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I'm an Estonian, and live in Estonia, but have a Wyoming LLC (USA company), and currently am contracting for a Finnish company. So far nobody has cared that I h

I'm an Estonian, and live in Estonia, but have a Wyoming LLC (USA company), and currently am contracting for a Finnish company. So far nobody has cared that I have a U.S company, and with Wise (formerly Transferwise) you can easily get an EU IBAN for a USA company as well. Reason for me doing this as opposed to a Estonian company was taxes. As a non-resident company owner in USA, with no office or employees there, I owe no tax to USA, so I really only have to pay income tax based on where I am - which for Estonia is 20%. I do not contract for local companies in Estonia however. They always expect me to become a local employee, which is not in my interest, and there also aren't any Clojure opportunities here, which I specialize in. However contracting for foreign companies has never been an issue because being a contractor is assumed if applying from a foreign country, at least for Clojure developers.

bjornsing 4y ago
Interesting... I thought the tax system was pretty sweet in Estonia. Why don’t you just use an Estonian company and pay yourself mostly in dividends (taxed at 20% IIUC)?
- askonomm 4y ago
  If I have an Estonian company and I want to pay myself a salary, I lose around 55%. Pension is mandatory, public healthcare is mandatory, and they take huge chunks of the %. Now you might ask why don't I want to pay for the pension, or the public healthcare, well it's because the pension fund effectively loses money with its ~2% yearly interest rate, so it's like putting money in a fire, and the public healthcare is really bad in Estonia, especially for 30%. To put that into perspective, if you make, say, 5000 eur per month, then 1500 of that goes to public healthcare, every month. Private healthcare that offers much better service, and much more coverage, is around 150 eur per month. The difference is literally 10 fold in terms of cost, and the quality is mountains different. Now however if I have a U.S company, or really any foreign company, I can then pay myself a salary without these mandatory payments to the government (except income tax, which is 20%) and I can use the 35% that I'm saving on getting myself a private healthcare and investing money with a much better return than 2%. Re: dividends, they are not as flexible as management salary, which I can pay in any amount, at any time, and as many times as I want. Which is what I do now, with a foreign company.
wheybags 4y ago
So, I've been thinking of registering a limited company for some projects of mine, so that I can have a "portable legal identity", and I was mainly considering either an Irish or Estonian company (I am Irish, but i don't live there anymore). Is a US company a good alternative? Did you need to have some connection or representative in the US to open one?
- askonomm 4y ago
  You need to have a legal agent in the US, but there are plenty services who offer that for you. I personally recommend https://wyomingllcattorney.com/ https://wyomingllcattorney.com/ if you want to set up a company in the U.S. You do not ever have to physically go there, and the whole process from start to finish took me about a month, of which 99% was just waiting.

bjornsing 4y ago

Interesting... I thought the tax system was pretty sweet in Estonia. Why don’t you just use an Estonian company and pay yourself mostly in dividends (taxed at 20% IIUC)?

askonomm 4y ago
If I have an Estonian company and I want to pay myself a salary, I lose around 55%. Pension is mandatory, public healthcare is mandatory, and they take huge chunks of the %. Now you might ask why don't I want to pay for the pension, or the public healthcare, well it's because the pension fund effectively loses money with its ~2% yearly interest rate, so it's like putting money in a fire, and the public healthcare is really bad in Estonia, especially for 30%. To put that into perspective, if you make, say, 5000 eur per month, then 1500 of that goes to public healthcare, every month. Private healthcare that offers much better service, and much more coverage, is around 150 eur per month. The difference is literally 10 fold in terms of cost, and the quality is mountains different. Now however if I have a U.S company, or really any foreign company, I can then pay myself a salary without these mandatory payments to the government (except income tax, which is 20%) and I can use the 35% that I'm saving on getting myself a private healthcare and investing money with a much better return than 2%. Re: dividends, they are not as flexible as management salary, which I can pay in any amount, at any time, and as many times as I want. Which is what I do now, with a foreign company.

wheybags 4y ago

So, I've been thinking of registering a limited company for some projects of mine, so that I can have a "portable legal identity", and I was mainly considering either an Irish or Estonian company (I am Irish, but i don't live there anymore). Is a US company a good alternative? Did you need to have some connection or representative in the US to open one?

askonomm 4y ago
You need to have a legal agent in the US, but there are plenty services who offer that for you. I personally recommend https://wyomingllcattorney.com/ https://wyomingllcattorney.com/ if you want to set up a company in the U.S. You do not ever have to physically go there, and the whole process from start to finish took me about a month, of which 99% was just waiting.