Hi guys,
I'm an e-Resident for more than two years. Last year, I opened a company in Estonia remotely. This year in June, I moved to Tallinn, and besides being a UX design contractor, I build my own product. I curate a small community around it on Telegram and have some regular sales growing slowly.
From time to time, I see some e-Residency related questions. I'm here to answer all of them :)
Hi Jan,
How much does it cost in total to run the company there? (accounting and other paperwork, virtual office, local director, etc?)
The cheapest you can go is probably Xolo, and their pricing is pretty transparent. It works fine for a simple type of business, so definitely check it out. Unfortunately, that wasn't enough for me. When I considered them, they told me it would not work for any trading (crypto/stocks) or accepting Bitcoin payments. Now, you can accept BTC, but it will be immediately converted to EUR, which doesn't work for me.
So I had to find a regular accounting company (I'm pretty happy about them.) The pricing was/is as follow:
A few times, I needed something extra, e.g., help with registering my residence in Estonia, etc. In every case, it was ~120eur.
(Also, the mandatory shared capital is 2500eur, but you don't have to introduce it to the company until you want to pay yourself dividends or sell your business, so it's not an issue at the beginning.)
It really depends on your case, e.g., if you're paying VAT, need a virtual office, etc. With Xolo Go, you can even start invoicing people without having a company (no fixed fee, just 5% of your sales.)
When it comes to the director – do you really need it? If it's for tax purposes, it doesn't work anymore. You're the UBO (ultimate beneficial owner), and a hired board member will not do much. I don't have any. I own 100% of the company, and I'm the only board member.
Hello. this page is quite old but I would like to try my luck.
How did you manage to get a bank account for your business given the industry you are in? Thanks
No problem, my business and I are still alive :)
I'm not a regulated business, so I'm not holding customers' crypto, etc. The industry wasn't an issue.
I have Wise, Revolut (which is now an insured bank account!), ZEN and I almost opened an account in LHV but resigned since I didn't see benefits. I still mainly use Wise, and I love it.
What do you want to know? If you have some more specific questions, I'm happy to chat. You can ask here, or find me on Telegram @janklosowski
Thanks for the AMA :) This may be a stupid question, as I really suck at understanding legal shit, but here we go:
From what I understand, I will usually need to pay tax 2 times, once "as a company" and once "as a person".
With the Estonia setup, are both of these covered, or will I still need to register as a citizen somewhere else and pay personal tax there? I'm a digital nomad (and a contractor like you), so I don't really have a fixed country of residency, but it still feels weird to be considered a resident of Estonia even though I never set foot in it.
If you are personally registered in Estonia, how do you handle stuff like healthcare?
Many topics intermingle here:
TLDR; I decided to move to Estonia and spend +183 days in a year here to have it all cleaned up without tricks and hassle.
Wow thanks so much for that huge answer first of all, I've been struggling to put all these pieces together for days so this is huge!
Got a few follow-up questions:
Do you happen to know any accountants or tax lawyers that can handle this kind of stuff? I tried a ton and all of them had no idea how to handle the whole nomad thing :p
I mostly described how I do this. People are doing tricks, e.g., they pay themselves as contactors, use other companies as proxies, etc. It may work, and you can pay very little or no tax, but it also brings a risk that your tax authority will not like it. In addition, there are so-called CFC regulations and other stuff that may trigger some questions. You also need to take care of health insurance yourself. The least suspicious setup is always if you have some tax residency, and you pay some tax there.
Hi Jan,
Thanks for opening this discussion. I am working with Xolo to set up my company. Do you have any suggestions for legal services in Estonia?
Thanks,
Luis
Hi Luis,
If Xolo works for you, it's great. They can navigate you with some more complex needs if you have them. I couldn't work with them since I have a very crypto-oriented business, and, e.g., accepting and keeping crypto on my balance wasn't something they're open to working with. Do you have any specific questions or doubts?
Hi,
Thanks for getting back to me! Xolo looks great but I'm thinking that legal services is really important to establish contracts or let's say I want to take some investors and need to update the articles of association, establish a shareholder agreement etc... I saw a number of firms listed in the e-residence marketplace so I don't think it will be an issue but just wanted to know if you had any tips.
All I can say is that I personally use this company, and they definitely do all types of things you mentioned. The good thing about Estonia is that the law here is easier to interpret and apply than in other EU countries, so you most likely have fewer chances to fail with the wrong company.
Thank you for the recommendation Jan! I really appreciate it!
If you want to contact them, tell them it was my recommendation. I have no affiliation, but it would be nice if they know I'm a happy client, haha.