Open a company in Estonia and become an e-resident in 30 days
Authored by Andrea Villegas
Estonia’s e-residency is one of the most popular company registration options for digital nomads, remote workers, and location-free entrepreneurs because it allows you to manage your business 100% remotely with technology and it also has corporate tax benefits.
Tonis, an expert from Estonia for e-residency, and Danish, visadb’s CEO, discussed all the basic information, requirements and process about e-residency in the session “How to open a company in Estonia and become an e-resident in 30 days”.
Why is Estonia and e-residency a great option for digital nomads and remote workers?
Estonia has a well-developed digital environment where you have different services in the cloud on the internet and one of those services is a business registry. In 2014, the government developed the idea of giving foreigners access to this digital environment because they can just register their business, do their remote work, and have clients in the EU or in other countries around the world.
If you pay out dividends, you pay a corporate tax in Estonia and that is the income of Estonia in that sense.
What is Estonian e-residency?
E-residency is a digital identity which adds you into the Estonian environment, so you have your name and a digital code assigned to access Estonian digital services. The utility of the identity card that you receive is to actually register the business, so you are not getting a permanent residence or any grant to actually stay in Estonia nor a visa.
Getting the ID card is the hardest part because you have to physically go and pick it up from the pickup location i.e. an embassy, because they need to take your biometrics, fingerprint, and signature. The e-residency ID card essentially gives a guarantee that this business has been established by a foreigner in Estonia, and it is valid and trustworthy.
What is the eligibility to apply for Estonian e-residency?
You must have a valid passport. Just a few countries like Russia and Belarus are currently restricted, but you are free to apply for the e-residency card from most countries.
You also need to go to the government website and fill out a form, and then go to a pickup location.
How long does it take to open a company in Estonia as an e-resident?
It takes a maximum of 24 hours, so once you have been through the process of getting the ID card, you have access to Estonia’s systems.
Do I have to renew Estonia’s e-residency?
Your e-residency ID card is valid for five years.
How does banking work in Estonia for e-residents?
The company is free to choose whatever banking solution they require. If you apply for a traditional bank account where you have leases, you also have the availability for a loan. Note that if the bank has a physical verification step, you will need to travel to Estonia.
If you are a freelancer, it is better to get an online fintech solution like Wise because the fees are lower and they have several currencies available.
What are the tax benefits for e-residents?
Estonia has a law where you pay corporate tax or dividend tax only when you take out the profit of your bank account. Whatever profit your business is making, you can deduct the expenses, and if you keep it in the company's bank account, you can accumulate the profit for years or reinvest. The corporate tax rate in Estonia is 20%
You can receive a salary from your Estonian company, and you pay your personal income taxes wherever your tax residency is registered.
Basically, there are two types of taxes:
- A business tax which is zero if you are an e-residency company, and you do not take out the profit.
- You have a personal income tax which you do not have to pay in Estonia, but in your tax residency country.
Is it more expensive to register a company in Estonia if I am not an e-resident?
It is a bit more complex and expensive (300 EUR more), but it can be done. It is also easier to manage your business remotely if you are an e-resident with a valid ID.
Can an Estonian company invest in property in other places?
Yes, it can because Estonia is part of the EU and OECD, so you can get the documentation and have compliance in the process for investing.
How can a verified Estonian expert help me get e-residency or maintain my company?
A verified Estonian expert can assist you in the following:
- Company formation
- Providing a local address
- Accounting and legal services
Start a business in Estonia online and remotely
Subscription based packages for company managements (€/month)$ 56 - $ 169
Company formation (one time setup)$ 330 - $ 852
Legal consultation for Estonian companies
Legal consultation (€/h)$ 114 - $ 114
Start an Amazon Business in Europe (e-commerce)
Start a Busines for Amazon UK and/or Germany – Starting package$ 1807 - $ 1807
If you are looking to become an e-resident but still have doubts, do not hesitate to reach out to our verified experts to ask any questions. You can also watch the complete session below.
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