Here's what I've seen. First you’ll need a service provider (you can’t really avoid it) we tried grouhub,Manuel the guy was very kind. 500€ for the incorporation and he referred us to get the bank account . On the other hand, don’t incorporate too early. If you’re still validating, you’re just paying overhead for nothing(180€/month).
On initial capital: you can set it at €10k as it helps if you plan to structure/share ownership more seriously later, but plenty of people start smaller and adjust when needed.
Ask HN: Founders of estonian e-businesses – is it worth it?
41–50 of 141 posts
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#42It is mentioned a bit in other comments: be aware that in the country where you live, the tax authorities can argue that your 100% owned company in country X is managed by you. This means it is taxable in your country. It is then up to you to counter their point of view…
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#43Earlier quoted context omitted.
I've considered it as a Spanish resident, but don't you have to live six months there to be considered a fiscal resident? Are people regularly operating them from outside Estonia?
(Not a tax professional so don't take my word for it) But I think you're talking about individual fiscal residency. A company you create can technically not be resident where you live so long as you can demonstrate that the principal activities of the company do not take place where you live. So with Spain, if a decent percent of your customers are Spanish and you're the only member of the company, then Spain would h…
I was discussing similar topics with a lawyer once over some beers.
Basically it would be best if you have no customers from Spain or country of your residence.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#44It is mentioned a bit in other comments: be aware that in the country where you live, the tax authorities can argue that your 100% owned company in country X is managed by you. This means it is taxable in your country. It is then up to you to counter their point of view…
And they wouldn't be wrong.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#45What are you comparing it to in Germany? Have you tried services like https://www.firma.de that don't make it much more complicated than the Estonian option these days. I have not tried it myself, but I have friends who had good experiences with it.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#46It is mentioned a bit in other comments: be aware that in the country where you live, the tax authorities can argue that your 100% owned company in country X is managed by you. This means it is taxable in your country. It is then up to you to counter their point of view…
And they wouldn't be wrong.
Except it does not work that way in the US, you can freely incorporate in any state without worrying about this kind of tax drama. The EU really needs to improve the integration of their single market, as this is precisely the kind of barrier preventing people from exploring what other EU states have to offer.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#47You 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 have to do the same tax paperwork as with a german GmbH and file them official with the tax authorities (Steuererklärungen, Umsatzsteuerjahresabschluss) and the Bundesanzeiger (Jahresabschlussbilanz). Nothing gets easier with that setup.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#48You 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…
This is the best answer. Internally, we have to deal with bureaucracies of every country for employment and residencies. Separately.
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#49Here's what I've seen. First you’ll need a service provider (you can’t really avoid it) we tried grouhub,Manuel the guy was very kind. 500€ for the incorporation and he referred us to get the bank account . On the other hand, don’t incorporate too early. If you’re still validating, you’re just paying overhead for nothing(180€/month). On initial capital: you can set it at €10k as it helps if you plan to structure/shar…
You don't need a service provider other than a "contact person".
The actual minimal cost of getting e-residency is a one time €150 state fee (I guess you have to renew the physical card every 5 years, which is €150 again?). If you also want to incorporate an Estonian company (which you probably do in this context here), then the registration for this is a €265 one time state fee.
There are no other mandatory fees, except you have to find a "contact person" who's responsible for receiving official government communication on behalf of your company (don't worry, I have never gotten any physical communication from any gov agencies during my 10 years of having a company here so this "contact person" won't actually be doing anything and is just a formality). After a 3 minute google search, this service can be had for €7 / month.
If you don't want to file taxes yourself then you'd also need to hire a local accounting firm. That'll start from somewhere around €50/month for a micro-SaaS. If you really want to, you can file taxes yourself for free but.. your call if your time spent learning the Estonian tax code is worth the saved money..
Re: Ask HN: Founders of estonian e-businesses – is it worth it?
#50Oh there will be a lot of issues in the future because Germany says thst your company is in Germany because you work from there. So you have to do taxes in Estonia and in Germany. And prepare for a lot of tax issues if you dont have a good tax advisor.
>Germany says that your company is in Germany because you work from there. Forgive my ignorance, I have never really thought about this before and I may be missing something very obvious here. Isn't that kind of true , though? For instance, if I am a citizen of Japan, live there, and run my remote business from there, but the business that I run exclusively makes money from people in Portugal and Brazil, it would be…
Isn't that more or less how it works? You pay tax where you live, with the justification being, as you say, that you are benefitting from the social structure there?
The big country that is an exception is the US. Their citizens have to pay tax regardless of them being elsewhere, and the difference is dealt with via various taxation treaties. I imagine the justification is something like "we help our citizens everywhere, so they owe us tax".
> I'd be interested to hear how others see it. Like I said, I haven't really thought about this too much before, and may be missing something more fundamental and obvious.
The big thing that's missing is corporations. They are imaginary entities, with a bunch of rules about what they are allowed to do, how they pay tax, etc. Once you create a corporation (or several), you can move profits around according to various accounting rules, which are often disconnected from how ordinary people interact with an entity. Are you buying coffee from Starbucks on Oxford Street, or Starbucks UK, or Starbucks Luxembourg? Most people don't think about that when they buy a coffee, but the accountants do.
You can also change what kind of tax you are paying. If you have a company, you can pay yourself a salary or a dividend. It's still money either way, but depending on jurisdiction taxed differently.