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I finally have my new E-Residency kit from Estonia

After a long time I decided to setup my startup in Estonia for several reasons, which I will explain later.

With the e-Residency card now in place and only a few months to launch Keepsy I can finally setup my startup with no hassle. I finally decided to use Xolo.io (Formlarly LeapIN). Everything seems to be simple and it allows you to go forward without getting stuck in the whole Tax and filing issues. I thought of Delaware but finding someone to do the taxing for you I think is so complicating. If your read about e-Residency and Estonia you'll see its so much easier. I live in Spain and what Estonians are doing is light years away from what we do here.

I'm curious to know how other people have setup their companies and what the'r recommendations are.

Regards

  1. 1

    What makes you choose Estonia over Delaware?

    1. 1

      Hi @amitsinghlive,

      In my case it was better Estonia over Delaware for these reasons,

      Pros

      • I live in Europe so from a tax point of view its going to be easier for me here.
      • Setting up an Estonian company is very easy
      • Management is fully remote and practically automatic.
      • Maintenance costs for an Estonian company are very low.
      • Taxes are really simple to understand.
      • If you reinvest into the company there are no taxes to pay.
      • Estonia is gradually getting a lot of hype and slowly growing as the tech country of Europe.
      • Important startups like Skype, Transferwise and Xolo started out in Estonia.
      • Great for solo Entrepreneurs.
      • Compliance with EU regulation.
      • Provides a VAT number.

      Cons

      • The USA still has a very good reputation to start an online business.
      1. 1

        Actually I also don't understand tax system of USA.
        I was looking to form a company outside India just because of removing restrictions of Stripe in India. Stripe is invite only payment service for Indian companies. They accept companies with good revenue.

        Will Estonia Company registration help me to register Stripe payment?

        1. 1

          Yes you can register Stripe, Paypal or others with Estonian company. I recommend you visit this website xolo.io. That is where I setup my company Keepsy.app

          1. 1

            Do we need to pay tax both in Estonia and in your Home country for the same earned revenue?

            1. 1

              Hi @amitsinghlive,

              It depends on the amount of revenue and if you reinvest it into your company and your residence. There are double taxation agreements. Here is the full list Estonian taxation agreements

              1. 1

                Xolo is bank? or we have to have to seperately apply for bank account to somewhere else?

                1. 1

                  Hi @amitsinghlive,

                  Xolo is not a bank. You can open a bank account with their partner in Germany when you signup, or you can choose to open a bank in Estonia or Transferwise. You have several options, but its all integrated, including Stripe or Paddle if you use them like in my case, Keepsy.app. It simplifies accounting.

  2. 1

    Hi @gperales,

    Thanks for your comments. It depends if you are living in Spain or spend more than 6 months outside Spain. It depends also if you reinvest or pay dividends. It also depends if you earn up to 50,000€ a year or 500,000€ a year. My startup is in the very early stages so I thought Estonian was the beat place with my situation. I wanted the setup and maintenance to be very easy, cheap and through the Internet. I did not want to viait a single office. In Estonia you don’t pay any tax until you start making money or rephrased another way, until you start takings funda put to pay your salary or as dividends. If you reinvest you don’t pay taxes. Taxes on your dividends is a flat 20%, simple and easy.

    I guess what I like about Estonia is that everything you read is easy to understand. There are no books or careers you have to waste time on to understand the tax system. Starting up in Estonia is so easy.

    I agree about Deleware, and filing taxes is crazy. Thats what turned me off. That doesnt mean if my Startup goea well that I decide to open oficies in the USA, London, Canary Islands, Japan and Australia, but for the moment Estonia is giving me a really good experience.

  3. 1

    Last year I was thinking about creating a company in Delaware with Stripe Atlas, because I was prototyping my product and I didn't want to start paying for the autonomo and I neither wanted to do all the paperwork. Mainly because the other co-founders lived in other places in Spain and we didn't want to travel to go to the notary. In the end, I created a Sociedad Civil Privada (S.C.P.) company, instead of a S.L. which was easier to setup.

    The problem I saw with Stripe Atlas is that as far as I understood if you receive money from a company you own outside Spain, you have to pay taxes in Spain of that payment, so you will be paying taxes in Estonia/Delaware and then pay taxes again in Spain. Maybe I didn't understand it right, and neither my accountant, but that's is what they told me.

    1. 1

      To clarify, with S.C.P you still have to pay for the autonomo (about 350€/month), but the paperwork is easier. I saw the answer you said that you don't have revenue yet, in that case, I probably will try to set the company in Estonia/Delaware, but as soon as I would have revenue I will set the company in Spain.

      1. 2

        Yeah, it makes sense when you start to make a lot of money. In Spain you only have to start declaring when you have more than 50,000€. Remember to differentiate between your taxes and company taxes. They are two separate things.

        Here are two interesting links,

        https://capitalista.ninja/abrir-empresa-en-estonia/

        https://lalibertadfinanciera.online/como-abrir-una-empresa-en-estonia-tramitar-e-residency-y-aspectos-fiscales-en-europa/#Que_te_debe_preocupar_a_nivel_fiscal_como_particular_al_tener_una_empresa_en_Estonia

  4. 1

    Hi! I am also from Spain.

    This topic also interest me.

    Have you check out the conditions of canary islands?

    Being inside Spain would do the whole thing easier.

    info: https://mentorday.es/tenerife-paraiso-startup/

    Please, keep the updates flowing with your experience ;)

    1. 1

      Hi @juanseb, how easy is it to setup in the Canary Islands? I haven’t found any information or services that are on the similar level to Xolo.io. The reason I chose Estonia, Xolo and Transferwise was for ease of use and fare pricing. I was interested in Delaware using Stipe and other services but for reason of cost and maintenance I decided thia was too complex. I really have not found anything as sinple as what is happening in Estonia. Of course I did decide to go this root at the stage that I am in at the moment. If things change and This startup starts prgreasing and so on, definetly I will considor other countries including Spain, but right now its just so complicated and taxes are so complex and high. Keepsy.app does not have customers of money coming in yet. At this stage setting up shop in Estonia is more than enough. I am curious to hear your opinions and others.

      Thanks

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