I'm considering using an Estonian OÜ for a SaaS business and would love to hear from people who have actually gone through the process.
What surprised you after becoming an e-resident and establishing your company? Were there recurring costs, compliance requirements, banking/payment issues, tax complications, or other operational challenges you didn't anticipate?
How easy has it been to run the company remotely? Have you ever needed to travel to Estonia to resolve an issue?
Looking back, would you do it again? What do you wish you had known before getting started?
I'd appreciate any lessons learned, gotchas, or advice from current or former e-residents.
Company will end up as tax resident from the country where it is managed & controlled .
If there is an DTA the tie breaker rule applies and the country from where it is managed & controlled gets the right to tax .
Also you get to enjoy bureaucracy+ dual accounting in both countries .
If there is no DTA it can lead to double taxation .
And if you don't have a fixed place of management/business+ tax residency (basically nomading) a US LLC disregarded for tax purposes is a much better fit .
What do you wish you had known before getting started?
How easy has it been to run the company remotely?
Have you ever needed to travel to Estonia to resolve an issue?
Looking back, would you do it again?
I never needed to visit since I could use Wise for banking.
The only thing is that surprised me was the tax rate, when I created my Company the advertised rate was 20/80 but in reality it was ~25/75 and it increased since.
From: https://learn.e-resident.gov.ee/hc/en-gb/articles/3600007215...
> Corporate tax residency
> However, some countries have different rules for deciding if a company is tax resident. It is common that, in addition to the place of incorporation, the place of effective management can trigger tax residence. If you run your company from a country with regulations like this, then the company may end up having dual tax residence. This happens when two states believe that the company is tax resident in their jurisdiction and will want to tax the company’s profits.
This 'It is common that [...] the place of effective management can trigger tax residence' is indeed common.
It doesn't matter where your company is incorporated, you'll be liable to pay the taxes where you live. And if you think the revenue service of your country is going to forget, you are guaranteed to have a very nasty surprise waiting for you when you least expect it.
The only way to more or less skirt this rule is to keep moving so you're technically never fiscally resident in any country (not even sure if it works), or move your personal fiscal residence to a tax haven like Monaco.
Company stays "in" Jersey, none of the humans need to live there?
So if 50% or more of your directors spend 183 days per year in the UK then your Estonian based business becomes UK tax resident in the eyes of the UK.
Do not underestimate the complexity of these rules.
Also, shameless plug for people broadly interested in the country of Estonia and how it became a leader in e-gov/tech only a generation after independence from the Soviet Union, I wrote a book about it after being curious myself! https://www.rebootinganation.com/
See https://www.e-resident.gov.ee/understanding-cross-border-tax..., look for “Permanent Establishment”
I’m using UK myself. It takes a few forms and half a day to get a working Wise/Stripe account.
But you have to investigate how the Dutch will treat it .
You could apply for a advance tax ruling with the Dutch tax authorities before doing anything
Later on when you scale, you can convert the LLP into an LTD.
Also you might avoid exit taxes as it is an partnership , if you move between countries.
Also there is basically no information in the post besides 2 founders in different countries.
Honestly, I’d avoid the EU in general. There are only about four or five good places to set up a company and stay connected to the financial system: the US, especially Wyoming or Delaware, Dubai, Singapore, and Hong Kong.
(you'd probably be downvoted anyway because of the insubstantial anecdote)
It’s your choice to decide to keep your Russian citizenship. Then you have to pay the price of being a Russian citizen.
It's not as black and white as "just renounce or pay the price". Renouncing your Russian citizenship is not an easy process, and they might even deny your request... It's not like cancelling a Netflix subscription.
And merely being Russian doesn't make someone a bad person or a supporter of Putin's regime.
Do you want to keep it or renounce it? Sounds mostly that you either wanna remain Russian or you are the most lazy person on earth.
Have you ever paid taxes in Russia or any way contributed to Russian society? If so you are directly financing the genocide committed by Russia. Are you at least admitting Russia is engaged in a genocide and that Russia must be defeated and treated just like the third riche?
I'm not pro the Russian regime, there's really no need for the aggressive tone and insults. All I said is that it really isn't black and white when it comes to renouncing it, and even the Reddit post you linked shows that it isn't an easy process, the comments too describe difficulty in doing it and asking for help, some examples:
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
- https://www.reddit.com/r/tjournal_refugees/comments/1lrdngq/...
Some governments have even stopped enforcing renunciation requirements because people have found it difficult to renounce. One such example is the Netherlands[0]: "There are currently indications within the implementation that naturalized Russians are experiencing problems regarding this renunciation [...] for the time being, it is not enforced for Russians naturalized as Dutch citizens whether Russian nationality is actually being (or has been) renounced."
As I understand, Russia doesn't do citizenship-based taxation like the US does, so I don't have as big of a problem with someone retaining their Russian citizenship when they're living abroad if they find the process difficult/impossible/unrealistic. If they did citizenship-based taxation, then I would have more of a problem with it, as, at that point, it is funding the regime.
I understand why many governments have measures against Russian and Belarusian citizens, but I also sympathize with the people affected.
> Are you at least admitting Russia is engaged in a genocide and that Russia must be defeated and treated just like the third riche?
I'm undecided if I'd call it genocide by definition, but there are definitely things that lean towards it, such as abducting children and trying to "russify" them. I definitely believe they should have never started the war - I don't support it at all - and that they have committed tons of war crimes and awful things such as torture, rape, attacking civilians (also in terms of infrastructure), political assassinations, and lots more. It should end with Ukraine having complete control of its own country and being left to live in peace.
But it doesn't mean I automatically believe all Russians are bad people who support the regime, especially if they live abroad and are trying to build a life.
I welcome both Ukrainians and regime-opposing Russians to come and start a life here.
And of course you as a Russian supporter denies that Russia is committing a genocide. Most pro-Russian people deny the war crimes committed by Russia. You are a terrible human.
Because I can look things up as well as read other people's accounts? I even backed it up, with the very link you provided as well as with a government source.
I can use the same logic against you: why are you claiming that it is easy to renounce your Russian citizenship if you aren't a Russian citizen? I can very easily tell that you, Victor Björklund (not a dox because that's quite literally your username), are not and have not ever been a Russian citizen.
> And of course you as a Russian supporter denies that Russia is committing a genocide.
I didn't deny anything. In fact, I said I lean towards it being genocide, and what I said is that I'm unsure if I'd call it genocide by definition (and I'm not the only one who believes so, because you also have to factor in things such as intent, and that hasn't been determined in international courts and only around 6 countries so far have officially declared the war as genocidal).
Not once did I voice support for Russia in this entire conversation.
> Most pro-Russian people deny the war crimes committed by Russia.
Then you should read my message instead of acting so emotionally and writing such sludge and attacking me when I have never once shown you the same attitude.
I explicitly condemned it. This is exactly what I said, word-for-word:
> I definitely believe they should have never started the war - I don't support it at all - and that they have committed tons of war crimes and awful things such as torture, rape, attacking civilians (also in terms of infrastructure), political assassinations, and lots more. It should end with Ukraine having complete control of its own country and being left to live in peace.
I am guessing you are anonymous because you are ashamed of your support of Russia and you know that you would be shunned if people know what kind of human you really are.
I understand how comments like yours and other sibling comments will generate feelings of being treated unfairly: We do not choose our birth country. We do not know the individual's actions, we do not know their political stance, and it is not racist but still discriminatory to use their nationality against them. They're already punished enough by being associated with their government. That's at least how I see it.
Then again, it is probably due to EU wide legislation, so not something Estonia can do much about even if they wanted to. I hope they find emotional support to detach their individuality from how Russians (and Ukrainians!) are treated in general in the current dynamics. It's not their fault as individual, and I'm sorry that they became victims.
Their neighbor holds a Russian passport. He works at an IT company and earns a nice salary. It's a good life. He complains about being discriminated against. He "doesn't support the aggression". This "not supporting" does not take any material form, he doesn't send money anywhere nor perform any other actions. In the past, he has done absolutely jack squat about the rise of Putin to power (back when doing something was still possible), because he "is apolitical". When the war ends and things blow over, the neighbor will use his Russian passport to go back to Russia, live a good life there using money earned while abroad, and participate in rebuilding the economy, until the next Putin appears on the horizon. He will do absolutely jack squat about the next Putin, because he "is apolitical".
As you can see, it's all upside for the Russian neighbor.
I don't know about others, but something irks me about this common scenario. Sure, there are many subtleties and many ways in which life is complicated. But I see this scenario play out regularly and I can't help thinking that there should be some accountability for the passport you hold.
The real question is what can a citizen do in a none democratic country... If you were Russian would you publically be protesting the war inside of Russia?
And all the people saying renounce citizenship, is your country gonna give him theirs ? Does Estonia offer free Estonian citizenship to Russians who abandon their's?
The real elephant in the room that I feel doesn't come up enough in these discussions is the fact that Israel is a democracy with freedom to protest etc and they are according to even holocaust survivors committing a genocide and according to mathematica and reports killing countless more civilians yet where is them being cut off from the banking system...
Or UAE in Sudan etc. Etc.
I dunno Russia is always the big boogieman seemingly...
If I lived in nazi Germany I would have left asap to the usa like countless people (Einstein etc) did... Strange how they didn't try and stop people back then getting out...
Stanley: That's not what a hate crime is.
Michael Scott: Well, I hated it, a lot, okay.