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After looking into it for a while, i decided not to do it. Context: I live in Germany for roughly 2/3 of the year, rest is traveling. Not sure where you are lo

After looking into it for a while, i decided not to do it. Context: I live in Germany for roughly 2/3 of the year, rest is traveling. Not sure where you are located, but if you spend the majority of your time in a other EU country (e.g. Germany) you will have a very hard time explaining to the local tax authorities that the company entity is not effectively being managed from Germany. And when you fail to explain this, the company entity becomes a german tax resident and you have to deal with all sorts of paperwork and expensive tax consultants. This is especially true when you have no local employees in Estonia.

istotex 8y ago
This comment should be higher up. If you are a freelancer thinking you could save on taxes by setting up a remote company in Estonia, be aware that your tax authority can (and will) demand that your company be taxed in your home country.
jonstewart 8y ago
Through a US company, I employed a US citizen residing in Germany, as a contractor. It was terrible! Every German accountant we talked to acted like he was a unicorn and wanted to charge us tens of thousands of dollars to figure it out. We muddled through, no doubt doing it wrong... but it didn’t seem like there’d be any way that’d be right.
- koblas 8y ago
  While I'm not a tax expert, our startup is currently building a platform to help with payouts and tax rules. As I understand it, all you need is to get a W9 from the US resident and then file a 1099-MISC annually for him. He may be subject to tax withholding -- but that's all in the instructions on the IRS forms.
throw130 8y ago
Is it ok to operate an Estonian company from Germany though? Not for tax reasons (assuming you would pay the same tax for either a German or Estonian company as others said in the thread) but for bureaucracy reasons. Skipping the whole German procedure.
- sparkling 8y ago
  It is "okay", but you will end up with more bureaucracy. If, as mentioned, you are living in Germany 99% of the time and spend close to zero time in Estonia, the german tax authorities will (sooner or later) argue that the company is effectively being managed from Germany. Then you have to deal with tax nonsense in two countries and finding a tax consultant who will deal with this is rather expensive. Some basics (if you understand German), are explained here: https://www.ihk-berlin.de/blob/bihk24/Service-und-Beratung/recht_und_steuern/downloads/2253294/fc72237a375384d389b29f1e23c815c6/Steuerliche-Grundlagen-fuer_auslaendische-Unternehmer_in_Deutschland-data.pdf https://www.ihk-berlin.de/blob/bihk24/Service-und-Beratung/r...
mkbkn 8y ago
Same kind of thing here in India. As per Indian tax authorities, if your "effective place of business" is India, you will be taxed as per Indian laws. I believe many countries would have DTAA with Estonia. Tax-wise Estonia may not be right for you, but starting a company is a lot easier depending upon where you live. In India, it takes about 30+ days to open a company, not to mention stupid, useless forms and KYC-terrorism.

istotex 8y ago

This comment should be higher up. If you are a freelancer thinking you could save on taxes by setting up a remote company in Estonia, be aware that your tax authority can (and will) demand that your company be taxed in your home country.

jonstewart 8y ago

Through a US company, I employed a US citizen residing in Germany, as a contractor. It was terrible! Every German accountant we talked to acted like he was a unicorn and wanted to charge us tens of thousands of dollars to figure it out. We muddled through, no doubt doing it wrong... but it didn’t seem like there’d be any way that’d be right.

koblas 8y ago
While I'm not a tax expert, our startup is currently building a platform to help with payouts and tax rules. As I understand it, all you need is to get a W9 from the US resident and then file a 1099-MISC annually for him. He may be subject to tax withholding -- but that's all in the instructions on the IRS forms.

throw130 8y ago

Is it ok to operate an Estonian company from Germany though? Not for tax reasons (assuming you would pay the same tax for either a German or Estonian company as others said in the thread) but for bureaucracy reasons. Skipping the whole German procedure.

sparkling 8y ago
It is "okay", but you will end up with more bureaucracy. If, as mentioned, you are living in Germany 99% of the time and spend close to zero time in Estonia, the german tax authorities will (sooner or later) argue that the company is effectively being managed from Germany. Then you have to deal with tax nonsense in two countries and finding a tax consultant who will deal with this is rather expensive. Some basics (if you understand German), are explained here: https://www.ihk-berlin.de/blob/bihk24/Service-und-Beratung/recht_und_steuern/downloads/2253294/fc72237a375384d389b29f1e23c815c6/Steuerliche-Grundlagen-fuer_auslaendische-Unternehmer_in_Deutschland-data.pdf https://www.ihk-berlin.de/blob/bihk24/Service-und-Beratung/r...

mkbkn 8y ago

Same kind of thing here in India. As per Indian tax authorities, if your "effective place of business" is India, you will be taxed as per Indian laws. I believe many countries would have DTAA with Estonia. Tax-wise Estonia may not be right for you, but starting a company is a lot easier depending upon where you live. In India, it takes about 30+ days to open a company, not to mention stupid, useless forms and KYC-terrorism.