[taxguy]

Corporate taxation is generally based on where the management and control of the business is, not where it is incorporated, although the incorporation jurisdiction is considered. If you had incorporated the Estonian company by yourself without a partner and had been running it from Canada, the Estonian company will be considered a Canadian company for tax purposes and required for file a T2 corporate income tax return.

If you are still a Canadian resident, do remember to file T1134. If you own 50/50 in the business, you can perhaps argue that this is a foreign affiliate only, and not a controlled foreign affiliate.