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Become Estonia’s e-resident

e-estonia.com

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Re: Become Estonia’s e-resident

#71

Post by agilebyte »

markvdb wrote: post #67
memnips wrote: post #34

Is there a tax advantage here? Estonia's tax system is supposed to be very simple, and allows for a 0% corporate income tax on all profits that are re-invested into the corporation (source: http://www.incorporate.ee/why-estonia/low-tax-jurisdiction ). Does this mean I can form a corporate entity in Estonia and gain all the tax benefits without any physical presence?

You will have to be very very careful about making Estonia the real physical center of the commercial activities deployed by your company. If you don't - let's say you're Dutch, living in Holland and consulting mostly for Dutch clients, then forget it. But let's say you're Dutch, you have a girlfriend in Estonia, you work from there a week every month, and you have clients in several EU countries, with NL only one of…

Or you and your girlfriend are both directors and you meet at least 4 times (from what I've read) there to discuss company business. Hey, the company can pay for the trip from Netherlands too.

Re: Become Estonia’s e-resident

#73

Post by daveloyall »

anemic wrote: post #68
tvanantwerp wrote: post #4

"To apply for one, you need to make visit a Police and Border Guard office in Estonia – there you need to submit an application and provide biometrical data (your facial image and fingerprints) for background check."

are the facial image and fingerprints only used for background check, are they stored (and for how long) and are they shared with different entities, such as police or foreign governments?

Background check?

Wouldn't this kind of ID be granted to anyone, so long as they are who they say they are, so long as their identity is vetted.

I think selectively doling out benefits or rights is the job of a separate system. (And if everyone has one of these IDs, the design of the second system could be simpler than it might be otherwise. I think.)

Re: Become Estonia’s e-resident

#74

Post by imeikas »

agilebyte wrote: post #49
plainOldText wrote: post #27

I believe this has huge implications for someone who would want to operate a company from a business friendly country, as opposed to say a country where the individual is located physically but is otherwise corrupt or war ridden. My understanding is that this status allows you to form companies, open bank accounts and sign binding documents just like someone living in Estonia. And that is pretty impressive. Add crypt…

It is to use Estonia's digital services and does not give you residency. Nothing stops you opening a company in Estonia now, but that does not mean you would only pay corporation taxes there (they are at 10% when distributed as dividends), your physical location plays a role too.

Dividends are taxed this year at 21%. And if I'm not mistaken tax rate is lowered to 20% next year, reinvested profit is not taxed.

Re: Become Estonia’s e-resident

#75

Post by irve »

anemic wrote: post #68
tvanantwerp wrote: post #4

"To apply for one, you need to make visit a Police and Border Guard office in Estonia – there you need to submit an application and provide biometrical data (your facial image and fingerprints) for background check."

are the facial image and fingerprints only used for background check, are they stored (and for how long) and are they shared with different entities, such as police or foreign governments?

they store it in citizen database. as of now they do not share the fingerprints with our regular police. the face they probably get.

I think that our local spy people have access to them (there was a theory about them managing our offshore database backups and therefore never asking for anything); if and how they share it is not disclosed.

foreign governments might get access through travel information agreements (biometric passports were a requirement for free travel to US) but I am not certain about those details.

Re: Become Estonia’s e-resident

#76

Post by agilebyte »

imeikas wrote: post #74
agilebyte wrote: post #49

Earlier quoted context omitted.

It is to use Estonia's digital services and does not give you residency. Nothing stops you opening a company in Estonia now, but that does not mean you would only pay corporation taxes there (they are at 10% when distributed as dividends), your physical location plays a role too.

Dividends are taxed this year at 21%. And if I'm not mistaken tax rate is lowered to 20% next year, reinvested profit is not taxed.

You are right, don't know where I got that 10% from.

Re: Become Estonia’s e-resident

#77

Post by markvdb »

agilebyte wrote: post #71
markvdb wrote: post #67

Earlier quoted context omitted.

You will have to be very very careful about making Estonia the real physical center of the commercial activities deployed by your company. If you don't - let's say you're Dutch, living in Holland and consulting mostly for Dutch clients, then forget it. But let's say you're Dutch, you have a girlfriend in Estonia, you work from there a week every month, and you have clients in several EU countries, with NL only one of…

Or you and your girlfriend are both directors and you meet at least 4 times (from what I've read) there to discuss company business. Hey, the company can pay for the trip from Netherlands too.

It's definitely not as simple as that. To get an idea of some complexities, just read the double taxation avoidance treaties between the two EU countries involved to start, and have a look at the EU posted workers directive http://ec.europa.eu/social/main.jsp?catId=471 .

Those should convince you that you need good fiscal advice and a somewhat conservative attitude when it comes to fiscal grey areas.

If you want to avoid paying a lot of taxes, build a multinational and set up tax avoidance schemes like the Double Irish with a Dutch sandwich. https://en.wikipedia.org/wiki/Double_Irish_arrangement . But hurry, because some of this might actually become a bit more difficult starting from next year...

Re: Become Estonia’s e-resident

#78

Post by ricardobeat »

markvdb wrote: post #67
memnips wrote: post #34

Is there a tax advantage here? Estonia's tax system is supposed to be very simple, and allows for a 0% corporate income tax on all profits that are re-invested into the corporation (source: http://www.incorporate.ee/why-estonia/low-tax-jurisdiction ). Does this mean I can form a corporate entity in Estonia and gain all the tax benefits without any physical presence?

You will have to be very very careful about making Estonia the real physical center of the commercial activities deployed by your company. If you don't - let's say you're Dutch, living in Holland and consulting mostly for Dutch clients, then forget it. But let's say you're Dutch, you have a girlfriend in Estonia, you work from there a week every month, and you have clients in several EU countries, with NL only one of…

Can you elaborate on why exactly that would be a problem?

Re: Become Estonia’s e-resident

#79

Post by mcv »

ikawe wrote: post #11

I was in Estonia two days ago. I just passed through on a whim as part of a European bicycle tour. I am embarrassed to admit, I knew very little about the country before being there. I was only there a week, so my impressions are addmittedly naive, but very positive. There was a lot of technology forward thinking - online voting, constitutional right to internet access, co-working spaces catering to young entrepreneu…

I've never been there, but from what I understand, they love folk music, and kids learn to program in primary school. Sounds like a wonderful country. Also the home of Skype. Not to be underestimated.

Re: Become Estonia’s e-resident

#80

Post by xmr »

memnips wrote: post #34

Is there a tax advantage here? Estonia's tax system is supposed to be very simple, and allows for a 0% corporate income tax on all profits that are re-invested into the corporation (source: http://www.incorporate.ee/why-estonia/low-tax-jurisdiction ). Does this mean I can form a corporate entity in Estonia and gain all the tax benefits without any physical presence?

TL;DR No.

You're likely to run into domestic Controlled Foreign Corporation rules. Basically if you or your family own a large portion of a foreign registered company and that company is taxed less than domestic tax rates, it'll be classed as actually residing in your home country for corporate tax purposes.

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