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The Ultimate Guide to Estonian E-residency, Banking and Taxes


The Ultimate Guide to Estonian E residency Banking and Taxes Nomad Gate Medium

Source: https://medium.com/nomad-gate/estonian-e...

In this extensive article I go into detail for why you might or might not want an Estonian e-residency, how it can make it really convenient to bank and run a business in Estonia, some basic tax implications, and lastly explaining the process of obtaining an e-residency.

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Why you might want to set up a business in Estonia:

Businesses registered in Estonia are by default considered to be tax resident in Estonia. If you are running the business from a different country where you are personally tax resident, please consult the relevant tax treaties to see if the company might be considered resident in your home country instead.

The tax burden in Estonia is far from the highest, but also not quite a tax haven either. The tax code is generally straight forward, with 20% flat tax on most stuff. That includes 20% income tax, 20% corporate tax on distributedprofits (meaning 0% on undistributed profits, see below), and 20% VAT. Note that there are social taxes totaling around 35% for employees and directors that perform their services within Estonia. As far as I have understood the social taxes will not apply to someone living outside of Estonia and not performing any actual work within Estonia.

Overall a medium tax burden, so if low tax is all you care about there are better options. If you care about cash-flow, easy day-to-day remote management in English and a generally business friendly environment, Estonia might be for you.

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