
Ask HN: Anyone doing business using Estonian e-residency? - Crazyontap
Do you think it&#x27;s a viable solution for doing online business? How is that working out for you in general?
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jdietrich
Opening a UK limited company is at least as straightforward. Registering takes
a couple of hours, it can be done entirely online and the fee is £12 ($15).
You don't need to be a UK resident. You do need a registered office in the UK,
but a company formation agent will provide one for about £20 ($26) per year.
All your tax returns can be filed entirely online and HMRC provide a very
helpful tax advice service. It really is fantastically simple.

The obvious advantage to registering in Estonia would be the certainty of
continued access to the European Single Market. We're still not entirely sure
how Brexit will pan out.

[https://www.gov.uk/limited-company-formation](https://www.gov.uk/limited-
company-formation)

[https://www.gov.uk/corporation-tax](https://www.gov.uk/corporation-tax)

Another option well worth considering is Stripe Atlas. It's not the cheapest
way to start a corporation, but Stripe provide a huge amount of added value.

[https://stripe.com/atlas](https://stripe.com/atlas)

~~~
mkbkn
Wow. That's a lot cheaper than opening a company in Estonia.

How about the banking system for companies opened by non-residents? Can one
get a multi-currency bank account easily?

~~~
joeseeder
Multi currency in UK with regular banks is dead. Some time ago, you were able
to have USD, EUR and GBP , now they don't open new ones easily.

Alternatives likes Transferwise or Revolut would be the norm for operating
across different currencies.

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sparkling
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.

~~~
jonstewart
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
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.

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throwaway68373
Seriously guys, consult an accountant, a tax lawyer or just someone who could
have at least a clue what you are trying to do. There are reasons to
incorporate companies that are not in your place of residence, for example:
vat registration and to have a "front-door" in that country for selling to the
public, for procurement, for legal reasons (e.g. if you sell products in the
EU, you need to have an EU contact address listed on the product) etc.
International taxation is not easy and nobody will explain to you the problems
here but there will be for sure problems. If you want to do it right, you
usually pay what you saved in registration to the accountant instead. And no,
you won't save any tax. Let me be clear, you won't save any tax! If you do,
it's either called tax avoidance (punishable in many countries!) or you are an
international company that already has a tax accountant/lawyer to structure
things properly, has substance in those countries and will for sure not ask
questions here.

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jwr
I considered it for my SaaS business. But at the moment my business is based
in Poland, so moving to Estonia doesn't change things much (I still can't
economically sell to individuals within the EU because of idiotic VAT
regulations). I chose to remain in Poland for the time being. On the plus
side: low taxes, EU law, first patent troll doesn't bankrupt my business. On
the minus side: Stripe continues to ignore Poland, so I have to deal with
Braintree and this is a pain in oh so many ways, VAT MOSS is a disaster, and
we have the Cult of the Invoice.

~~~
jurghnaut
Can you elaborate on how does being in Poland protect you from patent trolls?

~~~
rjst01
I'm not the OP, but a company I worked for once had reason to set up a US
presence, but decided against it because once you have a US entity, patent
trolls have someone to sue in their jurisdiction.

~~~
jwr
Exactly. This is also one of the big reasons why Stripe Atlas is not
necessarily a good idea for companies from outside the US.

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dbanisimov
I am an e-resident and I used it to establish a business entity for my
startup. It works really well for my particular use case.

I am a Canadian resident, my co-founder is an Estonian resident (physical).
Both of these may change in the future and the intended market for our startup
is global. Estonia was chosen as a common ground with a minimal overhead -
it's easy and costs almost nothing.

Using government services with an ID-card was a breeze. For banking we use a
"physical" Estonian bank, once set up I have no problem accessing it online
either.

We didn't have any revenue the previous year, so cannot say much about
taxation story here. It gets more or less complicated depending on your
country of residence, but I don't think that having a business entity in
Estonia is fundamentally different from other EU countries here.

Slightly more personal and readable story, written by me:
[https://medium.com/e-residency-blog/how-to-launch-an-
estonia...](https://medium.com/e-residency-blog/how-to-launch-an-estonian-
startup-from-the-canadian-mountains-7ae95f1ff11)

~~~
taxguy
Corporate taxation is generally based on where the management and control of
the business is, not where it is incorporated, although the incorporation
jurisdiction is considered. If you had incorporated the Estonian company by
yourself without a partner and had been running it from Canada, the Estonian
company will be considered a Canadian company for tax purposes and required
for file a T2 corporate income tax return.

If you are still a Canadian resident, do remember to file T1134. If you own
50/50 in the business, you can perhaps argue that this is a foreign affiliate
only, and not a controlled foreign affiliate.

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cmews
In my experience a lot of freelancers are using it (especially when they like
to work in different countries). Personally I’m quite happy using it and it’s
a way better experience in comparison with the chamber of commerce in the
Netherlands when you start freelancing (had some bad experiences unfortunately
when they sold my data to shady companies which will target you with fake
invoices/bad deals/spamming). Another great feature is that you are in full
control how to pay yourself (salary/board member fee/dividends) which can have
serious tax advantages depending on your country’s tax system.

~~~
sparkling
How do you avoid that the company becomes a dutch tax resident if you manage
it from the Netherlands most of the time?

~~~
cmews
There are limitations like I cannot rent an office for longer than six months
and my company is registered in Estonia with an Estonian address (I use
leapin.eu which takes care of the accounting part). I get your point and when
you are selling physical products I cannot see how that would be possible.
However if you are doing location independent work like coding or designing it
is almost effortless to not become a tax resident.

Also the Dutch tax laws don’t care about the company as long as you pay the
personal income tax plus some employee insurance tax.

~~~
taxguy
In the Netherlands, a corporation is a resident for tax purposes if the
management and control of that company is in the Netherlands, regardless of
where that corporation is set up. There is no reference to address or office
location. I'd be wary of casually dismissing Dutch tax residency of an
"online" company--it is not as trivial as most think it is.

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samright
You can register a company with it in 1 hour. Then open a bank account with
Revolut Business and run it from anywhere in the world. It really depends on
what you want to use it for.

~~~
closeparen
How long did it take you figure out taxes/permits/liability for the Estonian
entity in countries where you and your customers live?

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dpq
Getting an Estonian bank account is nigh impossible. If you want to do
anything AdSense related, go with an Armenian account instead. Less hype, same
rules (~), totally worth it.

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demarq
Double taxation seems to be the main pain point looking at the comments. It
will help to google and see if your country has a tax treaty with estonia.

~~~
sparkling
Just "having" a treaty is not enough. Germany has a treaty with Estonia, but
it doesn't protect you. The Estonian company WILL become a german tax resident
if the company is being managed by a German citizen living in Germany 99% of
the time.

~~~
taxguy
This is correct, and this applies to many OECD countries. There's generally
little reason to set up a company overseas if you live in an OECD or EU
country; foreign affiliate tax rules will get you.

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wyldfire
Would it be easier to convince EU customers that your US (SaaS?) business is
trustworthy if you operated in Estonia?

~~~
ProblemFactory
I don't think it will make a difference - everyone is used to most internet
businesses being from and registered in the US.

In my experience of trying to sell a SaaS to small businesses, their only
location-based concern is about where the data is hosted and if we are GDPR
compliant. If you can offer hosting in some EU AWS or Google Cloud region that
will be much more useful.

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max_
I got my E-residency last year & find it kind of useless.

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freedomben
What have you tried doing with it?

~~~
max_
I registered my Software Developer company as an Estonian ÖU

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xchaotic
In most cases that setup does not absolve you from tax obligations where you
live. I can see a benefit in setting up a business or branch in EU in general,
if you have customers in EU. Otherwise why Estonia specifically?

~~~
techsupporter
> Otherwise why Estonia specifically?

Because the Estonian government is fairly unique in that it will issue an
electronic identification card to anyone who requests it and passes a
background check, permitting that person--regardless of nationality--to use
most Estonian government services, like business registration and tax filing,
from anywhere.

[https://e-resident.gov.ee/](https://e-resident.gov.ee/)

~~~
phragomax
Sovereignty as a service.

~~~
techsupporter
I suppose, but only in the same sense as governments around the world tend to
have mechanisms for non-residents and non-citizens to transact business or own
property. An Estonian identity certificate doesn't, on its own, allow someone
to enter Estonia or live or work there. That still requires citizenship of
Estonia, the European Union, or meeting other requirements.

------
blunte
I too have been curious, and I haven't seen anything beyond "nifty factor" to
compel me to set it up.

In most cases it won't positively benefit people in terms of taxation.

However, it might perhaps be useful for people coming from countries that are
looked down upon by some significant EU countries. In that case, having an
Estonia registration might increase the credibility of the business from an
initial (and sometimes important) external view.

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gumby
I set up a company and bank account a couple of months ago. It was very easy.

We are in development so don't have any customers yet, so I can't tell you how
taxes etc will be but I can tell you the process of dealing with the .ee
government so far is paradise compared to the US process.

~~~
Inquisitiveone
Would you say it might work for a consulting and IT services business? did you
experience any hidden costs, thanks

~~~
gumby
If you live in the EU it's not clear what benefit there might be, and if
you're a consultant there might be even less.

This doesn't save any taxes, and isn't a strategy to do so. The costs
themselves are't that great: a few hundred Euro.

The reasons we did were the following:

\- Ease of doing business with clients and vendors in other EU countries: we
have an EU bank account in Euros, can generate all the right VAT paperwork
etc. Not huge, but for some businesses critical. We also have a US subsidiary
in Delaware and a couple of state registrations because that is how you employ
people in the US. Ditto for a third country where one of the founders is
moving.

\- VCs are increasingly comfortable with overseas-registered countries, at
least ones not in tax havens. Ten years ago this would have been seen as
weird. I've always previously incorporated in Delaware where I've never set
foot so this isn't a big deal.

\- Our lawyer (!!!) in SV suggested we officially HQ the company overseas (I
already had an e-residency so we used Estonia). He said as the founding team
was all foreigners (though some in the Valley for decades), it was a good
hedge against unforeseen changes in the federal government's attitude towards
foreigners. TTTT I would have considered it wide-eyed raving except this
lawyer has been working at a big law firm in the valley, for 30 years. But
what the hell, it's so easy to do these days why not.

Not everything you need is in English but tbh I don't interact with Estonia
any more than I interact with Delaware and this has never been a problem.

~~~
Inquisitiveone
This would be more of a family business, nothing special really, would you
recomend a place where to get the right info, if you were in touch with any of
those companies, dont want to trouble you with the info :) thanks

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dandare
It may not be important for your use case, but Stripe will not work with
Estonian company. [https://stripe.com/global](https://stripe.com/global)

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alan_wade
Would this work as a workaround for creating a Stripe account, if I'm living
in a country not supported by Atlas?

~~~
dessant
Stripe does not seem to support Estonia.

[https://stripe.com/global](https://stripe.com/global)

