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Estonia is running its country like a tech company

• znq 7y ago
  I've run and invested in businesses in multiple countries (Spain, Germany, US, UAE, Sri Lanka). One of them (Mobile Jazz - a fully remote company) we've moved to Estonia in 2016. One of the best business decisions we've made admin-wise. While there are for sure better alternatives when it comes to "saving on taxes" (I'd say Estonia is in the European average with 20% corporate tax and an interesting taxation model on capital distribution), it is definitely a huge improvement when it comes to dealing with authorities compared to virtually elsewhere in the world, based on what I've experienced myself of heard from others. Estonian people speak really good English. Typically things just work as they should and it something doesn't, they're super fast in responding and very eager to solve the problem for you. While I don't have visibility on everything that happens in the country, in terms of how they handle their bureaucracy, they're certainly a role model for other countries.
  • AhtiK 7y ago
    Important to note that this 20% corporate tax is applied to the taxable payment (e.g. dividend payouts). There are no taxes to pay for the yearly profit, which makes it much easier for companies that do plan to reinvest the income over the years or just hold it. Also, one should probably have employees or customers physically in Estonia, otherwise the company tax residency might change into other jurisdictions.. IANAL. I'm curious if there are any other EU countries with a similar flexibility (corporate income tax not applied until the "payout event")?
    • gzer0 7y ago
      > Also, one should probably have employees or customers physically in Estonia, otherwise the company tax residency might change into other jurisdictions.. IANAL. You no longer need physical presence with their e-Residency program. [1] https://e-resident.gov.ee https://e-resident.gov.ee
      • atlasunshrugged 7y ago
        You no longer need physical presence to register your company and do business through the programme but you should still be very careful about taxation, tax residency whether personal or corporate gets very complex very fast and I highly recommend talking to a tax expert
        • pmjordan 7y ago
          Yes, the country/countries where your physical office(s) is/are located (or rather, where people - founders or employees - are doing the work that is the basis of the revenue on which you're generating a profit) will likely want a piece of the pie. Certainly, a decade or so ago, it was popular to register a limited company in the UK whose physical presence was on the continent. Invariably, this meant dealing with both tax authorities. It seems to have lost its attractiveness after laws for GmbH and similar were relaxed in various countries. Brexit has pretty much killed any remaining demand, at least for real companies. (As opposed to shell companies for tax evasion or money laundering purposes, for which the UK remains as popular as ever - and which are a major reason for big money backing Brexit, as the EU has been looking to crack down on the practice.)
    • lauriswtf 7y ago
      Latvia has a similar corporate income tax model which is also good for reinvesting. Essentially 0% corporate income tax until you want to pay out.
    • einpoklum 7y ago
      Ah, so it's one of these tax-haven states which accelerates the global "race to the bottom" regarding corporations' tax rate? That's not a good thing IMHO.
      • dullgiulio 7y ago
        It's clearly stated that the tax level is 20%, not a tax-haven at all. Estonia in general is very far from the ultra-liberal country it has been depicted in the past (especially by the US Republicans): it has average EU taxation, minimum wage, taxpayer-funded public healthcare, ...
  • austhrow743 7y ago
    Did you/people internal to your company set that up or did you use some agency that specialises in incorporating businesses in Estonia?
    • Avamander 7y ago
      I'd say Estonia is one of the few places such companies are not required for setting up, having an accountant to consult before and after is sensible however.
      • atlasunshrugged 7y ago
        Highly recommend speaking with an accountant. E-Residency has some service providers they vetted here https://e-resident.gov.ee/marketplace/service-providers/ https://e-resident.gov.ee/marketplace/service-providers/
    • krn 7y ago
      Xolo Leap[1], formerly LeapIn, is probably the most popular way of starting a company in Estonia as a foreigner. As an EU citizen, I see Estonian e-residency oriented more towards the people who are from outside the EU and want to establish their presence in the EU market. For instance, it's one of the easiest ways to get access to Stripe for people from Russia, Ukraine, Belarus, Serbia, Israel, Turkey, and many countries from other continents. But it's not such a good option if you operate from other EU country, such as Germany, because your Estonian company will likely be taxed as a local company there. In any case, I would personally choose Ireland over Estonia because of the absence of language barrier and almost 40% lower corporate tax, or even the UK, where incorporation is not that much harder or more expensive than in Estonia[2], but regulations are much clearer and laws are much more stable. [1] https://www.xolo.io/leap https://www.xolo.io/leap [2] https://www.crunch.co.uk https://www.crunch.co.uk
  • dasanman 7y ago
    Hey, cool company!
  • Iv 7y ago
    I am French living abroad. I had a one person (freelancing) company when I moved to Japan. It was hell interacting remotely with the administration. I am kind of left wing so I believed in not doing tax optimization and paying the taxes I owe at home, I was told this was suspicious. If I ever do business again within the EU area, I will give Estonia a try. The prospect of an administration set up for working remotely is very attractive to me.
    • gumby 7y ago
      I share your pain. I was just last night on the phone to France because of a wrangle over a French bank account held by an Australian and German (me and my wife) both currently living in the USA. I also agree with you on the tax front; at least with regards to the French authorities. Luckily Australia and the US are much simpler in this regard.
  • hos234 7y ago
    It barely has a million people. You have to compare it with other countries of similar size and population. Comparing it to Spain, Germany, US, UAE, Sri Lanka is like comparing mice to dogs, cows, elephants and blue whales. That said, ofcourse there are things that can be learnt and applied to similar sized towns, cities, states etc that want these features.
    • growlist 7y ago
      Perhaps the lesson is that decentralisation leads to better outcomes?
    • Scoundreller 7y ago
      > You have to compare it with other countries of similar size and population. Countries aren't their own silo anymore. A small country that's in Eurozone, EU and NATO has a lot of "big country" benefits than a small country not in those groups.
      • gumby 7y ago
        That's what they are tryig to arbitrage (and why not?): big country benefits with small country benefits. This is what Delaware managed to do successfully in the US.
        • Scoundreller 7y ago
          As for NATO, it’s better for the big countries if they can hold Russia back in the Baltics and let them be the collateral damage. Sounds win-win to me. And they get access to lots of cheaper labour directly (migration) and indirectly (outsourcing to people that will still buy your stuff). As I’ve posted, the big banks in the Baltics are primarily not Baltic. That access has its benefits, but also its price. I guess I’m a believer that free trade works out well, well enough to create a system to support those left behind. Often the latter is left out however.
          • gumby 7y ago
  • escanda 7y ago
    One thing people don't take into account when opening a company is the process and costs involved. I payed to close mine around 800 euros only to dissolve during the course of the following months. Besides paying the corresponding taxes. Another issue with a company abroad is you have to blindly trust your accountant. If I were to do it again I could have incorporated locally.
  • odiroot 7y ago
    Would you recommend Estonia for setting up a freelancing business -- as in establishing a legal entity for self-employment?
    • tguedes 7y ago
      From what I've read I would say so, it's super easy with their e-citizenship.
      • odiroot 7y ago
        One thing is easy but other thing is how "expensive" it is.
      • usr1106 7y ago
        Only yesterday that there was an article in the Finnish newspaper Helsingin Sanomat saying that the e-citizenship is getting increasingly questionable. Until 2 years ago the e-citizenship was good to open a bank account. After major money laundering scandals (probably unrelated to e-citizenship) you cannot only no longer open a bank account as an e-citizen, but even existing ones of e-citizens are getting closed. A business without a bank account sounds highly limited to me.
    • gamblor956 7y ago
      Not if you're doing the work in another country. You just end up owing taxes and tax returns to two countries instead of one.
    • Mirioron 7y ago
      It depends on what your alternatives are. My guess is that it's not worth it because you still have to pay the taxes an employer would and what an employee would - social security and income taxes. You can take a look at the calculator: https://www.calkoo.com/en/salary-calculator https://www.calkoo.com/en/salary-calculator The taxation system itself is very simple, if VAT isn't involved. You can just enter your annual income and the calculator will tell you all of the numbers. Just make sure you use the "salary/wage fund" as the income field for a freelancer. One thing to keep in mind though is that countries where you actually perform the work usually want a piece of the pie. That can complicate things significantly.
  • goatinaboat 7y ago
    Estonia (in fact all the 3 Baltic States) under-taxes at present in a way that’s not sustainable. For example there is a significant NATO presence there to protect them from the Russians. At some point someone will want them to make a fair contribution to that, such as purchasing a few tanks and fighter jets... https://www.army.mod.uk/deployments/baltics/ https://www.army.mod.uk/deployments/baltics/ https://www.nato.int/cps/en/natohq/news_165751.htm https://www.nato.int/cps/en/natohq/news_165751.htm
    • frooxie 7y ago
      According to NATO's 2018 report, Estonia was one of only six NATO countries (out of 29) that met the goal of dedicating 2% of their GDP to defense. Not that dedicating 100% would stop Russia if they wanted to invade.
      • pinkfoot 7y ago
        The entire French and UK nuclear arsenal raining down on Moscow and St Petersburg is not a deterrent? Try not talk nonsense on HN.
        • ridewinter 7y ago
          As the current American President has shown, treaties and obligations only go so far. That destruction of trust may be the most lasting damage that he causes.
        • distances 7y ago
          I think they meant 100% of Estonian budget.
• jaclaz 7y ago
  I find more intriguing/interesting than the whole actual Estonian e-id/whatever technological achievements, that the President of a country writes an article (of course not very critical on the way the governement administration is managed) on qz.com.
  • dna_polymerase 7y ago
    See also, Erdogan on WSJ: https://www.wsj.com/articles/turkey-is-stepping-up-where-others-fail-to-act-11571093850 https://www.wsj.com/articles/turkey-is-stepping-up-where-oth...
    • jaclaz 7y ago
      Yep, though I wouldn't personally put the Wall Street Journal on the same level as qz. That they (WSJ) published Erdogan's piece is (to me) perplexing, but for completely different reasons. This one on qz.com seems, at least to me, nothing different from the several "puff" articles we have read in the last few years about the digital "revolution" in Estonia (and e-residency, etc.), but till now they were all or almost all by either enthusiasts/futurists/thintankers or by people directly or indirectly involved in the program at a much lower level than the President. Personally I always had the feeling that these pieces are not entirely unlike the good ol' gnome business plan: 1) get digital in Estonia (id, residency, etc.) 2) ? 3) profit No doubts that there may be a number of non-Estonians that may benefit from the one or the other provisions of the program, but all in all they should be a niche of "digital nomads" and/or "digital only" very small firms.
      • atlasunshrugged 7y ago
        Love the gnome business plan, I'm a huge South Park fan. But I do think there is real value in it for some people (especially digital nomads) but things like e-Residency running a company remotely definitely aren't going to benefit everyone, building a solution that solves every person's problem is a crazy undertaking
  • elgenie 7y ago
• theredbox 7y ago
  A lot is said about Estonia but Lithuania is better positioned and grows faster than Estonia. It's interesting but to me Estonia cant quite compete with its neighbors to the point of becoming wealthier than they are now.
  • atlasunshrugged 7y ago
    I'm biased because I lived in Estonia and worked for their govt but why is Lithuania better positioned? Very rarely did we hear companies compare Estonia to Lithuania when they were making a choice for where to build their business
  • romanovcode 7y ago
    I think this competitevness is stupid and Baltic countries should stand together because of so much history.
    • atlasunshrugged 7y ago
      I agree, mostly because I think it's just practical for small markets (like ~1 million person countries) to band together but I remember in Estonia everyone always thought of themselves more as a Nordic country rather than a Baltic one
      • romanovcode 7y ago
        They have similar language to nordic ones, Yes. But the place itself feels and looks totally as Baltic country and there is absolutly nothing wrong with it. (I've been in all 3) I think the reason is that Estonia and Latvia used to be same country - Livonia but I might be wrong.
        • mbeex 7y ago
          > They have similar language to nordic ones, Yes. No :) Estonian an Livonian are Finno-Ugric. They have a relation to Finnish (but in no way to Scandinavian languages) and Hungarian. This group ist vastly different from any other language in Europe including the Slavic languages. Moreover, Livonian is not to be considered as equivalent to Latvia - Latvian being the official language there.
• Andrew_nenakhov 7y ago
  We have recently registered a company in Estonia. The process was very smooth and easy. All hail Estonia, the small county that could! (Opening a business bank account is a lot of pain, so there is still room for improvement)
  • znq 7y ago
    We have a business bank account with LHV. For us it was as easy as making an appointment, quickly flying there and walking into their main office in Tallinn. After ~30 minutes everything was set up. That was 3 years ago, though. Maybe things have changed?
    • sccxy 7y ago
      Opening bank accounts is more difficult even for locals. Money laundering scandals with Danske Bank and Swedbank have made it more complicated. But I guess it is still easier than in other countries.
    • pingec 7y ago
      Were you introduced to the bank by an agent or did you go directly to the bank?
    • Andrew_nenakhov 7y ago
      Thing is, we are from Russia. And LHV requires some "proof of our company connection with Estonia economy, like existing contract or utility bills". What proof can there be if the company is just started and not fully operational without bank account (hence, no contracts) and is not physically present in Estonia (hence, no utility bills)? It sucks being Russian these days because of our warmongering dictator. :-/
      • corford 7y ago
        I've heard a borderless account with TransferWise can be a quick, painless route
• xvilka 7y ago
  Hopefully, many countries will follow.
  • hanniabu 7y ago
    I doubt it...doing things the old fashion way by paper makes it too easy to get away with things.
    • darkwater 7y ago
      But at the same time having everything digital gives much more control on everyone to a State (if the laws permit it to do so... or maybe even if they don't)
• mtgx 7y ago
  Before people start praising Estonia for its e-voting system, which inevitably happens on such stories, let me remind you that the system was indeed open to compromise: https://www.zdnet.com/article/estonias-id-card-scrisis-how-e-states-poster-child-got-into-and-out-of-trouble/ https://www.zdnet.com/article/estonias-id-card-scrisis-how-e... The timeline may also match the hack the GCHQ and NSA did against the Estonian e-ID provider, Gemalto: https://theintercept.com/2015/02/19/great-sim-heist/ https://theintercept.com/2015/02/19/great-sim-heist/ So remember that even with hardware tokens used in electronic voting, which are supposed to be much more secure than using other forms of authentication, you still run the risk of having the election compromised, especially since an election is something important enough that more than one major country could be interested in manipulating at any given time. It's not like the "well, I'm nobody, so why would the NSA/other spy agency target me?!" situation at all. We're talking about the decision of who gets to run a whole country, and sophisticated adversaries will be very interested in influencing that if it can serve their interests. We know China hacks tons of countries, we know Russia has been meddling with all sorts of elections lately, and we also know that for the past 70 years the USA has interfered in about one election per year, on average. This is not just theoretical stuff that would never happen. And I'm sure there are many Middle-Eastern and other Asian countries interested in influencing their rivals' elections, too. https://www.channel4.com/news/factcheck/americas-long-history-of-meddling-in-other-countries-elections https://www.channel4.com/news/factcheck/americas-long-histor...
  • 2rsf 7y ago
    But what are the alternatives ? paper ID cards are even easier to fake
  • allworknoplay 7y ago
    Came here to post this, their ID system sounded like the greatest thing ever until... It's a monoculture, and therefore extra brittle and subject to attacks. If a country is gonna go all in on a single solution, it had better be a tried-and-true one.
  • rebane2001 7y ago
    Voting is flawed in general. It'd be way harder to attack Estonia's e-voting system than those touch-screen voting machines in the US. I have faith in the Estonian system once they make e-voting completely transparent (which is something they're working on, but it's not there yet)
• sgt3v 7y ago
  When EKRE rules over, it will change dramatically to opposite direction.
• atlasunshrugged 7y ago
  I had a chance to work for the Estonian government for a brief while (headed up business development for e-Residency). While a few things may be overblown about their e-gov initiatives (I'm thinking some of the blockchain hype that foreign journalists didn't really fact check) they really have done an incredible job making their business environment accessible for foreigners. There really is a strong mentality of delivering government services with the end user as the customer mentality rather than the usual bureaucratic nonsense I was used to running businesses in the U.S. and Germany.
  • anilakar 7y ago
    Germany and Estonia have two completely opposing views when it comes to personal information, and the Estonian way is the way to success. OTOH, the issue with USA is the conflict of interest between the public and private sector. Turbotax is a prime example.
    • majewsky 7y ago
      As a German, I don't think the issue is with our handling of personal data. The real issue is Kleinstaaterei, a not-quite-translatable word that describes every small administrative entity insisting on doing its own thing and failing to see the bigger picture. What today is Germany used to be about 100 separate nations until 1871, and a still somewhat loose federation until 1918. I think the mentality from that time is still pervasive today in many areas, particularly in bureaucracy. Add to that that Germany is large enough to make the other EU countries play by its rules most of the time. That removes incentive to overcome nonsensical idiosyncrasies. Estonia is under a lot more pressure here because they cannot win by weight alone.
      • mxfh 7y ago
        This. On top of the dedication, Estonia has the advantage of being a single entity in comparison to Germanies federal org. (Population wise it's also only slightly bigger than Germanies second smallest Bundesland, the Saarland) If you want to be intimidated try this, already reduced, chart of the state of implementation of the Onlinezugangsgesetz (OZG). https://i.imgur.com/BYM6Rnu.png https://i.imgur.com/BYM6Rnu.png source: https://www.normenkontrollrat.bund.de/nkr-de/stellungnahmen/monitor-digitale-verwaltung-3-1675866 https://www.normenkontrollrat.bund.de/nkr-de/stellungnahmen/...
• thrwoew4324 7y ago
  Taking the govt. services online is generally a good idea, but there are a lot of minefields along the way and is inherently tied to the country in question. I can only speak from the context of India where many things have indeed moved online, but are not exactly accessible. For one thing, they are essentially restricted to a small class of English speakers - which is expected since the English-speaking elite have a monopoly on education and thus technological literacy. This has meant that all the small shops which are now forced to file GST invoices (3 times a month ?) need to hire touts of some kind to get their work done. There are touts for everything, since very few people have computers or the necessary skills to use them - touts for filling in passport applications, for filling in DL forms etc.... and frankly it's all very frustrating, since you'll have to take a printout of the online application and visit some Indian Babu anyway. Since "Indians" have been decided by the rulers to be essentially corrupt, it has also meant that there is no escape from the inflexibility of the straightjacket that is the Indian bureaucracy. Classic case of extremely poor people employed as manual labour being denied food rations because their fingerprints don't match that on record, or simply because the cellular data is patchy has quickly been covered by the UIDAI and their cronies in the government. The language issue also shows up often because, after 70 years of so-called independence, the country has yet to create a unified transliteration scheme to go along with its "destroy all Indian languages" policy... and different transliterations of brahmi (for instance "sri" and "sree" are both the same श्री) often require absurd name-change announcements and numerous "letters" to random officers (and the usual palm greasing) in order to get access to services. For much of India's "independence" a extractive state run for a handful of elites generally kept away from governance while its elites enjoyed vacations abroad and went to hospitals in Vienna (other than passing insane, unenforceable laws). I'm generally afraid what the deeply rooted colonial mindset will give rise to, now that it has also has access to technology. UIDAI and its sister schemes was and remains a rather scary venture with what appears to be a view of replicating China's draconian policies.
  • sbmthakur 7y ago
    You are forgetting that Estonia comes nowhere close to India in terms of population and literacy. India is now estimated to have 125 million(and increasing) English speakers. Not sure if all of them are part of "elite" that you're talking about.
• fithisux 7y ago
  The title says nothing, we need KPIs, average life span, mortality rates, unemployment rates, health indices, education indices, overall quality of life indices. Fancy titles are meaningless.
  • atlasunshrugged 7y ago
    It seems unlikely they would include all of that in one article - if you're interested the statistics agency has most of that data I believe https://www.stat.ee/en https://www.stat.ee/en
  • iagovar 7y ago
    https://tradingeconomics.com/estonia/indicators https://tradingeconomics.com/estonia/indicators
• socialdemocrat 7y ago
  As a Norwegian I can relate to many things written here. Estonia is clearly ahead of us but this thing of not being the innovator but still using off the shelf technology was something I was forced to reflect upon while living in the US 15 years ago. It was surprising how the country behind so much technology innovation was so bad at using it. It was noticeable both in the private and public sector. It was something that I was later reminded of when reading guns, germs and steel. The author Jared Diamond remarked that the technological progress of any society is not primarily decided by your ability to innovate but by your ability to adopt and use the inventions of others. As he remarks, most innovation happens outside your own country, so it is the ability to learn from others which matters most. A thing I think people should be aware of when obsessing about having the most cutting edge researchers rather than a technology literate population.
  • jaydenseric 7y ago
    America is very backwards in tech for daily life. About 2 years ago I was blown away when I arrived at the San Francisco airport and had to buy a train card with a Visa card; the customer service guy got flustered and pulled an old carbon paper swiper thing out from under the desk, and asked for my signature. In Australia it's all wireless payWave or PayPass. My Chinese GF uses her phone to pay for things and considers me old fashioned for using a card.
    • puranjay 7y ago
      America's banking system is the best example. My clients still pay me via ACH that takes 2-3 days to clear. Meanwhile in my local market, I can send/receive money instantly for either zero or a fee capped at less than $0.10/transaction.
      • kombucha11 7y ago
        Seems like FedNow was created to ease some of these pain points. https://multichannelmerchant.com/blog/fednow-service-will-offer-efficient-faster-secure-payments/ https://multichannelmerchant.com/blog/fednow-service-will-of...
• pavlov 7y ago
  If you're thinking about starting a company in Estonia under the "e-residency" program, you should know that Estonian banks have recently become very skeptical about opening bank accounts for foreigners. It's not enough that you have an Estonian corporation, you'll probably be expected to demonstrate that your business has actual ties to Estonia. Finnish entrepreneurs are being denied bank accounts despite the close ties of the two countries: https://www.hs.fi/talous/art-2000006279056.html https://www.hs.fi/talous/art-2000006279056.html (Article in Finnish only, sorry) The background for this change is a huge money laundering scandal where Estonian banks took in Russian money over decades with very few questions asked... It sucks that "little guy" startup founders are the ones getting excluded, but that's how it goes.
  • Lucadg 7y ago
    I can confirm that. We had to settle for a European fintech after trying many banks. It feels like the banking system has its own rules and the Estonian government can't do much about it.
  • atlasunshrugged 7y ago
    Unfortunately, it isn't a new issue, I left the e-residency programme soon after the banking scandal (unrelated to why I left) but bank accounts have always been a major problem, especially because most of the business banking sector in Estonia is run by foreign firms with local branches rather than Estonian banks.
    • pavlov 7y ago
      Startup idea: Create the globalized equivalent of Silicon Valley Bank in Estonia — a local bank that serves credible startups around the world, with staff that has the competence to evaluate customers’ tech chops.
      • ex3ndr 7y ago
        Literally any creepy bank will be better than SVB, no?
• anilakar 7y ago
  Rememeber: We're talking about a country that had to be bootstrapped after the fall of Soviet Union. They have had very little legacy (as in "old but not old enough to warrant a replacement") tech and legislation to deal with. My personal favorite is their wireless PSTN: Take existing NMT technology and give people tabletop terminals that will accommodate ordinary analog phones.
  • PopeDotNinja 7y ago
    I had a friend working in Indonesia in the 90s, on Sumbawa. He mentioned how the locals had DVD players, but they had skipped ever having VCRs. I wonder what it looks for them now. Are they all on streaming services, or do they still use 90s era DVD players. I wonder what Estonia will look like in 20 years.
    • 9nGQluzmnq3M 7y ago
      Indonesia has incredible mobile penetration rates (133% this year), so odds are they're streaming. https://www.slideshare.net/DataReportal/digital-2019-indonesia-january-2019-v01 https://www.slideshare.net/DataReportal/digital-2019-indones...
• meerita 7y ago
  I have some questions, if I want to make a free-speech protected project, is Estonia a country that will protect my business over silly demands or anything close like that?
  • Avamander 7y ago
    There aren't any hate speech laws, but inciting uprest, and libel are both forbidden.
• buboard 7y ago
  I found this podcast about estonia's digital economy very informative https://www.youtube.com/watch?v=oTyOboVluxA https://www.youtube.com/watch?v=oTyOboVluxA It's interesting how the East of europe seems to have similar aspirations. Growing, poor or former poor countries (Estonia, latvia, Romania, bulgaria, cyprus, malta) are bullish on using the EU status to attract foreign investors and enable entrepreneurship, including lowering their taxes, while the west of EU seems to be doing the exact opposite, sending their entrepreneurs abroad.
  • shaki-dora 7y ago
    Eastern Europe may have advantages in terms of bureaucracy. It's far easier to experiment with the rules when you don't have a huge number of existing businesses/processes that need to be changed, very similar to how it's easier to change an API in a newish products vs, say, Windows. BUT: Eastern Europe also has huge drawbacks. In countries like Poland, Hungary, or Bulgaria, your risk of abrupt changes in the law (see above) or simply ignorance of the rule of law, is somewhat elevated compared to France, the US, or Germany. And while these countries want to attract foreign investors, if you actually want to spend significant time in the country, or hire foreigners to work there, you better make sure your neither dark-skinned nor jewish.
• sgt101 7y ago
  Let's hope that the model doesn't include a hostile takeover by a big incumbent.
• seddona 7y ago
  Anybody got experience in UK vs Estonia? I have lived and run companies in the UK and USA. The UK is light years ahead of the US in terms of all online interactions with the government. It's also been a long time since I have done any paper-based interaction with the government in the UK, the online systems have been really good for years. Curious how it compares to Estonia.
  • skeletal88 7y ago
    Don't know about the UK, but you really don't need to do anything on paper here. There may be some special cases, but almost everything can be done over the internet.
  • atlasunshrugged 7y ago
    I don't have a UK/Estonia company but saw the comparisons a lot when I was working for e-Residency. My understanding is that it's pretty comparable in terms of being all online, solid tax structure, etc. For me the two biggest factors would be - where are my clients and how much do I care about having a company in the EU. If most of your clients/employees/ops are in the UK, I would probably keep it there, if they're in the EU or being part of the EU is important to you, I would consider Estonia (plus the instability of Brexit throws a bit of a wrench into the equation)
• dimitar 7y ago
  No opinion on Estonia and its e-government, but running a country like a tech company sounds like a plot of a comedy set in a dystopia. I certainly hope that Estonia is ran better than most tech company Tech companies have many problems that I don't want see in a Government: - Security breaches (and just like every other tech company Bulgaria recently had a dump of the personal data of 5 million citizens) - Privacy issues, like contractors listening in on sounds recorded by their devices - tons of intrusive ads - discrinatory pricing - products people rely on being killed off for no reason - hype-, and resume-driven development - general lack of accountability, masked with trendy but misunderstood methodologies like Agile, Scrum - move fast and break things works for Facebook, but not for health insurance software Tech companies fail all the time, but the pieces are picked up by investors, yet governments cannot afford to fail in the same way.
  • buboard 7y ago
    Most countries are ran far worse than a company. If citizens had the option to freely jump between countries, most of them would go bankrupt, that's why they rely on coercion. Very few countries are ran efficiently and they re typically very small like Singapore.
    • ahartmetz 7y ago
      Usually only the country one would move to is restricting movement. So what the hell are you talking about?
      • buboard 7y ago
        Exactly
      • RealityVoid 7y ago
        Obviously, lots of countries people would move _from_ would restrict movement as well. See countries from the former communist block.
    • Sag0Sag0 7y ago
• puranjay 7y ago
  Does anyone here any experience running an Estonian company from India? Any links to good tax lawyers?
  • atlasunshrugged 7y ago
    Not directly but I would recommend checking out the e-Residency marketplace where they have vetted service providers (1Office is good) and asking in the E-Residents FB group https://e-resident.gov.ee/marketplace/service-providers/ https://e-resident.gov.ee/marketplace/service-providers/ https://www.facebook.com/groups/eResidents/ https://www.facebook.com/groups/eResidents/
• aearm 7y ago
  Interesting! to see how to run money laundry like a tech company. https://www.economist.com/finance-and-economics/2019/10/17/a-massive-money-laundering-scandal-stains-the-image-of-nordic-banks https://www.economist.com/finance-and-economics/2019/10/17/a...
• juskrey 7y ago
  I had a pretty intense honeymoon with Estonia, even had a relatively popular blog on e-residency, have visited Estonia twice (great experience btw).. And, after four years, I have reopened my company in UK and trying to liquidate my Estonian one (today I have received a denial letter which says that only Estonian citizen can close my company).. In short: Vague frequently changing rules, introduction of strange complex regulations over time (e.g. contact person, management board member tax which is kinda avoidable or not at the same time - "Schrodinger tax").. Expensive business services and accountants (yes, US and UK are cheaper!), volatile tax rules interpretations.. Lack of googlable good information overall, and local accountants are not that hi level pros in nomadic IT matters at all. Also totally non-cooperative Estonian banks. Upon all of that, UK manages doing everything without fragile e-card, which, honestly, adds more anxiety over access loss instead of benefits. Has TONS AND TONS of proper official information with tutorials. Generations of good accountants and stable business and tax regulations.
  • repomies691 7y ago
    Similar experience with Estonia. It is way overhyped to what it is in practice. It is quite tiny and poor country, and understandably they try to attract foreign business and investors. However just some e-residency card which is not that useful in practice doesn't solve that. The general operating environment feels like that old fusty soviet union, and that is just not that easy problem to solve.
    • juskrey 7y ago
      Not that it really feels like old Soviet (I was born in really "Old Soviet" one), but it surely has a bad PR taste targeted on "influencers", VC media and fellow bureaucrats from other countries (like they constantly trying to win some bureaucratic Oscar or something), instead of entrepreneurs, and all of that have become very irritating in the last couple of years.
  • leowoo91 7y ago
    > I have received a denial letter which says that only Estonian citizen can close my company so in order to close your company, you need some citizen to acquire it first?
• Gpetrium 7y ago
  Creating a bank account as a foreigner has become increasingly difficult since a subsidiary of Danske [1], a prior Fortune Global 500, was caught in a major money laundering case which has brought the scrutiny of EU and US regulators into their banking sector. For those interested in opening an e-business in Estonia, please be mindful that due to the 'Tech Company' way in which the government looks to operate, that there is an increasing rate of change in regulations which can impact your business decisions, although major generic areas such as Corporate and Personal tax rate has trended downwards (around 25% in 2004 and 20% now). [1] https://en.wikipedia.org/wiki/Danske_Bank#Danske_Bank_(Finland) https://en.wikipedia.org/wiki/Danske_Bank#Danske_Bank_(Finla...
• DonnyV 7y ago
  Income inequality is very large there. https://borgenproject.org/top-10-facts-about-living-conditions-in-estonia/ https://borgenproject.org/top-10-facts-about-living-conditio...
  • Barrin92 7y ago
    also, the per capita income is no higher than in Lithuania which one wouldn't guess given the barrage of articles about Estonia's 'innovative' government. Relatively sound advice is that whenever someone advertises to run the government 'like a business', the outcome is going to be 90% disappointing and hot air. This is essentially just a huge PR campaign, the electronic voting is a security disaster, and if you see a government official talk about putting things 'on the blockchain' just run.
    • dullgiulio 7y ago
      The government has been running "on the blockchain" for a while, with projects like the X-road, which are also used by other countries (the other two Balitc countries and Finland). It is a blockchain in the only way that makes sense: a cryptographically secure ledger run by a central authority (government).
      • Barrin92 7y ago
        well, that's weird because according to the institute that runs the entire thing (https://www.niis.org/blog/2018/4/26/there-is-no-blockchain-technology-in-the-x-road https://www.niis.org/blog/2018/4/26/there-is-no-blockchain-t...), there is no blockchain technology involved, it merely uses some hashes to link data together, as do plenty of age-old protocols. This is a good example of why these PR campaigns are silly.
• alt_f4 7y ago
  does that mean every year they layoff 5% of their weakest citizens
• ptrckekn 7y ago
  Choosing markets brings prosperity. Like the "German Miracle" after WW2 (not the Marshall Plan), when you abandon bureaucratic regulations and allow the market to take over, vast and quick advancement comes, and everyone does much better. https://fee.org/articles/how-estonia-yes-estonia-became-one-of-the-wealthiest-countries-in-eastern-europe/ https://fee.org/articles/how-estonia-yes-estonia-became-one-...
• barce 7y ago
  This piece is shocking in that nobody was interviewed. Not one single source anonymous nor named. This fails journalism 101 for me.
  • ivarv 7y ago
    The author is the president of the country! Who would you expect her to interview?
    • barce 7y ago
      Ordinary citizens: Even in a US presidential state of the union, the Presidents (Trump included) will quote ordinary citizens about how the country is doing.
  • usr1106 7y ago
    It's not journalism. It's clearly indicated that the authour of the is the president of the country. So a nice term might be guest writer, but of course everybody knows that it is as neutral as a paid advertisement.
• known 7y ago
  Without Cashless it's not possible
• vincent-toups 7y ago
  So with the expectation that it will either succeed wildly and they'll sell it to google or it will flame the fuck out and take years off of its employee's lives?
• simonebrunozzi 7y ago
  My understanding is that Estonia's tech push has some "great PR" but very little substance, and some of my friends' experiences, as well as some other HN commenters on this thread, seem to agree.
• jkingsbery 7y ago
  "For some weird and unexplainable reason, people normally expect better services from private companies than from their own governments." Right or wrong, it's not that unexplainable. People leave their cell phone carrier over bad customer service. They buy their things from a different website because of poor service, or go to a different store. It's cheap to change your allegiance to a different brand. It's a lot more expensive to change your allegiance to a different government. Governments in most places in the world have little incentive to improve. Governments and private companies are both institutions, they just face different incentive structures. Governments aren't somehow magically protected from the people that run them having incentives.
  • disordinary 7y ago
    Surely democracy is an incentive to improve.
    • jkingsbery 7y ago
      I would partially agree with that. An elected official has incentive to remain popular, or a challenger will win the next election. But in the US, much (most?) of the "government" is non-elected bureaucracy that doesn't even change with a change in the party in control.
• kazinator 7y ago
  Skype came out of Estonia; Microsoft destroyed it. `nuff said there.
• api_or_ipa 7y ago
  I've heard so much about Estonia's digital economy, but I struggle to see the effect it has on it's own economy. Now, my data might be bad, but a cursory look at Estonia's GDP growth rate shows perfectly normal growth alongside Lithuania and Latvia [0]. Using Latvia and Lithuania to control for a digital economy, Estonia should see greater growth, but it doesn't. If going head-first into a digital economy had a significant pay-off, it should show up in the data. Until it does, I'm still sceptical. 0: https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_kd_zg&scale_y=lin&ind_y=false&rdim=region&idim=country:EST:LVA:LTU&ifdim=region&hl=en&dl=en&ind=false https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...
  • alko4141 7y ago
    Lithuania itself is pretty good at digital economy and has pretty strong fintech scene for the country that size.
• disordinary 7y ago
  I'd imagine in most developed countries you can do everything online. In New Zealand over the last year I've renewed my passport, setup a company, renewed my drivers license, re-registered my car, opened a business bank account, renewed my mortgage, handled my taxes, etc. All online. The only thing that you can do online in Estonia which I can't do here that I can think of is vote. Of course NZ is usually ranked as either 1 or 2 on the "ease of doing business" rankings and has low levels of bureaucracy so that might not be typical but I'm also a UK citizen and I renewed my passport from NZ online with no fuss.
• dmode 7y ago
  It begs the question, which tech company ? - WeWork, Uber, Facebook ?
• EETruth 7y ago
  Lol, Estonia is Russian infested shithole that will be annexed by the Kremlin in the next 10 years.
• stebann 7y ago
  A country that relies on tech-company-style management. What can go wrong?