A company can be registered in Estonia remotely using the e-Residency card (no need to visit). Having an e-Resident card, a legal address, and a contact person in Estonia is necessary for setting up a company in Estonia. Please submit the following application to establish a company with an e-Resident card:
Company Formation with e-Resident Card
E-residency in Estonia
Estonia is a small country in Northern Europe. Estonia is one of the smallest countries in the European Union, Eurozone, NATO, OECD, and Schengen, with only 1.3 million people living there today.
In spite of this, Estonia dominates the field of digital control and was the founder of Digital 5 (D5). A new concept called e-Residency was introduced to Estonia in December 2014. Freelancers, business owners, international partners, and other non-residents related to Estonia will benefit from the e-Residency program primarily for ease of living and doing business. Starting a business, expanding your business, making investments, or studying in the European Union is possible with e-Residency in Estonia.
Company formation with an e-Residency card
What is e-residency?
E-Residency is a state-issued digital identity and a paperless business environment that allows citizens to access Estonian e-government services. Estonian citizens not living permanently on the country’s territory that wish to access the country’s and the EU’s e-services may obtain an E-Residency from the Estonian government.
A variety of government ministries and institutions are participating in the e-Residency program, which has been established as a nationwide initiative. The biggest advantage of being an e-Resident is that they can access electronic services throughout the EU without restriction, due to the fact that Estonia is a member of the European Union.
As a physical identity card, the e-Resident ID not only does not confer Estonian citizenship, but also does not grant entry into the EU to its holder. The benefits of e-Residency include tax exemption.
A digital entrepreneur can set up and manage a business in the EU from anywhere in the world with an Estonian e-Residency. Over 94,000 people from more than 170 countries have applied for e-Residency as of October 2022, creating over 22,000 Estonian startups. E-Residency kits are personally delivered to applicants at one of the authorized points of issue after the application is submitted remotely with the payment of a state fee of 265 EUR. Obtaining an e-Resident card is one of the services we offer our clients at Company in Estonia OÜ.
First look at doing business in Estonia with e-Residency
- An entirely online process for forming and managing businesses
- From anywhere in the world, you can start and run a business
- Document signatures and verifications in digital form (contracts, annual reports)
- Signed documents are encrypted and transmitted securely
- Bank transactions in Estonia through online banking
On the Internet and in the labour market, Estonia can maintain a transparent and reliable business environment through general access to information about Estonian companies. In addition, basic financial statements and ownership information are available to the public.
E-RESIDENCY: WHO BENEFITS?
- Digital Nomad:
- While traveling, you can start a paperless business.
- Build an European Single Market-accessible company.
- Start-up Founder:
- Take advantage of the EU start-up funding and clientele to grow your business.
- Digital Entrepreneur:
- Without unnecessary bureaucracy or personal presence, enter the European Single Market.
For a digital entrepreneur, location independence is an indisputable advantage of e-Residency. You can operate your business 100% remotely from anywhere in the world, and you won’t have to establish your company again if you move abroad at any time.
Europe’s vast market will provide new opportunities for your company to grow. The resident e-card will enable you to register a company in the EU without having to physically attend the registration process. Paying online with providers such as PayPal is now possible without appointing a local director.
It has never been easier to develop an online business using the software on your computer. Send digital documents by signing, authenticating, encrypting, and signing. You can also file your tax declaration online. As a result, you will now be able to access the European Single Market and its cross-border financial services.
Embrace globalization now. Building connections with service providers will be easier through online collaboration with e-Residents in over 170 countries. Your company will be able to grow in limitless ways thanks to the global community of e-Residents.
FREQUENTLY ASKED QUESTIONS
Sadly, no. Unless you are a citizen of the European Union, travel to Estonia or within the EU does not require a visa for electronic residents. e-Residency cards cannot serve as visas for travel since they do not contain photos. E-Residency is not a replacement or a way to work or stay in Estonia or the EU.
Applicants residing in Estonia, with employees who reside in Estonia, or carrying out financial activities in Estonia may be eligible for opening an account at a bank in Estonia. Visit this page to learn more.
As a rule, the entire process from application to picking e-Resident card up takes from 4 to 6 weeks and only the applicant can collect it. Alternatively, you can find the Estonian Embassy or Consulate in the country where you are. Upon receiving your card, you will have to pick it up within six months. A fingerprint will be required for authentication and verification of your identity in order to receive your e-Residency card. Neither the Estonian Embassy nor Consulate can provide an e-Residency kit to the other person.
It is not necessary. You are not a tax resident of Estonia just because you have an electronic residency. If you are a tax resident in a country, you must pay personal income tax there regardless of your e-resident status. Understanding the difference between e-Residency and Estonian residency is essential. In contrast to an e-Residency, an Estonian residency is a physical status with social obligations and benefits.
Due to Estonia’s e-services, e-residency can make paying taxes more accessible despite the complexity of international taxation. It will be possible for the e-resident to declare all taxes online if there is an obligation to pay corporate tax in Estonia.
A monthly income tax calculation in Estonia is carried out after distribution of profits (such as dividend payments). It is estimated that the corporate income tax rate in 2020 will be 20/80. A regular dividend payment is taxed at a lower rate of 14/86. The additional income tax of 7% is withheld from dividends paid to individuals with a reduced tax rate. Tax rates are reduced for resident companies to 14/86 (16%):
- The resident company pays income taxes on one third of the profits distributed in 2018.
- The resident company will pay income tax on a third of the profits distributed in 2018 and 2019.
- E-residents with companies in Estonia will also have to pay 20% of income tax on Board Members’ fees in addition to corporate income tax.
Upon expiration of the e-resident card, you will be unable to access e-services and services provided by the Republic of Estonia.
Pick-up locations for e-Residency kits:
|Estonia||Tallinn, Narva, Tartu, Pärnu|
|Russian Federation||Moscow, Pskov, St. Petersburg|
|United States of America||Washington, San Francisco, New York|
IMPORTANT! Starting from August 26, 2020, pick-up points in Washington DC, San Francisco, Seoul, and Tokyo are temporarily unavailable.
E-RESIDENCY KIT: HOW DOES IT WORK?
A USB digital card reader is used to authenticate the applicants’ smart cards with PIN codes and chips. ID-software must be installed for identification. As a result, Estonian state institutions and the private sector provide e-services to e-Residents using ID cards, PIN codes, and card readers.
Digital signatures can be added to official documents using the ID-system. Due to Estonia’s digitalization, electronic residents are able to sign contracts and interact digitally with most government agencies and companies, eliminating the need for physical presence.
WHAT IS THE ELIGIBILITY TO BECOME AN E-RESIDENT?
The following criteria must be met to qualify for e-Residency in Estonia:
- Estonian electronic services are of reasonable interest.
- A foreigner without a residence permit in Estonia or an Estonian citizen.
PROCESS OF APPLICATION STEP BY STEP
STEP 1. Gather all the necessary documents
- Your travel document must be an image of a government-issued ID. The same document that was used in the application form must be brought with you when you pick up your ID-card. A copy of your travel document, as well as the document used in your application, should be brought if your travel document expires before you receive your e-Resident card.
- It will be necessary to upload a digital photo that is passport-sized. Our recommendation is that you double-check the photo requirements before taking a photo at home.
- In your motivation statement, explain the reasons for your interest in e-Residency. If you have any past business experience or future business plans, mention something noteworthy.
- Visa or MasterCard are the only credit cards accepted for payment of government fees.
STEP 2. Applications must be submitted
The application must be filled out online. You are required to complete and submit an application yourself according to Section 112 (2) of the Identity Documents Act. Application submissions through intermediaries (such as law offices and other service providers) are not permitted.
When submitting your application, you will be asked to select a pickup location. Changes to this can be challenging later, so make sure you choose wisely.
STEP 3. Review of the application
It takes about 4-5 weeks for the review process to be completed. As part of the background check, you will be contacted by email for additional information. Once approved, your e-Residency kit will usually take 2-5 weeks to complete and be delivered to the location where you can pick it up.
STEP 4. The e-Residency kit must be collected
You will receive an email with instructions or an invitation to the pick-up location once your e-Residency kit is delivered to the pick-up point. It is important that you are aware that your fingerprints will be taken. It is important to collect the eResidency kit within six months of receiving it. We will send the document back to Estonia and destroy it if it is not returned by the deadline.
Pick-up location change
With Covid-19 complicating international air traffic, you have the right to use this option in finding an appropriate location to receive your e-Resident card. Contact the Estonian embassy in the country where your document is being sent in order to redirect it from one embassy to another.
Additional state fees must be paid before changing the point of issue. Visit the Estonian Ministry of Foreign Affairs website for more information about the process. You will be charged an extra 80 EUR when you change the Estonian embassy where your card will be picked up. A charge of 30 EUR will apply for changing the pick-up location to the Estonian embassy from the Estonian service point.
DO I HAVE TO RE-APPLY FOR AN E-RESIDENT CARD BEFORE IT EXPIRES?
Due to travel restrictions caused by Covid-19, using the Smart-ID platform is your best option if your e-Residency card expires soon. An independent organisation (SK ID Solutions) provides this authentication service.
e-Residents can create a Smart-ID account using their valid cards, and even after their e-Residency expires they can access the usual e-services. Until new e-Resident cards are available, Smart-ID can be used to manage your business and use electronic government services.
HOW TO OPEN A COMPANY IN ESTONIA WITHOUT E-RESIDENCY
Alternatively, Company in Estonia OÜ can assist you in opening a company in Estonia through a visit or through a power of attorney if you are not eligible for becoming an e-Resident. Our lawyers are able to act on your behalf if a company is established by power of attorney. No electronic residence permit card is required, or you have to come to Estonia to do this. In general, it takes about a month to establish a company by proxy. Our consultants can provide you with more information.
HOW TO videos
HOW TO useyour e-Residency Digital ID-Card (DigiDoc4 version)
HOW TO Register a Company
HOW TO Choose an e-Residency Service Provider
HOW TO Use Estonian e-Services
HOW TO Business Banking Basics
e-Residency Tax Basics