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Ask HN: What surprised you about Estonia e-Residency and running an Estonian OÜ?
From the official information online, joining the e-Residency program and setting up an Estonian company seems relatively straightforward.
I'm considering using an Estonian OÜ for a SaaS business and would love to hear from people who have actually gone through the process.
What surprised you after becoming an e-resident and establishing your company? Were there recurring costs, compliance requirements, banking/payment issues, tax complications, or other operational challenges you didn't anticipate?
How easy has it been to run the company remotely? Have you ever needed to travel to Estonia to resolve an issue?
Looking back, would you do it again? What do you wish you had known before getting started?
I'd appreciate any lessons learned, gotchas, or advice from current or former e-residents.
- dgellow 3mo agoWhere are you located? Where will you administer the company from? That impacts your tax situation quite a lot. See https://www.e-resident.gov.ee/understanding-cross-border-taxes/ https://www.e-resident.gov.ee/understanding-cross-border-tax..., look for “Permanent Establishment”
- jvilalta 3mo agoI am in the US currently, would be managing initially from the US. I understand there will be US tax complications, but I can/would deal with those.
- ExpertAdvisor01 3mo agoThe worst thing you could do as an us citizen (I assume ) and resident is to incorporate outside of the US.
- jvilalta 3mo agoI can think of worse things myself.
- pyvpx 3mo agoThis is a terrible idea. please hire a professional with direct experience on these matters and not blog posts from influencers
- jvilalta 3mo agoAny suggestions or alternative ways to setup a EU company remotely in your extensive experience and wisdom?
- atlasunshrugged 3mo agoI saw this a lot when I ran BD for the program (I'm also an American) and its good you know there will be US tax complications but I would say that unless you expect to 1) have many EU customers and 2) working remotely globally and redomicile elsewhere so you are not considered US tax resident that it probably doesn't make more sense than using something like Stripe Atlas to just set up an LLC or C-Corp
- jvilalta 3mo agoThe point is serving EU customers as a EU company yes.
- Gys 3mo agoUnless you have some specific reason for being in the EU, I suggest you also look into Singapore.
- deleted 3mo ago[deleted]
- ttoinou 3mo agoI was surprised how amazing it is ? What do you wish you had known before getting started? Your yearly financial data is public, everyone will know your income / profit. And you will get spammed, your email will be public too. How easy has it been to run the company remotely? Great Have you ever needed to travel to Estonia to resolve an issue? Only visited once to open bank account LHV but I closed it since then and can use remote banking Looking back, would you do it again? Yes
- gdotdesign 3mo agoSame experience for me, it's been great! I never needed to visit since I could use Wise for banking. The only thing is that surprised me was the tax rate, when I created my Company the advertised rate was 20/80 but in reality it was ~25/75 and it increased since.
- m00dy 3mo agoWise is not a bank.
- dgellow 3mo agoWise isn't a bank but you can use Wise for banking operations (i.e you get bank accounts)
- atlasunshrugged 3mo agoYes, it was stable for a long time but has been changing mainly due to factors associated with the war in Ukraine (spikes in inflation, especially related to energy prices as well as a need for increased defense spending)
- poly2it 3mo agoQuestion: are OÜs particularly beneficial even for non-Estonians (EU), and in what way?
- jvilalta 3mo agoI can't speak about all EU countries, but the one country I looked into (Spain), I couldn't find a way to do everything remotely. It required being physically present for some things, so that's why I am asking about whether Estonia actually delivers IRL on the e part of e-residence.
- m00dy 3mo agoI think banking is still the biggest issue if you’re not an Estonian resident. Honestly, I’d avoid the EU in general. There are only about four or five good places to set up a company and stay connected to the financial system: the US, especially Wyoming or Delaware, Dubai, Singapore, and Hong Kong.
- Ringz 3mo agoWhy not London/UK?
- piltdownman 3mo agoLondon post-Brexit is problematic outside of the legacy stuff in City of London, but why not Dublin?
- leitasat 3mo agoIt was great until they turned racists and stopped me from using the service because of my nationality (Russia), even though neither me or the business had anything to do with Russia.
- Etheryte 3mo agorussian is not a race.
- fractallyte 3mo ago[flagged]
- m00dy 3mo ago[flagged]
- 8note 3mo agoare you a russian speaking estonian? or russian citizen?
- leitasat 3mo agoRussian citizen living abroad
- jwr 3mo agoFor better or worse, our world has the concept of "citizenship". It is not ideal, but it is what we have settled on. You reap the benefits of your passport (citizenship), but you also bear responsibilities. It is possible to switch nationalities, and I would heartily encourage anyone whose conscience has trouble accepting what their country does to do so.
- rendx 3mo agoI sympathize with all Russian citizens living abroad. While citizenship is something you can get out of, it is a long process and circumstances may not easily allow it. I don't think it's fair to discriminate against Russian citizens without hearing their story, even the ones still living in Russia, for actions taken by their rogue government. Do US Americans really want to be held individually accountable for everything Trump does or will do? I understand how comments like yours and other sibling comments will generate feelings of being treated unfairly: We do not choose our birth country. We do not know the individual's actions, we do not know their political stance, and it is not racist but still discriminatory to use their nationality against them. They're already punished enough by being associated with their government. That's at least how I see it. Then again, it is probably due to EU wide legislation, so not something Estonia can do much about even if they wanted to. I hope they find emotional support to detach their individuality from how Russians (and Ukrainians!) are treated in general in the current dynamics. It's not their fault as individual, and I'm sorry that they became victims.
- deleted 3mo ago[deleted]
- mhog_hn 3mo agoAny tips for a 2 person European company. One founder based in Amsterdam, the other in London. We are close to setting things up, some input from other founders would be great
- ExpertAdvisor01 3mo agoProbably a UK limited liability partnership would be an option . But you have to investigate how the Dutch will treat it . You could apply for a advance tax ruling with the Dutch tax authorities before doing anything
- HatchedLake721 3mo agoWhy LLP over Ltd?
- ExpertAdvisor01 3mo agoBecause it's transparent so you pay income tax ( which is lower than corp+dividend taxes especially at lower incomes ) . Later on when you scale, you can convert the LLP into an LTD. Also you might avoid exit taxes as it is an partnership , if you move between countries. Also there is basically no information in the post besides 2 founders in different countries.
- euph0ria 3mo agoIncorporate in one of the two countries. If you're serving EU, with GDPR it might be easier to do Netherlands instead of the UK.
- Gys 3mo agoPlease beware: From: https://learn.e-resident.gov.ee/hc/en-gb/articles/360000721597-Taxation-for-businesses-how-it-works https://learn.e-resident.gov.ee/hc/en-gb/articles/3600007215... > Corporate tax residency > However, some countries have different rules for deciding if a company is tax resident. It is common that, in addition to the place of incorporation, the place of effective management can trigger tax residence. If you run your company from a country with regulations like this, then the company may end up having dual tax residence. This happens when two states believe that the company is tax resident in their jurisdiction and will want to tax the company’s profits. This 'It is common that [...] the place of effective management can trigger tax residence' is indeed common.
- jocaal 3mo agoAlso estonian law doesn't recognize trusts, so if you want to save your assets for your children that's a problem.
- ExpertAdvisor01 3mo agoYou mostly use foundations for that purpose in civil law countries (which are also not part of the hague trust convention )
- victorbjorklund 3mo agoI assume we are taking about a foreign trust and not an Estonian one. In what regard? When it comes to money laundering? Profit distributions?
- jocaal 3mo agoNo, I was under the impression that foundations must be established with a non profit goal in mind. I thought you cannot just give beneficiaries cash. I see I was mistaken and that private foundations allow you to treat the structure the same as a trust fund.
- logifail 3mo agoHence the executives/boardmembers-all-fly-to-some-island (Jersey is the one in my mind), have board meeting in the airport, sign the papers, and all fly home? Company stays "in" Jersey, none of the humans need to live there?
- wayneshng 3mo agoIt has been a great experience. Setting up the company was online, and it took 3 days, including the time spent to change the name because the initial name was rejected. You can use Wise for banking, but LHV is also visible but there is an account limit if you don’t live there. Accounting is easy, but you will need an accountant for tax reporting if you have a VAT ID. My accountant charges me 60 euros per month and does an amazing job.
- ExpertAdvisor01 3mo agoUseless + overhyped . Company will end up as tax resident from the country where it is managed & controlled . If there is an DTA the tie breaker rule applies and the country from where it is managed & controlled gets the right to tax . Also you get to enjoy bureaucracy+ dual accounting in both countries . If there is no DTA it can lead to double taxation . And if you don't have a fixed place of management/business+ tax residency (basically nomading) a US LLC disregarded for tax purposes is a much better fit .
- edoceo 3mo agoUsername checks out.
- penpendian 3mo agoThere is no cake will drop from sky, and if there is, well it came with gravity
- sscaryterry 3mo agoThis 100%. Hire a (good) accountant.
- hakanderyal 3mo agoUK, USA and Singapore are the popular choices for this. UK is simple and cheaper, Singapore is a bit more expensive. I don’t see a reason to go USA route unless you are seeking investment from there. I’m using UK myself. It takes a few forms and half a day to get a working Wise/Stripe account.
- Onavo 3mo agoFinally somebody who knows their stuff. I never understood why people preferred Estonian incorporation given that it's almost certainly more expensive and less convenient than the other options.
- atlasunshrugged 3mo agoI think the main reason is to have a business incorporated within the EU if that's relevant for the person. Delaware is great, and UK filled this role until Brexit but after that if you needed an EU incorporated company it was a massive pain basically everywhere except Estonia which was relatively cheap and everyone in the industry speaks English
- Onavo 3mo agoYour username is cool
- atlasunshrugged 3mo agoHa, thank you!
- jvilalta 3mo agoThis is indeed the main reason for the question, and for the reasons you mention.
- victorbjorklund 3mo agoIts for sure over hyped but its not useless. Its nice that you can reinvest the profits within the company and only pay taxes on distribution (if this works of course depends on where the owner is. But at least in Sweden it works).
- joshuaheard 3mo agoI switched to 1Password after the last one.
- wasting_time 3mo agoThe LastPass thread is over there -----> https://news.ycombinator.com/item?id=48671468 https://news.ycombinator.com/item?id=48671468 (you'd probably be downvoted anyway because of the insubstantial anecdote)
- joshuaheard 3mo agoThat's strange. My comment replied to a post I did not open or read. Must have been a bug or I was sleep-posting.
- forks 3mo agohttps://news.ycombinator.com/item?id=47500239 https://news.ycombinator.com/item?id=47500239
- atlasunshrugged 3mo agoIts been a few years but I ran BD for the program in '19-'20 -- I would say that people underestimate the difficulty in shutting down the company if that needs to happen, sometimes getting access to a proper bank account can be annoying, and don't always understand the tax implications (ex. if I was resident in Germany, all my customers were in Germany, but I tried to run everything through this Estonian biz and pay taxes only there, that could very well cause you lots of issues/complications). Also, shameless plug for people broadly interested in the country of Estonia and how it became a leader in e-gov/tech only a generation after independence from the Soviet Union, I wrote a book about it after being curious myself! https://www.rebootinganation.com/ https://www.rebootinganation.com/
- pixel_popping 3mo agoFor SaaS business, HK is definitely the best, 0 taxes, very low maintenance requirement, Stripe accepted, solid banking system.
- jettfu 3mo ago[flagged]