In Northern Europe, a little nation called Estonia. With only 1.3 million citizens, Estonia is one of the smallest nations in the European Union, Eurozone, NATO, OECD, and Schengen. Despite this, Estonia is the industry leader in digital control and is the originator of Digital 5. In December 2014, e-Residency, a novel idea, was introduced to Estonia. The e-Residency scheme will be advantageous to freelancers, company owners, foreign partners, and other non-residents connected to Estonia primarily in terms of convenience of living and conducting business. Starting a business, expanding your business, making investments, or studying in the European Union is possible with e-Residency in Estonia.
FIRST LOOK AT DOING BUSINESS IN ESTONIA WITH E-RESIDENCY
- An entirely online process for forming and managing businesses
- From anywhere in the world, you can start and run a business
- Document signatures and verifications in digital form (contracts, annual reports)
- Signed documents are encrypted and transmitted securely
- Bank transactions in Estonia through online banking
On the Internet and in the labour market, Estonia can maintain a transparent and reliable business environment through general access to information about Estonian companies. In addition, basic financial statements and ownership information are available to the public.
E-RESIDENCY: WHO BENEFITS?
- Digital Nomad:
- While traveling, you can start a paperless business.
- Freelancer:
- Build an European Single Market-accessible company.
- Start-up Founder:
- Take advantage of the EU start-up funding and clientele to grow your business.
- Digital Entrepreneur:
- Without unnecessary bureaucracy or personal presence, enter the European Single Market.
For a digital entrepreneur, location independence is an indisputable advantage of e-Residency. You can operate your business 100% remotely from anywhere in the world, and you won’t have to establish your company again if you move abroad at any time.
Europe’s vast market will provide new opportunities for your company to grow. The resident e-card will enable you to register a company in the EU without having to physically attend the registration process. Paying online with providers such as PayPal is now possible without appointing a local director.
It has never been easier to develop an online business using the software on your computer. Send digital documents by signing, authenticating, encrypting, and signing. You can also file your tax declaration online. As a result, you will now be able to access the European Single Market and its cross-border financial services.
Embrace globalization now. Building connections with service providers will be easier through online collaboration with e-Residents in over 170 countries. Your company will be able to grow in limitless ways thanks to the global community of e-Residents.
- Digital Nomad:
What is the process for applying for e-Residency?
E-Residency in Estonia can be applied for online on its official website.
Is the e-Resident card valid for travel/living in the EU?
Sadly, no. Unless you are a citizen of the European Union, travel to Estonia or within the EU does not require a visa for electronic residents. e-Residency cards cannot serve as visas for travel since they do not contain photos. E-Residency is not a replacement or a way to work or stay in Estonia or the EU.
Does the e-Resident card allow me to open a bank account?
Applicants residing in Estonia, with employees who reside in Estonia, or carrying out financial activities in Estonia may be eligible for opening an account at a bank in Estonia. Visit this page to learn more.
Could you please let me know when I will receive my e-Residency card? Does anyone have the ability to pick up my card on my behalf?
As a rule, the entire process from application to picking e-Resident card up takes from 4 to 6 weeks and only the applicant can collect it. Alternatively, you can find the Estonian Embassy or Consulate in the country where you are. Upon receiving your card, you will have to pick it up within six months. A fingerprint will be required for authentication and verification of your identity in order to receive your e-Residency card. Neither the Estonian Embassy nor Consulate can provide an e-Residency kit to the other person.
Is it necessary for an e-resident to pay taxes in Estonia?
It is not necessary. You are not a tax resident of Estonia just because you have an electronic residency. If you are a tax resident in a country, you must pay personal income tax there regardless of your e-resident status. Understanding the difference between e-Residency and Estonian residency is essential. In contrast to an e-Residency, an Estonian residency is a physical status with social obligations and benefits.
What is the process for declaring taxes with the e-Residency card?
Due to Estonia's e-services, e-residency can make paying taxes more accessible despite the complexity of international taxation. It will be possible for the e-resident to declare all taxes online if there is an obligation to pay corporate tax in Estonia.
What is the Estonian corporate income tax calculation?
A monthly income tax calculation in Estonia is carried out after distribution of profits (such as dividend payments). It is estimated that the corporate income tax rate in 2020 will be 20/80. A regular dividend payment is taxed at a lower rate of 14/86. The additional income tax of 7% is withheld from dividends paid to individuals with a reduced tax rate. Tax rates are reduced for resident companies to 14/86 (16%): The resident company pays income taxes on one third of the profits distributed in 2018. The resident company will pay income tax on a third of the profits distributed in 2018 and 2019. E-residents with companies in Estonia will also have to pay 20% of income tax on Board Members' fees in addition to corporate income tax.
WHAT IS THE ELIGIBILITY TO BECOME AN E-RESIDENT?
The following criteria must be met to qualify for e-Residency in Estonia: Estonian electronic services are of reasonable interest. A foreigner without a residence permit in Estonia or an Estonian citizen.
