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E-residency

Frequently Asked Questions

FAQ

Quick Tips

What is Estonian E-Residency?

E-Residency is your digital identity and enables you to open and manage Estonian company – 100% online. It’s a perfect solution to minimise costs and bureaucracy of running a business.

Start Your New Company?

If you have enough information and you’re now ready to incorporate your Estonian company, get in touch with us and we’ll gladly guide you through the whole process.

FAQs of Estonian E-Residents

We have collected the most popular questions that Estonian E-Residents have asked in the Facebook community. These in-depth answers should give you a clear picture of what E-Residency is all about – and also what it’s not.

To open the company, you need to pay the state fee of 190€ — this is the same amount everybody pays in Estonia for establishing the company. Additional fees may apply dependent on how much help you need during the establishment process.

You don’t need a personal address. Your company, however, has to have a legal address in Estonia. For this purpose we have a Virtual Office service. From Januari 2018, you also need to have a contact person in Estonia (service provider).

Once you have the e-residency card, you can do it in 30 minutes.

This depends heavily on the business that you do. Our Micro Company package starts from 67€ and includes basic bookkeeping.

Currently, you still need to travel to Estonia for identification, if you want to open an account in Estonia. It’s not easy though, as if the business has no connection to Estonia, then banks may decline to open an account for you. You can open an account in your own country (for the company) or use Fintech companies, such as Transferwise Borderless, Holvi, Paysera, Payoneer, Revolut, Moneta International etc.

Estonian company does not have a traditional income tax. 20% tax is paid when you take money out of the company as dividends. Salary taxes are paid according to the rules of the country where you’re a tax resident in. VAT rate is 20%.

We can help you with company incorporation, accounting, tax & legal, business advisory, licensing, virtual office & contact person services. Everything you need to run your e-Residency company.

You can do all kinds of businesses, it doesn’t really matter. It’s just setting up a business like everywhere else.

Apply for the e-residency card. Once you have it, get in touch with us and we’ll help you to establish the company online. NB! Make sure you are ready to hustle & grind to build a start up!

Yes, we allow multiple shareholders. We allow all sorts of company structures, and we can help to create documentation to manage the relationships between the shareholders.

Managing the Estonian company is simple. In case of the Limited Liability Company (OÜ), you have two legal functions: Shareholders and management body members. Shareholders appoint the board members and have the power to call back the board members. However, the board member is the one who is liable for company activities and who has representative rights for the company. The management board is the governing function of the company. 

Yes, legal entity can be a shareholder of the Estonian company, and it can also be a foreign company. In this case, e-residency card cannot be used, and we have to register the company via notary using the power of attorneys. You need to extract relevant data about the legal entity from the registry, apostille and translate the company documents, and deliver them to us by post. You can also visit Tallinn. The exact process is described on case by case basis. 

Yes, it is. Estonian business registry is very transparent and nominee directors are not allowed.

You can add more shareholders in the future. Adding shareholders is done via notary, meaning, you can’t use e-residency card to add new shareholders. To add shareholders, you can provide us a power of attorney or travel to Tallinn. 

Yes, you can remove shareholders via notary and Comistar can represent you using the power of attorneys. However, on which terms the shareholder can be removed depends on your articles of association and usually requires a consent of the shareholder who is removed. 

It’s not mandatory to have a shareholder agreement, but it’s strongly recommended. Please read our article here: 

https://e-resident.me/shareholder-agreement-for-e-residency-companies/

Yes, Estonian company can be a shareholder in other companies as well. Depends on the jurisdiction of the other company, but it’s likely you’ll need to extract the relevant information from the Estonian business registry, apostille it and post it to the country where you’re buying shares. In general, these documents cannot be older than 3 months.

2500€ for LLC (OÜ), and 25 000€ or Public Limited Company (AS). For LLC, you can postpone paying the share capital.

Share capital can be paid via Estonian credit institutions or using online banks like Holvi or TransferWise Business. It’s important that the bank can provide a digitally signed proof of payment. You can also do a non-monetary share capital contribution, which can be Bitcoin, laptops or any other asset which value can be assessed. 

Only physical persons can be members of the management board. You can’t be politically exposed person nor have any business restrictions from other countries.

You can add new board members via Estonian e-business registry, if the new board member has the e-residency card. If the new board member does not have an Estonian e-residency card, then we’ll need to use notary services. 

Board members are liable for all company activities. If you are appointing a different board member as a shareholder, you need to have full trust in this person. 

No, a board member does not have to have any shares in the company.

Yes, annual report is submitted once a year. It’s mandatory for all Estonian companies. 

Yes, you can. You can invest into startups, crowdfunding platforms, cryptocurrencies, stocks, bonds, gold, silver and so forth – it’s up to you how you want to diversify your investments and grow company assets. 

Yes, you can loan money to the company.

No, it’s not allowed to loan money from the company to the related persons. 

Yes, you can change your company name anytime on Estonian business portal.

There are multiple ways to get the Estonian phone number: 

TravelSim, Skype, MessageBird.

We do not assist with visa nor residence permits. Our services are only for businesses. 

Company can be closed by appointing a liquidator. From there, liquidator is responsible for closing the company. We provide liquidation services, and the price depends on your company situation. We do not liquidate companies which have debts and liabilities to third parties. Read our article on how to appoint a liquidator here:

 

https://e-resident.me/dissolving-estonian-company-appointing-liquidator/

Yes. You can either distribute dividends, pay liquidation proceeds (taxed as dividends) or pay salary to yourself. Please note that if you have paid in the share capital, you can withdraw the share capital tax-free. 

Once you have opened your Estonian company with your e-residency card or through notary and you want to get some money from your hard-earned work, then there are mostly two options

  1. Receive salary
  2. Receive dividends

There are no obligations to do any of it, it is your decision if you want to pay it or to reinvest in your business.

If you decide to pay salary and the work is not done in Estonia then no Estonian salary taxes are added, but you would need to look up how is foreign salary income taxed in your tax residency country.  

 

When paying dividends then the it will be taxed in Estonia.

Since Estonia does not have corporate tax – this means the income tax that is payed is not usually taxed in your tax residency country (if Estonia and your country have a double taxation avoidance act).

 

There are some exemption for some countries, we would suggest that you consult with your local tax advisor on these matters to be sure.

Once you have opened your Estonian company with you e-residency card, then you might be wondering what taxes can you expect. For example, if you are selling to end consumers then you might need to pay VAT once you exceed the VAT registration threshold.

If you are disturbing dividends or paying management board salary then income tax is also added.

Taxation all depends on your business who are you selling to, are you VAT registered, will you have payroll (in Estonia) will you pay dividends etc.  

Dividends can be payed from previous years profits and distribute as often as you like. But we would suggest paying dividends a few times a year (for example 1-4 times a year)

 

There is an regular dividends distributing law in Estonia, that enables company to pay only 14% income tax if dividends are distributed every year, nut this benefit is only for company to company.

If you need more information on this part or you have a plan to open an Estonian company that is owned by other company then get in touch with us and we can help.

 

Regular dividends are taxed with 20 % income tax from gross payment. So, if you decide to pay out 10 000 € of dividends, you would need to pay 2 000 € of income tax and you would get 8 000 € net payment.

If you opened an Estonian company via your e-residency card and business has grown, then you might need to look up on your financials – if they exceed a certain threshold you might need to be inspected or audited.

 

Auditing is the review of company’s annual report, provided that the information that it provides is correct and reliable.

 

Inspections is the same as auditing but it’s more of a summary assessment. The inspection is less costly.

 

Audit needs to be done by a sworn auditor and it can’t be done by the same firm or person who does your books i.e. he/she needs to be independent.

Auditing is mandatory if certain measures are meant. Also, audit can be done before the measures are met, if the company decides so.

Audit is mandatory if two of these measures are met

  • Revenue 4 000 000 €
  • Assets value 2 000 000 €
  • Average no. of employees 50

Audit is mandatory if one of these measures are met

  • Revenue 12 000 000 €
  • Asset value 6 000 000 €
  • Average no. of employees 180

Inspection is mandatory two of these measures are met

  • Revenue of 1 600 000 €
  • Asset value 800 000 €
  • Average no. of employees 24

Inspections in mandatory if one of these measures are met

  • Revenue 4 800 000 €
  • Asset value 2 400 000 €
  • Average no. of employees 72

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