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Estonia in the European Union boasts the lowest company taxation in Europe, with an incredible 0% rate, that has been introduced in the year 2000., and has been maintained ever since. The Estonian economy has written a success story in thie two and a half decades, thanks to the extremely favourable tax environment that has attracted literally hundreds of thousands of entrepreneurs. With respect to the fact, that Estonia is a full fledged EU member state and a Schengen member state, and not an offshore country, the benefits it offers is virtually unprecedented:

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Warning, attention

A company in a specific country is not a „one size fits all” solution. You definitely shall not purchase this specific service without guidance from a properly qualified professional. The benefits we’ve listed are true, but to profit from them, you need a personalized tax planning, and first off, you need to consult with a professional, wether your specific business is eligible for those benefits or not. According to statistics, one third of companies set up by foreigners in the countries where we’re active, don’t survive till the second year. The reason is, that people are deluded into believing, that a tax optimization plan can actually work without any personal planning and individualization. The benefits we have disclosed here, are only valid for the clients, that are guided through the whole process by our highly qualified and experienced professionals. Detre Varga & Partners LLP. assumes no liability, if internet users try to implement our know-how by hiring third persons instead of us.

The 27 and increasing member states of the European Union offer a variety of benefits to foreign ventures. It is possible to set up a company in Estonia that pays absolutely zero tax for incomes, that are made outside Estonia, while the entity does not count as an offshore. Yes, it’s a fully domestic Estonian and EU company, with an EU VAT tax number (EU VAT) and an online bank account, but the income generated outside Estonias territory is taxed with 0%. 

It’s important to note, that not all activities and not all countries citizens are eligible for the full range of benefits. An estonian company formation shall be planned well by our tax advisory team, taking all aspects of your business activity to consideration. Tax law shall be approached by professionals with 10+ years of experience. Neglecting preliminary consultation and planning may lead to risks of sanctions, or even criminal charges. 

 

As said before, an estonian company is the best option for activities generating incomes and providing services (or selling goods) outside Estonia If you plan to sell products or services within Estonia, you may still see great tax benefits, but you need to consult with our experts, on how to optimize your taxes the most.

 

Beside taking the locality (inside or outside Estonia) into consideration, there are some activities, which are most suitable to pursue with an estonian company.

 

 

It is not sufficient receive advice on estonian taxation, you need to talk with our expert about the international tax treaties between Estonia and your country of tax residency (the state in which you’re counted as a tax resident). This means that before setting up an estonian company you need to find out, in which state(s) you’re counted as a tax resident. This sometimes requires complex analysis by an expert. 

 

There are no quick fixes, shortcuts or simple solutions. You need to understand the basic concepts of your businesses and your personal taxation. Anyone trying to sell you a standard, one size fits all solution, is not to be trusted. The company formation is only 10% of the solution, 90% is the individual tax planning and consultation, that’s inevitable to get a successful start. 

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Check these frequently asked questions!

Can I get an EU visa (residency, etc.) through my company?

 

It is possible to become an estonian resident as shareholder and CEO of an estonian company, but it’s not as easy as some agencies may show. The opportunity is there, but to get an estonian EU residency you need to prove to the estonian government, that your company is able to sustain you, and will create value (ultimately in the form of taxes) to the estonian economy. Therefore, don’t count on getting a company residency any time sooner than three months of activity. Your company needs to have a track record, it needs to prove itself, and trust from estonian authorities does not come easy. 

 

Can I have a physical address (not a P.O. box) in Estonia and a local phone number?

 

Our estonian office offers physical address, if any third party (bank, authorities etc.) require. It will be a real, physical office address. 

We can also provide a land line number (local estonian number), but it makes more sense for you to register a virtual estonian number, which is a real local estonian phone number, virtually connected to your device. The demand for local phone numbers is great, therefore, specific service providers have developped a service for this need.

 

How much does an estonian company formation cost?

 

You’ll get specialized consulting with us, so we can get a better understanding what you’re actually dealing with, and your specific circumstances. Based on this, we’ll recommend you the jurisdiction (Estonia or elsewhere in or out of the EU), that’s the best for your goals personally.

 

Therefore, it’s difficult to assess how much exactly an estonian company formation would cost, but let us tell you one thing, an estonian company is the cheapest solution overall, among companies in the whole EU. Estonia is obviously beating all other EU countries combined, with it's bold and genius tax system that's in place since the year 2000. Therefore, if an estonian company suits your business at all, the formation and the maintenance fee will be cheaper than anywhere else in Europe. 

 

How can Europes leading digital economy be the cheapest?

 

How can the best engine consume the least fuel? The best solution needs to be the simplest, and the simplest needs to be among the cheapest. 

Estonia was at a total economic and social disaster in the beginning of the 1990s, as a consequence of Soviet oppression. It had to prove itself in the European Union, and later the NATO, that has required a genius economic policy. Estonia has realized, that setting corporate taxes to 0% would attract foreign capital. May be only 1 of 10 companies would do some serious investment, but estonian tax system has attracted hundreds of thousands of companies since then, and many many big companies have really invested into estonian economy. It is worth for Estonia to let 9 companies thrive without paying any tax from their profit, to attract 1 serious investor... In 2000. it seemed to be a bold, almost insance policy, but after 24 years it has proven itself to be genius. 

 

What are the steps of an estonian company formation?

 

You need to book an appointment for a company formation in Estonia on our website (see below).

 

To complete the booking, you’ll need to answer a few questions. It’s not meant to bother you, but we’re extremely busy, so if we once sit down with you online, and spend almost an hour on you, we need to be as prepared as we can be, to give you well reasoned, substantial advice.

 

Once you’re done with the booking, we’ll consult with you online, and come to a conclusion, wether and how we can cooperate with you. Thanks to the screening questions mentioned above, and our experts preparation for our online consulting session, in just one go, we can reach a conclusion together, in which jurisdiction you should be incorporating, and we can jump to the incorporation process right away.

 

At the next step, we guide you through the incorporation process fully online. 

If you don't have an estonian e-residency yet, we would first register that with you. It's basically sort of like an e-signature (digital identification tool) and a special account for a communication platform with the estonian state. Physically it's a terminal and a plastic card, that connects your devices with USB. In the company formation procedure it's needed to sign the company documents, and later, to give power of attorney to your accountant to start the accounting process.

Your Estonian company may get registered within 2-3 days, once you have your e-residency. This allows you to purchase your company domain, open an online IBAN number, and start your activity. To sell goods and services within the EU, you may need an EU VAT number, especially if you're doing B2B trade. 

To get started right away, book an appointment here!