Navigating the Estonian E-Residency Program for Starting a Company
The e-Residency program, a very cool venture by the Estonian government, aims to connect the business sector with advanced e-government solutions. This program provides you with a digital ID card, allowing you to legally represent a company from anywhere in the world. By following a few straightforward steps, you can start your own Estonian company with ease. This guide will walk you through the process from applying for your e-Resident card to opening a business bank account. For streamlined assistance, consider using services like LeapIN - Start and run your micro business.
Applying for the E-Residency Card
The first step is to apply for your e-Residency card online. The application process typically takes several weeks. Upon completion of the application, you must visit an Estonian consular office to collect your card and confirm your identity. This is a crucial step as it validates your identity and ensures that you can successfully use the digital ID card for online activities.
Setting Up Your Company
Once you have your e-Residency card, you can create a company online through the Estonian government portal. As of July last year, you can also open a business bank account online. However, it is worth noting that not all banks in Estonia provide an integrated process, and they may require additional information such as your tax information number or your economic link to Estonia. This means that it is essential to plan your trip to Estonia accordingly, ensuring that you can open a bank account during your visit if necessary.
Additional Considerations
Starting a company in Estonia involves several steps, and here are some important factors to consider:
The First Tax Withholding Requirement
If you are the director or shareholder and receive profit from the company, you are required to withdraw 25% of the tax from the first euro of profit you distribute. This is a necessary legal requirement that you must comply with.
Office Address and Paperwork
For the registered office, you will need to find a suitable address. Once you have the registration details, you can proceed to open a bank account. The physical address is mentioned on some paperwork, but it is often not a significant issue as long as it is required by the relevant authorities. In my experience, I did not receive any physical mail, despite the requirement.
Time and Process
For my setup, the entire process took approximately one month. I signed for the registered office address on a Monday, completed the registration forms online the same day, and received the registration information on Thursday. The longest part of the process, due to a UK bank’s inefficiency, was paying the required fees, which took nearly three days. I opened the bank account on the next day, and everything went smoothly. However, I still needed to collect the bank card during one of my trips to Estonia.
Regular Check-Ins
Although being in Estonia every three to four months is not necessary for running the business, it is often preferred for regular check-ins. You may need to meet with the registered office provider, who is also the accountant, every three to four months. They offer helpful advice via email and during in-person meetings.
Conclusion
Starting an Estonian company through the e-Residency program is a straightforward process with many benefits. By following the steps outlined in this guide and considering the additional factors mentioned, you can successfully set up your business in Estonia. If you need any assistance, services like LeapIN are invaluable for streamlining the entire process. Estonia’s commitment to digital governance and seamless business operations makes it an attractive choice for entrepreneurs worldwide.
Frequently Asked Questions
Q: How long does it take to get the e-Residency card?
A: The application process typically takes several weeks, with the actual card being collected at a consular office.
Q: Can I open a bank account without being physically in Estonia?
A: No, you will need to go to Estonia to open a bank account, as the banks require in-person verification.
Q: What is the tax withholding requirement for company profits?
A: You are required to withdraw 25% of the tax from the first euro of profit you distribute as a director or shareholder.
Q: Is being in Estonia every three to four months necessary for running a business?
A: No, but it is recommended for regular check-ins with the registered office provider, who is also the accountant.