Over the last few days I’ve been busy setting up my OÜ (Short for Osaühing which means “limited company”) in Estonia.
I’ve always been facinated by the technology and got to see it in action while setting up the company.
Here are some of the cool points I’ve noticed so far:
All paperwork and contracts are electronic. You just insert in your card reader, then ID card and sign the document. This is the best feature ever.
No need to worry about couriering documents and wasting paper. It’s more eco-friendly.
Not to mention, no need to worry about getting documents certified - public key cryptography rocks.
No fixed address no problems!
It’s awesome if you don’t have a fixed address but still have the means of making money through your company.
Banks traditionally don’t like dealing people without a fixed address.
Your banking options are: LHV (requires an in-person interview, however this is a real bank),
Also all communications can be handled online (managing my affairs in other countries though feels like a big tedious “clusterfuck”, and sometimes its not even possible).
You have a personal eesti.ee email address issued to yourself and also one for the company that you have registered. It’s gotta be better than GMAIL (I’ve had issues with GMAIL in the past). Not to mention it filters out spam.
Single Sign on
You can use the ID card to authenticate with many of the Estonian government websites or banking sites (yay for NOT remembering yet another password or shitty password policies).
The card is secured by two pins, one for logins, and one for signing.
Ease of doing business
I started the application for the company while I was not in Estonia - including signing some of the contracts (21st century style!). Setup for the company (assuming no trademarks or similar names), is done and entered into the registry within 24-48 hours.
Assuming no issues, EU business bank account set up within 1 week but you need to be in Tallinn for this (obviously for identity purposes).
Different people here have different circumstances, so consult your tax department website (or hire someone who understands it if you don’t want to do it yourself).
Also read up on double taxation treaties for your taxation country to see if you are taxed both by Estonia and your country before paying yourself a salary (opt for directors fee instead, and use business expenses).
Based in a European country with a high VAT rate
Estonia’s VAT rate is at 20%, however there many member states which charge a lot higher VAT.
Obviously, If your company is incorporated in Germany / France / Bulgaria / Austria / Cyprus / UK / Slovakia / Luxemburg - you should probably just keep with your company there as theres no benefit.
Digital Nomads / Long term slow travellers
If you’re a “digital nomad” (I hate that word) though, you could theoretically be almost tax free as travel expenses (flights, accomodation, Uber, taxi, and meals) are regarded as business expenses if you are in a city outside of your nominated “Home base”. Including flights to Estonia (as long as you don’t actually register as domicile there - however your e-Residency changes to a real residency). Co-working spaces? Also a business expense (but it should be anyway). I’ve read up on the travel expense claim a bit, and its basically unlimited so its very digital nomad friendly (as long as the company has funds).
So you do some Angel Investments?
Also, if you’re the investor type any money you inject into the Estonian economy by investments as that not taxed too. Great to boost startups. Or just leave it in your company any wait for that perfect investment. Finally someone gets it.
Now on to the fun part. This was the sole reason why I got into the program. I was more interested with the tech behind the scenes (implementing ID card login for websites).
When I’m a bit more free, I’ll be building some proof of concept stuff based on the Eesti-ID (maybe even find a way of tying it in with Blockstack or an easy way of generating a bitcoin wallet)
Last but not least, Brexit. For the brits who still want to remain part of the EU (at least business and financial wise), there’s a way to have a EURO bank account to shield yourself against the devaluing pound.
Estonia in General
- Cost of Living is quite similar to Chiang Mai. In fact apartment rents seem cheaper than Cebu in the Phillipines. In Tallinn, public transport is FREE if you decide to register as a resident.
- Startup friendly country
- Banks actually offer you free tea and coffee while waiting! (Seriously)
- Definitely more english than Chiang Mai
- Cheap alcohol! (I’m addicted to that estonian liqueur)
- Close to UK (for conferences, and meetups).
- Internet access is considered a human right (I love that). Also there is a lot of internet freedom as well.
- Similar weather to Vancouver, Canada but without the pricetag (Doesn’t get warmer than 20 degrees in Summer!)