October 22, 2015
By: Stanislav Yurin

Welcome intro

Motivations

Let disclaimer be first.

First, and above all, this site gives no legal or financial advice, but is rather a discussion and an appetiser to learn more. Those who are seeking for an international lawyer, agency, auditor or banking consultancy are encouraged to use the usual ways.

I am considering the topic, by its own nature, is an attractor for a certain group of people. For people who are not only seeking for the answers, but also willing to enjoy the seeking itself, and thus learning in process. Also I assume we are starting lean. There is no much sense in obtaining e-resident card of you are already able to spend several thousands of USD/EUR on company formation and several hundreds in a month for bookkeeping. Any discussion here is targeted on how to save on your kickstart (and to do this legitimately, at the first place). Going fat is always the option, but you know why you are here.

Also I shall tend to skip the most funny parts of being e-Resident like installing id-card drivers, navigating government services websites and programming auth requests, but instead will focus on boring and problematic subjects as composing the Articles of Association for your company, exploring shareholder's monetary contribution options, surviving the tax reporting etc. Straightforward things, like the fact your private limited company should have OÜ in its name, are also likely to be skipped most of the time. If you are feeling like something crucial was omitted, you are welcome to ask me about that in comments or more general Ask Me Page

Above all, the main purpose of this site is to search for and communicate with people who have similar interests and problems. Do not hesitate to comment, criticize and share experience. I'll readily publish any guest posts of a good value as well.

I am myself not moving all of my projects to Estonia by default, but rather going to gradually introduce the tools into existing and new experiments. At first I planned not to publish my experience until most of the things done (from company creation to tax returns and hiring accounting) but then decided to share my thoughts on the fly, since this in turn may attract more intensive experimenters (I am not a tycoon to test everything right away) and provide much better feedback overall.

What e-Residency is not

As I was finishing the post, Kaspar Korjus (the director of e-Residency project) pointed me to the good post on medium which effectively describes many of the points I was going to make, and also touches taxation and banking topics in brief.

So let this part be "the mandatory post on what is e-Residency (not)"

  • It is not a residency in a literal sense. Neither it automatically gives you a so-called “resident” status in Estonia (which is good), neither helps with residency, visa, citizenship etc, which is.. well, depends on what you were seeking for, at the first place. (However, note that legal entity you are establishing under Estonian law IS an Estonian resident.)
  • It is not somehow “a financial offshore”. Offshore sometimes has pretty opaque meaning, and if you are coming from the according background, you probably already know these things better then me. For those who are not, I have two kind of news for you.
  • The “bad" one: contrary to "popular belief", Estonia is neither a tax haven, nor giving anyone any tax, legislation or accounting exempts or privileges, which it is not giving for its own citizens, nor serves as a European financial “black hole” or sort of. In fact, there are several other EU countries who can help stranger with this in far more comfortable way.
  • The good one: Estonia already has the kind of legislation, taxes and accounting standards you were probably seeking for the most part of your (business) life. Of course, you can find even easier standards in, say, Belize, Panama or Cayman, where the one can enjoy (almost) total absence of taxes and annual reports, but you have also likely checked the most famous payment processors' world coverage pages.. they are simply not there. Also your client's financial department probably has some prejudice towards them, and this is for a reason. To say in short, if those things were that easy, there would not exist such a project as e-residency, at the first place.

What it is

Simply speaking, e-residency gives you an electronic key card, so you can enjoy doing business in this European country in the same way you had to fly there before, in the role of the citizen of another country, or use remote (not free and particularly fragile at times) legal services. And how mush this is true in the real life, let be the subject of our journey.

What are we going to do

We (me and likely you, the reader) want to establish and operate a legal entity in Estonia, most probably in IT business. We want to receive money from selling of our products and services, obey Estonian laws, fill tax returns, pay taxes and enjoy our extra money, if any, elsewhere (including, but not limited to your home country).

How do we want to do it.

Again, if you have come here, I am presuming you are a bit of do-it-yourself type, like myself, and want at least to learn how to start and do that remotely for yourself. In a way that e-residency is intended to serve, at the first place.

Like in any other country, you can find countless legal, consulting and accounting firms that can do everything for you. You do not even need any e-residency for this, and of course people were doing business in Estonia from the beginning of the history, even, you know, before all that ado with computers and internet have started. This is not the main point of the journey, at least for now.

Tags: general