

Useful links:

https://learn.e-resident.gov.ee/hc/en-us/articles/360002569617-Accounting

https://medium.com/e-residency-blog/its-annual-report-season-4adaf49cc5e2