Welcome To The Digital Nation

You are a freelancer or consultant, a digital nomad, a startup company, the owner of an existing business, or a digital entrepreneur - in almost any industry and from anywhere in the world, basically, then - becoming an Estonian e-resident might be something for you.

It doesn't matter whether you are new to entrepreneurship or already have experience in starting a business.

At some point in your business venture and usually for legal and tax reasons, you need to register your company as its own legal entity somewhere. Typically, you do this in your country of residence, which is in most cases also your country of citizenship.

This registration process normally involves a good deal of paperwork and bureaucratic hurdles to overcome. Not to mention all the costs and the required share capital that have to be paid.

Depending on where you consider registering your company, think of the limitations you may face due to certain given political or financial restrictions, e.g. you might not have access to payment providers like PayPal, which would make it harder or even impossible for you to receive payments from your customers.

Once your company is up and running, you constantly need to deal with administration, taxes, reporting, compliance. When you're starting out as a solopreneur, all this stuff eats up your precious time that you could otherwise use to create value for your customers and work on growing your business.

Now imagine you could get all of this much easier, quicker, entirely online, and on top of that all the accounting and reporting work will also be done for you! How is that? Imagine all the precious time you would free up to invest in your business instead!

Enter the Estonian e-Residency.

Becoming an e-resident and registering your company in Estonia enables you to do all of this.

Be location-independent and start your paperless company from anywhere, travel and manage your business remotely, or even move abroad without the need to re-establish your company.

Enter new markets and accept online payments through PayPal with your EU-based company.

Connect with expert service providers for any kind of support and resources that your business might need.

Network with like-minded entrepreneurs all over the world - remember, there are already more than 100,000 of us.

Last but not least, you can benefit from Estonia’s unique corporate income tax system where there is no tax on retained and reinvested profits. In other words, as long as the profits that your company earns are being used and reinvested in your company, those profits are not subject to tax.

The Estonian corporate income tax is deferred from the moment of earning to the moment of their distribution, which means that only when profits are distributed to shareholders as dividends, the corporate income tax of 20% is triggered.

Your application for the Estonian e-Residency is quick and easy, and obviously done completely online in a few steps - except for one important detail, which in my opinion is also the only downside of the whole application process.

If you are granted e-Residency, you need to pick up your e-Residency kit, which is your digital identity card and a card reader, in person at an Estonian embassy abroad or directly in Estonia. Maybe this will change at some point in the future, let’s see.

First, you want to prepare all the required information. You need to think about a statement of your main motivation to become an e-resident and a description of your business activity. You also need an up-to-date CV, your personal details, a copy of your identity document, a passport-style digital photo, and a credit card to pay your application fee.

When you are ready, you then visit the application website and create an account by using your email.

Next, you go through all the pages and complete the forms with the information and data you prepared. One very important detail in the process is the selection of the pick-up location. This is where you plan to pick up your new e-Residency digital ID card.

There are currently almost 50 pick-up locations available worldwide. Make sure you select a location where you can travel to. E-Residency does not give you any right to enter another country just because you have to pick up your e-Residency kit.

Once you have completed the forms and are ready to submit your application, proceed to the payment of the state fee, which is around 100 to 130 Euro, depending on your chosen pick-up location, and finally submit your application.

After submitting your application, the review process by the Estonian Police and Border Guard Board and, if you're granted e-Residency, the delivery of your e-Residency card to your chosen pick-up location takes about 1 to 2 months in total. You will get notified by email.

If granted e-Residency, you will be invited to collect your e-Residency kit at the location you selected in the application process. You need to bring your identity document with you that you used in your application. At the Estonian embassy your fingerprints will be collected.

Once you picked up your card, you want to follow the provided instructions to verify the card's activation and to install the required card software on your computer.

Now you are ready to use your new digital identity to establish your company, sign and authenticate contracts digitally and encrypt and send documents securely.

Welcome to our global community of Estonian e-residents.

As an e-resident of Estonia, you can now register your company online. First, you obviously want to decide on a name for your company that is unique, which means it can't be too similar or overlap with existing companies.

You also want to make sure your desired domain name is available so you can use it for your website. Check your domain availability with Namecheap.

While there is no requirement to appoint a local director for your company, you need to have a local contact person, who acts as a messenger between your company and the local authorities.

It's important to understand that only you are in full control of your company. You are the owner and the management board member of your company. The local contact person cannot make any decisions on behalf of your company. Only you can.

Now, you could go through all these steps yourself by using the Estonian e-Business Register, the Company Registration Portal and further down the line you could even do your accounting yourself, but keep in mind that many of the documents in those processes will be in Estonian only. Don't forget that you also need to appoint a local contact person.

Does this all sound way too complicated to do it yourself?

Exactly, I thought so. That's why the e-Residency platform provides a marketplace where you can find a growing number of trusted service providers for e-residents that offer all kinds of services from virtual offices (your required local contact person) and finance, tax & legal to banking and payment.

When you browse through that marketplace you realize that there are many possible options to choose from. Which path to follow is now determined by your plans and your individual situation.

The most suitable service provider for you depends on the kind of business you want to establish, your company size, the kinds of products or services you sell, and also on whether you intend to invest your company profits at a later stage.

Due to the multitude of factors and the number of possibilities, this article focuses on only one service provider, namely Xolo.

This is the service provider that has been used by Niavimi since its foundation, which means I can credibly share my first-hand experience. The reasons why I decided to work with Xolo are explained on the About page.

Should you also consider Xolo as your preferred service provider for your company in Estonia, there are certain aspects you want to be aware of.

Xolo not only assumes the role of your legally required contact person and mailing address in Estonia, but their team also manages the back end of your company, which means that everything from accounting, compliance, taxes, and the annual reporting is done for you.

Just this alone will save you hours each month.

The onboarding process after you sign up with Xolo is very smooth and guides you through step by step to get your company up and running. Should you not have your e-Residency yet, you have the option to apply for it from within Xolo's onboarding portal.

So, if you decide to work with Xolo as your service provider and you don't have your e-Residency yet, the best way is to just sign up with Xolo directly and you will be guided through the entire process.

The setup time of your company is only 2-3 days if you are already an e-resident. If you don't have your e-Residency yet, the above-mentioned time frame of about 1-2 months is needed.

Now, Xolo is geared towards one-person businesses, freelancers and solopreneurs who offer digital services or products. This means that Xolo does not yet support companies or businesses that involve buying and selling physical products (including drop shipping and Amazon FBA).

If your plan is to set up an Estonian company that falls into one of these categories, you want to visit the e-Residency marketplace and choose another service provider that supports your kind of business.

At the time of writing, Xolo offers 4 different plans, of which one does not require e-Residency at all, but comes with certain limitiations, of course. You can always check the latest information and find a much more detailed comparison of the Xolo plans on their website.

The legal form of your company is an Estonian private limited company (OÜ, "osaühing" in Estonian), which is similar to Ltd. (UK) or LLC (US) structures.

As the founder of an Estonian private limited company, you are required to pay EUR 2,500 as company share capital (effective 1st February 2023, the minimum share capital requirement of EUR 2,500 was abolished), which you are free to use in your business operations.

However, you don't need to pay for the shares at the time of establishment of your company; this payment can be postponed and also paid in installments.

Once the company registration is done, you can access your Xolo self-service portal to manage your company from anywhere in the world. You have everything you need in one place to get an overview of your income and expenses, your bank account balance and latest transactions, invoice status, and important notifications.

The self-service portal lets you easily create invoices and directly send them to your customers. You can also just upload all your expense documents and the Xolo accounting team will process them automatically in the background.

The way Xolo has optimized and automated their processes provides exceptional value for all of us who are Xolo's customers. Up until now, it takes me about 20 minutes per month (yes, that number is correct) to get the accounting part of my own company Niavimi done. I literally just upload all my expense and income documents, receipts or emails and that's it. Xolo will now take care of it.

Imagine how much time and money you save each and every month by not having to spend your valuable hours on accounting yourself.

And should you at any point have any questions or encounter issues, Xolo has really an excellent support team that has always quickly answered all my questions. Great customer support is something that unfortunately seems to be increasingly rare nowadays, so Xolo definitely deserves to be highlighted as a very good example of how it should be done.

While the Estonian e-Residency and Xolo are certainly the best solution for me in my current situation, you want to analyze your individual circumstances and needs, and match them with the right solution.

My aim is to present you with options and opportunities that you maybe didn't know exist.

e-Residency

Taxes