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A short guide to the advantages of the Estonian business market
What comes to your mind when someone mentions Estonia?
Leaving aside efforts to remember where it is on the world map, your thoughts most likely come down to Skype. But did you know that at least one of the apps you have on your phone probably originates from Estonia?
Over the years, Estonia has drawn more and more attention as a prominent European entrepreneurial hub.
And for good reason!
In this blog article, our company is happy to shed some light on the main benefits of the Estonian ecosystem that await every enterprising businessperson.
Estonia’s entrepreneurial spirit
Speaking of the Estonian business environment, it would be hard not to emphasise the country’s advanced business infrastructure as well as the economic freedom the Estonian government gives to entrepreneurs. Moreover, hosting European and NATO cyber security centres, Estonia provides security and status and offers ample fintech opportunities in the business sector.
The startup “bloom” taking place in Estonia demonstrates the very favourable conditions of the Estonian startup scene. The sustainability of the market and friendly regulations attracts both smart people and smart money. As Estonia is part of the European Union, entrepreneurs can take advantage of EU funding and banking. Estonian startups have enormous opportunities for raising money.
Plus, the startup ecosystem in Estonia is filled with mentors and mediators so-despite some healthy competition — finding qualified incubator and seed accelerator should not be a problem for legitimate business plans. The Estonian tech and commercial talent pool are the envy of many. Indeed, the low risk and startup costs afford ample opportunities in Estonia’s business ecosystem: so much so that nearly every Estonian you meet has a startup or tried their luck in the startup scene.
Estonians are generally pretty humble, except when it comes to speaking with pride about our startup unicorns! A quick reminder that this country with its population of 1.3 million is home to 4 billion-dollar unicorns: Skype, TransferWise, Playtech, Bolt. You’ve probably also heard of Monese, Pipedrive, and Skeleton Technologies… and we may continue endlessly, but let’s get to the business and consider the main advantages of starting a business in Estonia.
Taxation is one of the most important aspect when choosing a location for a business. Estonia offers one of the world’s most favourable tax systems for startups and small businesses.
To start with, in Estonia income tax is 0%, which means there is no need to pay corporate tax on income earned. Instead, corporate taxes are paid distributing company profits — for example when paying out dividends to shareholders — or other taxable payments.
It’s important to be aware that if you actively manage your company from another country, such as your country of residence, then it’s likely that the condition of permanent establishment will arise and create a taxable presence for your company outside of Estonia. But don’t worry — your company won’t have to pay tax in two countries thanks to the numerous treaties for the avoidance of double taxation that Estonia has signed with other countries.
Regardless of your situation, we strongly recommend consulting with a business service provider to determine your company’s tax obligations.
The first of its kind
It’s human nature for people to keep looking for routes to make life way easier.
When Estonia launched the first e-Residency programme in the world in 2014, it was no exception.
In case you haven’t heard of it, here are the basics:
Simply put, e-Residency provides a digital ID to users, which allows them to log into different online services in Estonia, such as online banks and government portals. The primary motivation to apply is to create and run an EU-based company 100% online. This gives entrepreneurs from all over the world the opportunity to run a business remotely.
Not everyone needs e-Residency. But it will be extremely useful in case you want to start and run a business in Estonia, where 99% of services are available online. E-residency will help those who are not Estonian citizens but want to enter or invest in the Estonian market.
We should mention though that e-Residency is open to all individuals, no matter where you’re from — and the programme welcomes fans of Estonia and e-Residency to its growing community as well!
Hurry! Join the nearly 80,000 entrepreneurs who have already joined the digital nation, many of whom are successfully developing their businesses in Estonia with e-Residency.
Banking for your Estonian company
Setting up a bank account for your Estonian company is possible but is still a process, so don’t try and do it alone. Your chances of obtaining a business bank account are heightened if you get help from an experienced service provider who knows the process and requirements.
Put together, all of the above-mentioned benefits make the Estonian business market incredibly innovative and agile, and full of talent, entrepreneurial spirit, and enthusiasm. We believe doing business in Estonia is unique and rewarding and we invite you to experience it digitally thanks to e-Residency.