4 ms·

I keep seeing a ton of ads for starting a company in Estonia. To those who've done it, what are the pros/cons? For the record, I'm based out of India and have

I keep seeing a ton of ads for starting a company in Estonia. To those who've done it, what are the pros/cons? For the record, I'm based out of India and have been advised to setup in Singapore

dijit 9y ago
Well, if you're trading in Europe that's a huge benefit. But also the big selling factor is how much of their governmental services are digitised and unified. It makes dealing with anything like taxes quite convenient. It's quite smart for Estonia to do this because they have quite a lot of brain-drain. Lots of up-and-coming educated Estonians end up leaving the country to persue jobs in Europe due to the lack of companies operating locally. Trasferwise is capitalising on this, but the government sees it as a reason to heavily invest in making companies want to be in Estonia.
- twfarland 9y ago
  There seems to be a fair bit of tech work here, at least, but the average salary is low, and the personal tax burden (with social tax) is high.
logronoide 9y ago
For me, it’s cheaper to run a company in Estonia than my country (an EU country). You don’t pay taxes if you company has benefits. You pay taxes for the dividends only, which makes the company perfect for very early stages. Also, for an international business a company based in Estonia looks more reliable and “techie” than other countries. And this is important if You sell digital goods or services. I think Singapore can be a good place too, but it’s much more complicated for me.
- vram22 9y ago
  >if you company has benefits. By "benefits" do you mean profits?
  - aurelianito 9y ago
    I believe he means dividends.
  - logronoide 9y ago
    Correct, 'benefit' is a very common English-Spanish false friend for profit. Sorry!
- vram22 9y ago
  >Also, for an international business a company based in Estonia looks more reliable and “techie” than other countries. Not sure what you mean. Singapore seems quite international, reliable and techie, based on what I've read, as well as heard from friends and clients who work there. (There are tons of enterprises that have a base or regional office there, and many startups there too). Interested to know if I got you wrong, or am wrong.
  - logronoide 9y ago
    Absolutely, Singapore is a top place for tech companies. I was comparing Estonia and the country I live.
- kabes 9y ago
  I guess you can only do this for some kind of companies? I've got a Belgian company and it's mostly just me doing consulting work. I live in Belgium and most of my clients are other Belgian companies. So I guess Belgian taxes wouldn't allow me to invoice from my Estonian company?
  - germanier 9y ago
    I don't know anything about Belgium but it's probably similar: If you have a branch located in Germany (which is definitely the case if you are the sole employee permanently living there) you need the pay the same taxes as an equivalent German company for all income derived from there. The Belgian tax authorities must allow you to invoice from the Estonian company (that's part of EU freedoms) but it probably won't save you much taxes.
  - derda 9y ago
    In this case you would still be subject to Belgian taxes and regulations, since your principal place of business is in Belgium. Arguing otherwise could be pretty complicated and would probably require an actual office with employees in estonia and a good tax lawyer.
twfarland 9y ago
Terrible experience here. Endless problems with the ID card, slow, unhelpful support, clunky company admin portal with poor translations. Got spammed by random accounting firms as soon as I was on the company register. I gave up and decided to just continue using my NZ-based company in the end. They need to do a better job if they want to live up to their self-congratulatory marketing.
- comstock 9y ago
  I think it’s much easier if you use someone like leapin to manage the company formation process. I’ve not had any of the issues you’ve mentioned (maybe about 3 spam emails).
  - bragh 9y ago
    Depends on how good of a spam filter you are using. On Estonian mail host zone.ee, about 10 spam e-mails get through every day. Talking purely about Estonian e-mails: on GMail Gsuite, nothing lands in the Inbox, but about 2-4 spam mails per day land in the Spam folder.
    - twfarland 9y ago
      I'm using gmail, which has a great spam filter, but have had a lot land in the inbox.
- bragh 9y ago
  Yeah, sadly it is legally allowed to spam company contacts.
comstock 9y ago
It takes time, I think from initial application to having the company set up, it was about 2 months. One month waiting for authorization, another month for the card to arrive. Setting up the company is then easy. To set up a full bank account you need to go to Estonia. You can setup a transferwise account which gives you a banking facility however. There are other countries where you can setup companies quicker, or with better tax implications. But I don’t think there’s a good option in the EU. If I were you, I’d get the e-residency card now and have it available if you want to quickly start a company later.

I keep seeing a ton of ads for starting a company in Estonia. To those who've done it, what are the pros/cons? For the record, I'm based out of India and have been advised to setup in Singapore

dijit 9y ago

Well, if you're trading in Europe that's a huge benefit. But also the big selling factor is how much of their governmental services are digitised and unified. It makes dealing with anything like taxes quite convenient. It's quite smart for Estonia to do this because they have quite a lot of brain-drain. Lots of up-and-coming educated Estonians end up leaving the country to persue jobs in Europe due to the lack of companies operating locally. Trasferwise is capitalising on this, but the government sees it as a reason to heavily invest in making companies want to be in Estonia.

twfarland 9y ago
There seems to be a fair bit of tech work here, at least, but the average salary is low, and the personal tax burden (with social tax) is high.

logronoide 9y ago

For me, it’s cheaper to run a company in Estonia than my country (an EU country). You don’t pay taxes if you company has benefits. You pay taxes for the dividends only, which makes the company perfect for very early stages. Also, for an international business a company based in Estonia looks more reliable and “techie” than other countries. And this is important if You sell digital goods or services. I think Singapore can be a good place too, but it’s much more complicated for me.

vram22 9y ago
>if you company has benefits. By "benefits" do you mean profits?
- aurelianito 9y ago
  I believe he means dividends.
- logronoide 9y ago
  Correct, 'benefit' is a very common English-Spanish false friend for profit. Sorry!
vram22 9y ago
>Also, for an international business a company based in Estonia looks more reliable and “techie” than other countries. Not sure what you mean. Singapore seems quite international, reliable and techie, based on what I've read, as well as heard from friends and clients who work there. (There are tons of enterprises that have a base or regional office there, and many startups there too). Interested to know if I got you wrong, or am wrong.
- logronoide 9y ago
  Absolutely, Singapore is a top place for tech companies. I was comparing Estonia and the country I live.
kabes 9y ago
I guess you can only do this for some kind of companies? I've got a Belgian company and it's mostly just me doing consulting work. I live in Belgium and most of my clients are other Belgian companies. So I guess Belgian taxes wouldn't allow me to invoice from my Estonian company?
- germanier 9y ago
  I don't know anything about Belgium but it's probably similar: If you have a branch located in Germany (which is definitely the case if you are the sole employee permanently living there) you need the pay the same taxes as an equivalent German company for all income derived from there. The Belgian tax authorities must allow you to invoice from the Estonian company (that's part of EU freedoms) but it probably won't save you much taxes.
- derda 9y ago
  In this case you would still be subject to Belgian taxes and regulations, since your principal place of business is in Belgium. Arguing otherwise could be pretty complicated and would probably require an actual office with employees in estonia and a good tax lawyer.

twfarland 9y ago

Terrible experience here. Endless problems with the ID card, slow, unhelpful support, clunky company admin portal with poor translations. Got spammed by random accounting firms as soon as I was on the company register. I gave up and decided to just continue using my NZ-based company in the end. They need to do a better job if they want to live up to their self-congratulatory marketing.

comstock 9y ago
I think it’s much easier if you use someone like leapin to manage the company formation process. I’ve not had any of the issues you’ve mentioned (maybe about 3 spam emails).
- bragh 9y ago
  Depends on how good of a spam filter you are using. On Estonian mail host zone.ee, about 10 spam e-mails get through every day. Talking purely about Estonian e-mails: on GMail Gsuite, nothing lands in the Inbox, but about 2-4 spam mails per day land in the Spam folder.
  - twfarland 9y ago
    I'm using gmail, which has a great spam filter, but have had a lot land in the inbox.
bragh 9y ago
Yeah, sadly it is legally allowed to spam company contacts.

comstock 9y ago

It takes time, I think from initial application to having the company set up, it was about 2 months. One month waiting for authorization, another month for the card to arrive. Setting up the company is then easy. To set up a full bank account you need to go to Estonia. You can setup a transferwise account which gives you a banking facility however. There are other countries where you can setup companies quicker, or with better tax implications. But I don’t think there’s a good option in the EU. If I were you, I’d get the e-residency card now and have it available if you want to quickly start a company later.