Any of you tried out the Estonian e-residency or business set up ? We need feedback.
Like many people among our community, I live in a developing country in Africa and Stripe, PayPal ...etc. are not yet accessible. I figured that I can join the Estonian e-residency movement and benefit from some advantages. Although, I don't have any feedback on the topic by anybody who's already went through the process. Is it easy ? Is it worth it ? Pros and Cons ? E-resident or Business set up ? ...etc. Every information on that topic is more than welcome guys. Please provide and share your feedback and information.
E-resident here, originally from the UK. Used to start my consultancy company Squarecat OÜ (https://squarecat.io) nearly two years ago, which we also use as a parent for our various personal SaaS projects.
I went down this path because I am a full-time digital nomad, and do not plan to return to the UK. Without a permanent address, and visiting the UK very rarely makes it difficult to set up and manage a company there.
There are plenty of blogs on the topic of setting up e-res and setting up the company. The process is straightforward, and takes a relatively short time. You just have to collect your ID card from an Estonian embassy somewhere.
Something that a lot of people get confused about is that e-residency DOES NOT CHANGE YOUR PERSONAL TAX LIABILITIES. Your company will be Estonian, and thus is potentially liable to Estonian corporate tax. Your personal tax residency doesn't change.
For example, Squarecat OÜ pays me a salary. Squarecat OÜ is liable for corporation tax on those 'distributed funds'. I am then liable to the UK Revenue & Customs for my personal income tax.
Hope this helps, let me know if you have any questions.
@jivingsct thanks mate for your very cool feedback. This leads me to understand that the only pros of going e-res in Estonia are to manage your entire company remotely. Taxes are still taxes and it's not about lowering the rates.
But again, you got a estonian passport or what ? What about social perks, like med, retirement ...etc. ?
Sorry, missed this reply.
Yep, taxes are still certain, and you have to figure that out based on your specific circumstances.
No social perks, no passport. I am not resident of Estonia, just e-resident. Likewise don't have to pay Estonian social tax either unless the business is operating within Estonia.
cc @jivings
Also commenting to be on the loop. I have been researching more about the e-residency and so far seems really promising
I would like to know about this as well.
I haven't yet come across anyone who has used it.
while e-residency sounds great yin theory you should always go for entities with a huge user base. it's like software. once you need eg tax consultants, specialized people, it can get expensive if your options are just a handful english speaking guys in estonia. the UK ltd is actually a really elegant and simple 'product' but because of the brexit things are unclear there
Don't look at this as an endorsement, but I want to provide some details so OP can make up their own mind.
€95/month is not that cheap.
How much is the yearly stuff like tax statement, etc.?
All included in the €95/m.
But nothing really happens yearly, VAT is calculated quarterly and everything else is sorted month by month.