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Estonia's E-Residency Program Is Growing Faster Than Predicted
- hellofunk 11y agoThe article doesn't really explain what the e-residency service actually provides, but links to another article with more useful details: http://motherboard.vice.com/read/lets-all-become-e-residents-of-estonia http://motherboard.vice.com/read/lets-all-become-e-residents...
- zdkl 11y ago"one of her colleagues signed his job contract on his mobile phone while out fishing on the sea." so in addition to leading the way in digital citizenship, they also have impressive data coverage? Count me in! Joke aside, I'm very interested in seeing how bigger countries will implement something similar
- hellofunk 11y agoThis kind of stuff only happens in very small nations in my experience. They often have very little to lose, and the barrier to make major changes is small. This has been true in many of the smaller nations I've lived in, but I can't see the United States and other larger nations ever being efficient with the transition to this.
- potrebitel22 11y agoThe problem is that in order to operate as a startup, as the whole point of the e-residency is, it's not that easy. Getting a bank account as of end of September is quite hard, border line of impossible. Without a bank account, no startup can be setup properly. Other than that - very good idea and probably the execution will be even better in the near future.
- deleted 11y ago[deleted]
- jkaljundi 11y agoRight now yes, to open a bank account in Estonia you need to visit a local bank physically (although then it is very easy). Part of the money laundering regulations common in Estonia. Luckily this law will change in spring.
- 3pt14159 11y agoWhy is this considered hard? A date flexible return flight from Toronto is $935 ($725 USD). Compared to what a developer can make in really any Western country, I don't really see what the issue is.
- icebraining 11y agoCompared to what a developer can make in really any Western country. In my Western European country, we make less than $20k/y on average, so that is kind of high (~ 2 months' rent) for developers on the lower end of the scale. I'm not arguing against you, just pointing out that salaries for devs are very variable even in the Western countries.
- MortenK 11y agoWhat country are you in?
- icebraining 11y agoPortugal.
- moonchrome 11y ago>In my Western European country He quoted you a price from Toronto. You can probably find Ryan air for under 200€ roundtrip - bigger problem will be that you'll probably spend 2 days on it. Also 20k $/year as a developer ?! You earn more in Eastern Europe unless you're a PHP "developer" or something like that.
- suneilp 11y agoCan anyone provide any insight on why E-Residency would be good for businesses? How about startups in particular?
- siscia 11y agoIf you are e-citizen in estonia you can easily open a company there. Taxation in estonia is pretty nice since basically the only tax you pay is when you pull money out of the company, not when you sell something, as long as the money are inside the company you don't own anything. (Of course is a little bit more complex that this, but here is the idea, you need to pay tax if you have employee for example)
- icebraining 11y agoWell, you also pay VAT when you sell something. You just don't pay corporate taxes.
- eCa 11y agoYes, but VAT is not part of your revenue.
- kintamanimatt 11y agoIIRC you pay corporate taxes when the profits are distributed, but aren't taxed so long as you keep them in the business.
- reinhardt 11y agoAlso how about sole proprietors contractors/consultants based in another EU country?
- edko 11y agoIf you do not reside in Estonia then, when you extract money, you get to keep 80%, minus the dividend tax of your country of residence. Despite there being double-taxation treaties with several countries, Estonia taxes the company paying dividends, and not the individual receiving them, so you may not be in a double-taxation situation. But I am not a lawyer or an accountant; it is better to consult with one.
- diminish 11y ago"Than Predicted" and "Than Thought" allows journalists to make true blog titles and for the audience it works better than expected.
- siscia 11y agoThe exiting news is that estonia is working let people open a bank account remotely, it should be live in Autumn 2016 [1], which is an year from now, but it will really bring a lot of changes... [1]: http://us9.campaign-archive1.com/?u=d439c8680308c578a74dbd368&id=3083b438f4&e=c1735a3344 http://us9.campaign-archive1.com/?u=d439c8680308c578a74dbd36...
- esseti 11y agoHas anyone applied to this? How much is the cost of being an Estonian e-citizen? When i was there i understood there was some cost, roughly < 100 euros. Is every step of the procedure online? or some paperwork has to be done in Estonia (this is was my understanding of last time)
- delibaltas 11y agoI applied to this and I am receiving my card from their consulate in Athens, tomorrow. I spent 50 euros for the application.
- esseti 11y agothanks, so you don't have to go there, just to pay 50 euros.
- kintamanimatt 11y agoI applied to this. It was a form online, and I paid €50.99 at the time. (€50 for the application fee and a €0.99 charge to cover the cost of paying with a Visa or MasterCard.) It took about twice as long as they promised with my application (although this was just after they'd started online applications), but with a little nudging by email, the package (card, reader, PIN numbers, etc) arrived at the Estonian embassy in London. A signature and some fingerprints, and they handed over the package. I feel they could have been a little more transparent and clear about what stage my application was at, but overall it was fairly easy. You don't actually have to go to Estonia to collect the card or do any of the processing in person there anymore. It can be done all online and everything delivered and finalized at your local Estonian embassy or consulate. When the program first started, to apply you had to make a physical appearance in Estonia. You still do to open up a bank account -- for now. The software does work on Ubuntu. There's poor or no support for other distros IIRC. I've yet to incorporate or actually use it for any practical purpose, but I expect to in the coming month or so. Estonia is doing some really cool things and it seems to be a decent jurisdiction to run a location-independent business from. I've still got a lot of experience to gain though.
- awch 11y ago
- fit2rule 11y agoSet up my startup in Estonia, or Singapore .. anyone with experience either way got hints/tips/advice?
- tim333 11y agoDepends a bit where you live, plan to live and where you pay tax.
- yummyfajitas 11y agoIt's worth noting that you can get similar benefits from Singapore. Singapore doesn't have a cute "E-residency" program, but a foreigner can just pay a local agent and have a corporation opened. Corporate taxes are a clean 17% (lower for small businesses and startups), no dividend taxes, etc. http://www.guidemesingapore.com/incorporation/company/singapore-company-registration-guide http://www.guidemesingapore.com/incorporation/company/singap... http://www.guidemesingapore.com/taxation/corporate-tax/singapore-corporate-tax-guide http://www.guidemesingapore.com/taxation/corporate-tax/singa... You also get a fairly stable and well established set of corporate law, which unfortunately Estonia doesn't offer (yet). The real tricky bit for Americans is how Singapore's tax system (just corporate income tax!) would interact with the US's crazy one (e.g. dividends, capital gains, random other things).
- amazon_not 11y agoEstonia benefits from not taxing profits. So if you invest your profits into the company or just keep the cash in the company there is not tax. Distributed profits are taxed at 20%. Depending on what you do this may benefit you and makes deferring taxation indefinitely trivial.
- yequalsx 11y agoI don't believe corporations in the U.S. pay taxes on dividends they disburse. Generally the principle in the U.S. is that whenever you receive money you get taxed. There are lots of ways to reeive money hence lots of different taxes. It seems reasonable. If one form of income were not taxed then things would end up getting skewed in that direction.
- travisp 11y ago>I don't believe corporations in the U.S. pay taxes on dividends they disburse. Generally the principle in the U.S. is that whenever you receive money you get taxed. This is not true. While many countries do not do this, dividend payments are not tax deductible in the US. In fact, they are double-taxed (at both the corporate and individual level) which is one of the reasons/arguments for individual taxes on dividends being taxed lower than income tax rates.
- zura 11y agoAny experiences creating merchant account on Play store with this? (from unsupported countries). Do you also have to pay income/sales/other taxes to Estonia?
- kaspa130 11y agojust now there is open AMA in Nomadforum, some useful information there https://nomadforum.io/t/i-m-kaspar-director-of-estonia-s-e-residency-program-ama/4769/31 https://nomadforum.io/t/i-m-kaspar-director-of-estonia-s-e-r...
- jcrei 11y agoVery interesting stats on applicants, and use cases for e-residency provided here https://app.cyfe.com/dashboards/195223/5587fe4e52036102283711615553 https://app.cyfe.com/dashboards/195223/5587fe4e5203610228371...
- simonebrunozzi 11y agoI have an e-residency card. This is my experience, and thoughts: http://brunozzi.com/2015/08/22/estonia-e-residency/ http://brunozzi.com/2015/08/22/estonia-e-residency/
- edko 11y agoI am a citizen and a resident of another EU country, and have established a company in Estonia recently. Obtaining e-residency was fast and straightforward. I picked up the card in Tallinn, and opened the company the same day. You will need an address in Estonia, but there are companies that provide that service. I used LeapIn (https://www.leapin.eu https://www.leapin.eu) which also provide accounting services (disclosure: my only relationship to them is that I am their client). Their fees are very reasonable and they can help speed up the entire process. I tried opening a bank account in two banks. One rejected me because (despite having the company) I did not have sufficient ties to Estonia. The other (Swedbank) was very friendly and opened the account the same day. Again, LeapIn smoothened the process for me. I picked up my banking card three days later and everything worked perfectly. Obtaining a VAT number is more difficult, and I wouldn't have managed without LeapIn's help. You need to convince the tax authorities that there is a legitimate reason why you need it. You need to present evidence (I had a previous company in another EU country) and there are several rounds of dialogue (knowing Estonian, and the local rules is very handy). Overall, I was amazed at how efficient the process is, and how much effort Estonia is putting into making it even better. This really looks like a major strategic initiative for the country, where they are putting a lot of thought and investment. Tallinn really deserves a separate post. It is a very beautiful city, with lots of life and things to do, really good atmosphere, good food, and reasonable prices. Very well worth my one-week trip!