Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Founders of estonian e-businesses – is it worth it?

news.ycombinator.com

Post reply on HN
Print view View original

131–140 of 141 posts

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#131

Post by mhitza »

alde wrote: post #87

Please read up on what a permanent establishment means from a tax perspective. Most countries tax laws, especially EUs unambiguously state that the Estonian company will be taxed as if it was a company in your primary residence country. The e-residence website repeats this many times, with many examples focusing on Germany. https://learn.e-resident.gov.ee/hc/en-gb/articles/3600025428... The whole e-residence thing on…

There are a handful of countries listed there but you expand the criteria to all EU countries, which is not the case.

I don't have the issues you're talking about, I pay corporate taxes in Estonia, and I pay income taxes in Romania.

I thought Germany was a well-known country that is incopatible with this model (curious how things will change with EU Inc), but asking an accountant in your home country of tax laws and double taxation treaties will be better than random internet people.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#132

Post by littlecranky67 »

KellyCriterion wrote: post #128
littlecranky67 wrote: post #121

Earlier quoted context omitted.

That articles refers to employees (Arbeitnehmer) which is something completely different.

Yes, and if you are a company owner, you usually have a contract between you and yourself? ( https://www.hensche.de/Rechtsanwalt_Arbeitsrecht_Handbuch_Ge... , "Geschäftsführeranstellungsvertrag") So OP has to clarify on both layers: natural person himself, legal entity, and the relation between them. And the result is affected by the questions OP raised?

If you are a shareholder director (“Gesellschaftergeschäftsführer”) you have a contract but are still treated as self employed for most laws. The 183days rule does not apply in that case.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#133

Post by punarinta »

ykonstant wrote: post #126
punarinta wrote: post #122

I was an e-resident for 10 years, had a company and paid all taxes, but this year they refused to prolong it due to my nationality. So, I don't recommend Estonia at all, they can easily screw you over at any time. :( Since I'm looking for a replacement atm, what's the best US state to register a simple and cheap LLC for a foreigner?

I am sorry, but under the current circumstances in the US, your second paragraph sounds like satire, and I actually laughed out loud.

Well, I did a small research and I couldn't find any cases of the US government discriminating foreign business owners by passport. There are several cases in the EU, but the US looks clear so far. Hence my interest in that location.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#134

Post by mhitza »

sivers wrote: post #33

Here's a newer post from a German who previously was a fan of the Estonian e-business, saying things changed for the worse in 2025: https://denationalize.me/emigrate/goodbye-estonia-how-a-popu...

That just seems like an ad for their LLC incorporating service.

Ok, road tabbaco alcool taxes have risen in Estonia in 2025. But wtf does that matter for an e-resident?! Or that there are going to be harder ways to "secretly distribute profits". But that's just tax avoidance and they are leading with these ideas on their blog?

2% tax on profits to support the military, and 2% extra on VAT is what changed in 2025 and important for e-Residents.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#136

Post by olieidel »

udl wrote: post #3
dsnr wrote: post #2

Not answering your question directly but accounting and taxes are a thing everywhere. EU rules make accounting for companies quite complicated. Focus on your business, open the smallest and simplest entity you can to validate your product before spending time and money optimizing or scaling things. That being said, I’m familiar with GmbHs in Germany and I would advise against going this route unless funding is availa…

Thank you! Yes, that's why I'm looking for a simpler and less bureaucratic alternative. I'm totally fine with general accounting and taxes. But I would be happy if there was an alternative somewhere where you don't have to go to a notary for every little change and don't necessarily need a tax advisor because you have to talk to five different tax offices. Germany really makes it more complicated than it needs to be.…

Haha, thanks for linking to my website! Happy to answer any questions.

Skimmed this thread and I'm quite surprised how few people are aware of the permanent establishment problem.

Quick primer on the permanent establishment problem: You would technically have to pay taxes for your company in the place you're living (not Estonia). For example, if you're living in Germany, your Estonian OÜ would technically have to file for German taxes, too, because it's being run from Germany and it now has a permanent establishment in Germany.

So, roughly speaking, the Estonian OÜ is only useful if:

- You are in a country which doesn't have a permanent establishment problem and maybe even offers tax benefits for foreign companies (e.g. the non-dom rules of Malta, Cyprus, etc.)

- You are in a country which doesn't have a permanent establishment problem because they don't crack down on foreign company ownership (e.g. most developing countries)

In all other countries, the Estonian OÜ is likely going to cause you many tax headaches in the long run. In practice, this means:

a) Your local tax authorities don't notice or don't understand, and you're still fine, even though you'd need to file for taxes;

b) Your local tax authorities crack down on you and you need to go looking for a very expensive international tax advisor versed in Estonian and your local tax law.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#137

Post by alde »

mhitza wrote: post #131
alde wrote: post #87

Please read up on what a permanent establishment means from a tax perspective. Most countries tax laws, especially EUs unambiguously state that the Estonian company will be taxed as if it was a company in your primary residence country. The e-residence website repeats this many times, with many examples focusing on Germany. https://learn.e-resident.gov.ee/hc/en-gb/articles/3600025428... The whole e-residence thing on…

There are a handful of countries listed there but you expand the criteria to all EU countries, which is not the case. I don't have the issues you're talking about, I pay corporate taxes in Estonia, and I pay income taxes in Romania. I thought Germany was a well-known country that is incopatible with this model (curious how things will change with EU Inc), but asking an accountant in your home country of tax laws and…

I hate to say it, but you don't have any issues mainly because the romanian tax office is just more relaxed than the german one.

> A company is considered tax resident in Romania if it has its ‘place of effective management’ (POEM) in Romania.

All EU countries have the same laws in this regard, as it is a precondition for joining the EU.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#138

Post by mhitza »

alde wrote: post #137
mhitza wrote: post #131

Earlier quoted context omitted.

There are a handful of countries listed there but you expand the criteria to all EU countries, which is not the case. I don't have the issues you're talking about, I pay corporate taxes in Estonia, and I pay income taxes in Romania. I thought Germany was a well-known country that is incopatible with this model (curious how things will change with EU Inc), but asking an accountant in your home country of tax laws and…

I hate to say it, but you don't have any issues mainly because the romanian tax office is just more relaxed than the german one. > A company is considered tax resident in Romania if it has its ‘place of effective management’ (POEM) in Romania. All EU countries have the same laws in this regard, as it is a precondition for joining the EU.

> but you don't have any issues mainly because the romanian tax office is just more relaxed than the german one.

I'd argue because I'm not a resident of those 2 EU countries out of 27. Hence my previous comment.

You can't take only place of effective management in account because double taxation treaties also kick in.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#139

Post by udl »

olieidel wrote: post #136
udl wrote: post #3

Earlier quoted context omitted.

Thank you! Yes, that's why I'm looking for a simpler and less bureaucratic alternative. I'm totally fine with general accounting and taxes. But I would be happy if there was an alternative somewhere where you don't have to go to a notary for every little change and don't necessarily need a tax advisor because you have to talk to five different tax offices. Germany really makes it more complicated than it needs to be.…

Haha, thanks for linking to my website! Happy to answer any questions. Skimmed this thread and I'm quite surprised how few people are aware of the permanent establishment problem. Quick primer on the permanent establishment problem: You would technically have to pay taxes for your company in the place you're living (not Estonia). For example, if you're living in Germany, your Estonian OÜ would technically have to fil…

Thanks for chiming in and also many many thanks for the great blog post :) Yes, I came to the same conclusion. It's a nice construct, but not for EU residents like me. So I guess I'll go for a german UG/GmbH or cancel the whole project at all.

Re: Ask HN: Founders of estonian e-businesses – is it worth it?

#140

Post by udl »

littlecranky67 wrote: post #47

You said you are from Germany but not where you are now. If you are still in Germany, forget it. Just because you incorporate outside of Germany does not exempt your from any taxes (and its beauraucracies) in Germany. That is, even with an estonian corporation, you will owe german corporate taxes (plural - one goes to the state one to the county - a.k.a. Körperschaftsteuer and Gewerbesteuer). That implies you will ha…

I still live in (and don't plan to change it) in Germany. So I guess the whole thing doesn't really work for me. The goal of the whole operation would have been to make bureaucracy easier, but that doesn't seem to work. So ... it's a no do, unfortunately.
Post reply on HN