Why do you need Estonian e-Residency?


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Yagublu answered

I would like to say it depends on what you want to achieve, but it doesn't depend. No, you don't need Estonian e-Residency at all. Let me explain why:

1. Because unlike offshore companies you will need to pay taxes - normal rates like 20% dividend tax when you withdraw money from your company. Also 20% for income tax, also social security that will add up to 57,8% of income of your worker - this is really high when you compare to even European countries. To make even clear you will need to add 20% VAT tax on top of every product you sell to Europeans.

2. Because in your country if you pay taxes that high, you know at least government gives you services like education or health, in some countries like Singapore government saves your social security payments and you will get all of them when you leave country.

3. Because Estonia doesn't give you any rights to stay or visit country, you get nothing in return of paying taxes to them. Estonia just takes your tax money, that's all.

4. You will still need to visit Estonia to open bank account and Estonian banks can choose not to open bank account for you. It's strange, but local companies also get refused when trying to open bank account in Estonia.

5. Most of people that got this e-Residency don't know even what to do with that, less than 10% actually opened companies. That makes more than 2500 people. As you know opening companies doesn't mean they will have any profit, or even income.

6. You will still need physical address to register company in Estonia using e-Residency. It's really strange for me, why I need to have a box office or virtual service provider when you call it "e-Residency". Doesn't word "e" there stands for Electron?

7. It's really hard to dissolve company in Estonia - it might take 6 months to close company.

So Why Estonia is doing e-Residency program? Answer is clear, Estonia is one the worst economies in the European Union, most of youth left country to earn income in countries like Germany, UK, Sweden, Finland. Average age of population is high, they need cash to keep system running and to pay pensions.

I would advise people to research about Hong Kong and open company there, check the question "What is the best country to start a company?"

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