Estonia's e-Residency Program

http://www.vice.com/read/estonias-e-residency-program-is-the-future-of-immigration

by jkaljundi • 10 years ago

126 41 10 years ago

neodypsis5• 10 years ago

Why does Stripe not currently support businesses based in Estonia? (See: https://support.stripe.com/questions/what-countries-does-str...)

Regarding the need of a physical address in Estonia in order to start a company, if their government could address that somehow, maybe Estonia could be another option to use with the Stripe Atlas service? (See: https://stripe.com/atlas).

zo1• 10 years ago

There are already "virtual offices" being offered by Estonian physical companies. These fulfil the requirement for having an Estonian address for certain functions. It was in the article, near the end.

neodypsis5• 10 years ago

Thanks, I took a look to the services linked from the article. What I still don't understand is the need of a physical address in Estonia, instead of one in another country, if you're an e-Resident. How does it work in Delaware? Reading the Stripe Atlas FAQ, I understand one doesn't need to live there, but do you still require some kind of physical presence there? For example, an office. (See: https://stripe.com/atlas/faq#incorporation)

deftnerd• 10 years ago

The current requirement for e-residents to have an Estonian postal address is quite a speedbump for what they're trying to accomplish. The article mentions several companies filling in the gap by offering virtual addresses. Does anyone have any suggestions on a good Estonian company that provides this service?

edko• 10 years ago

Yes. I use LeapIn. Take into account that an address alone is not enough. If you operate, you will also need accounting/tax-filing services. LeapIn provides all of that in a very professional way, and with reasonable prices.

zutnop7• 10 years ago

Thank you edko for good words! We're happy to help you :)

ghock4• 10 years ago

While the postal address is annoying, I think (currently) having to go there to open a bank account is a bigger deal, since it will be hard to open one anywhere else. Even if you can get a bank account, many payment providers want you to have your business, bank account and residency in the same country (something e-residency won't do).

So while I think the are moving in the right direction, it's still reminds me of government startup programs disconnected from reality. My suggestions would be that they, other than sorting out banking/payment processing:

a) Allow companies to register as LLC or Limited, for increased customer confidence. b) Give foreigners a income tax holiday, so they can become resident without worrying about paying taxes on worldwide income. c) Generally make it easier to go there. Last time I tried to figure out how much it would cost to go there for a month and work I couldn't really find any (at least cheap, upfront) prices for serviced apartments and coworking spaces. They need to do more "outreach" (tourist board for entrepreneurs please) than just "look how good we are".

zutnop7• 10 years ago

In short:

1) law change for allowing bank account opening without physically coming to Estonia is in the government and should be in force by Autumn

2) our customers are successfully using different payment providers

3) LLC is the "de facto" incorporation type for our customers

4) Becoming an e-resident won't make you an Estonian tax resident, so you don't have to worry about your worldwide income. But when you start an Estonian company then the company finances/taxes have to be done by Estonian laws/rules.

5) Going to Estonia is like going to other European countries. You need transportation and a place to stay and you get them via normal means online :). Visa requirements depend on your real residency. Being an e-resident doesn't change this. For more info: http://www.visitestonia.com/en/

6) For physical coworking space, just google "coworking tallinn" or something similar. Should be plenty of spaces available. If you wan't to see the other end of Estonia, then "coworking tartu" :).

Erko, from LeapIN

Our take on e-Residency: https://www.leapin.eu/articles/e-residency

Tomte• 10 years ago

There is no requirement for e-residents to have an Estonian address. Quite a few tourists who have only been in the country for two weeks (me included) have an e-Residency card.

Maybe you mean a requirement for incorporation or something?

mixedbit2• 10 years ago

In which EU country starting a company is the easiest and cheapest for people that are not residents of this country?

ghock4• 10 years ago

UK probably. But resident requirements for starting companies are somewhat rare these days. Getting a bank account or sorting out your taxes is another story though.

mixedbit2• 10 years ago

I've heard that to start a company in UK, a UK bank account is required, and it is pretty difficult for non-residents to get.

DrJokepu• 10 years ago

Probably the United Kingdom. It costs £15 (about $21) and can be done online in 15 minutes. Your company will need a UK address though (which can be obtained easily from any of the "virtual office" businesses).

return0• 10 years ago

Cyprus and Malta are popular for internet companies.

ghock4• 10 years ago

True, not very easy though (if you want the benefits at least).

tormeh• 10 years ago

http://www.doingbusiness.org/rankings

Rank by "Starting a Business".

Looks like it's Lithuania. Denmark wins overall, but that includes things like property and electricity that you may not care about. Sweden and the UK are also not bad.

And holy shit Germany and Austria do badly in this ranking when it comes to starting a business!

phillc73• 10 years ago

Consider Ireland.

Initial setup costs might be a little more onerous and expensive than the UK, but can still essentially be completed easily online. The benefit with Ireland is that corporate tax is only 12.5%, compared to 20% in the UK.[0]

[0] https://en.wikipedia.org/wiki/Tax_rates_of_Europe

simonebrunozzi2• 10 years ago

I wrote about the program a few months back: http://brunozzi.com/2015/08/22/estonia-e-residency/

(I hope you find it useful)

neodypsis5• 10 years ago

Thanks for sharing your experience. Have you noticed improvements in the different issues you wrote about?

I think they have improved in those you raise in point 4.2 of your post. For example, I tried downloading their software (from https://installer.id.ee) and got redirected to the Mac App Store to download from there.

simonebrunozzi2• 10 years ago

I haven't checked recently, but I hope and assume that most of the issues are going to be fixed.

hosh• 10 years ago

Sounds a bit like what happened in Stephenson's Diamond Age.

therein• 10 years ago

Yeah, I've applied when this was first announced but I couldn't pick it up since they only allowed it to be picked up at their New York Embassy but I was near Chicago at the time. Now I'm in SF and apparently they are coming to SF on May 20th so I'll hopefully get to pick it up.

nordify2• 10 years ago

Until the Estonian e-resident can open a bank account remotely (likely later this year when the new law goes into effect), the residency is mostly an interesting curiosity, not much more.

zutnop7• 10 years ago

Until then, it makes for a perfect summer holiday location (with a 30 minute visit to a cosy bank office).

#1 https://www.lonelyplanet.com/travel-tips-and-articles/best-v...

greenspot2• 10 years ago

Don't get the hype. Still a Delaware Inc (C Corp) is better:

- Physical post address can be outside the US

- With Stripe Atlas you can get the bank account for the Delaware without visiting the US (possible with Estonia since few weeks)

- No need to wait months to get the e-residency and to get started (biggest bummer)

- Way larger ecosystem of tax guys and lawyers in the US => more competition => cheaper

- native language is English, so contracts are always and only in English; in Estonia there is one piece which must stay Estonian (don't remember which one)

- Larger ecosystem and English as main language makes it very easier to google answers to any tax or law related questions => huge knowledge base online, with Estonia there's just the documentation from the state

- Default to get VC money, the Estonian entity (OÜ) is not learned and investors are reluctant to put money in

- Estonia follows EU law which is compared to US law extremely consumer friendly, has strong consumer protection rights and super friendly to labor as well => EU law is over-regulating in general

- Cross-country relationships, like Delaware Inc is the holding and local entities are operational are more learned with local tax consultants than with Estonian entities => cheaper

- Delaware Inc.: no need to disclose MDs at the beginning, Estonian entity has full disclosure from day 1

Delaware is doing this business for decades, of course they must be better but I expected more from Estonia's e-residency.

nordify2• 10 years ago

There is one benefit of incorporating in Estonia: 0% corporate tax on undistributed earnings.

zutnop7• 10 years ago

Good information! As I see it from my point of view:

Timelines:

Does anyone have any actual info on the Atlas timelines/waiting lists? I haven't seen a single success story/blog post discussing this. Atlas FAQ states 2 weeks to get up and running (tax ID and payment acceptance), but when asked about waiting time, their answer is "We don't have an exact timeline for adding new users, but we'd love to chat more about your use case".

e-Residency (from application to card delivery) should take 2-3 weeks. Not months.

Taxes:

The difference in the level of complexity of US vs Estonian tax rules can't be described in words :). That's why you will need the huge number of tax advisers/lawyers in US, and you'll pay them.

I'm not really sure any person, who's not a resident of US and is not living there, would benefit from having a body with tax residency there, if there aren't other compelling reasons. For example, you would do this if your funding source is coming from there, because funding is better than no funding, no matter the taxes.

Funding/holding:

US has a huge advantage here, clearly!

Transparency:

Estonia is playing for total transparency and an efficiency heaven. If you want to do shady offshore stuff, then this is not for you. #nopanamapapers

TL;DR: Starting and new VC funded startup or a big corporation -> US. Starting a one-man online business (and currently not a tax resident of US) -> Estonia!

greenspot2• 10 years ago

Thanks for your reply.

Does anyone have any actual info on the Atlas timelines/waiting lists?

Without Atlas you get a Delaware instantly from one of the many registries, Atlas is only needed if you want to get the bank account without going to US (something which Estonia can't provide yet (I learned in another reply from you))

e-Residency (from application to card delivery) should take 2-3 weeks. Not months.

Check the forums, rarely people get it in few weeks

The difference in the level of complexity of US vs Estonian tax rules can't be described in words :).

Do not agree. At the end of the day you need just one tax consultant. And one is enough also for the US. And they are easy to get in the US. And knowledge online is massive, check this for Estonia.

Besides, taxes can get quickly complicated and messy, especially if you are a resident in another country than your corporation. And because of your local tax regulations and not the one's from the country of the entity you need good tax people who are familiar with your country-of-entity-and-country-of-residency combination.

Estonia is playing for total transparency and an efficiency heaven. If you want to do shady offshore stuff, then this is not for you. #nopanamapapers

Sorry but this is getting bold now. There're many totally legal use cases where a non-disclosure at the beginning is favorable. Still you can't do anything illegal, authorities will get you with an US corp as well, it's just about that with on Estonian OÜ everybody can google what you are doing.

US. Starting a one-man online business (and currently not a tax resident of US) -> Estonia!

Sorry have to disagree here again. If you want to start an one-man-show then the Delaware LLC is more favorable, even easier than the C Corp. There are enough online resources giving further explanations.

I don't want to bash your ambitions and I like that Estonia is way more digital and advanced (or tries to) than other nations but I have still problems to see any added value.

K_V• 10 years ago

https://app.cyfe.com/dashboards/195223/5587fe4e5203610228371... if you are interested in statistics and current state of e-residency

Estonia's e-Residency Program

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