Opening an Estonian Company While Living in Spain: ¿Is It Possible?

Silvana Lucido
31 July 2023
Opening an Estonian Company While Living in Spain: ¿Is It Possible? | Companio

Do you dream of savoring the Spanish lifestyle with the benefits of running a company in Estonia? It might seem like a fantasy, but it’s entirely within reach.

In this article, we’ll delve into the advantages of having an Estonian company while residing in Spain.

We’ll explore the requirements and essential aspects to consider if you’re contemplating establishing your Estonian venture from the sunny shores of Spain.

Managing an Estonian Company While Living in Spain: How to Do It?

Yes, you read that right – opening an Estonian company while living in Spain is possible. But how can you achieve this feat?

The answer lies in e-Residency – a revolutionary digital identity granting access to Estonia’s digital administration.

With e-Residency, you can manage your business from anywhere, even if Estonia isn’t your country of residence—no more enduring endless queues or frequent trips to physical offices.

You can handle numerous business procedures from the comfort of your home, Airbnb, or coworking space, including signing documents and opening a bank account.

The process of obtaining an e-Residency is straightforward and swift. Almost all formalities are done online, except collecting your e-Residency kit (containing your e-Resident card and PIN codes), requiring a personal visit to a designated pickup location.

Once you have your e-Residency, you can register your company in Estonia. Moreover, Companio simplifies the process further by allowing you to initiate the setup without requiring e-Residency.

Notably, opening a bank account for your company is also a breeze, as you can do it 100% online using digital solutions.

Advantages of Running an Estonian Company While Living in Spain

The benefits of having an Estonian company while living in Spain are compelling.

On the one hand, you get to savor the exquisite Spanish lifestyle, enriched by its quality of life, delightful gastronomy, and warm Mediterranean climate. It’s no wonder many online entrepreneurs choose to establish their residence here.

On the other hand, you unlock the benefits of opening and managing a company in Estonia through e-Residency:

  • A fair and transparent tax system: Estonia’s tax system is designed to support digital entrepreneurs. Reinvesting your company’s profits allows you to avoid taxes on those earnings, providing you with a competitive edge.
  • Effortless online business setup: Obtaining e-Residency might require a little time, but setting up and registering your company is swift and straightforward. Companies like broke the world record and created their company in 15 minutes and 33 seconds.
  • Minimal red tape: All business procedures can be done online, minimizing paperwork and bureaucratic hurdles, except for the e-Residency kit pickup.
  • An active entrepreneurial community: e-Residency boasts a vibrant community of over 100,000 entrepreneurs regularly engaging in networking events. Connecting with like-minded individuals becomes effortless, fostering growth and collaboration.
  • A trusted European company: Estonia’s reputation for business excellence stems from its transparency, low corruption levels, and strict adherence to laws and regulations.

Opening an Estonian Company While Living in Spain: Is It for You?

While the e-Residency program offers incredible opportunities, it may not be the best option for some businesses.

Three scenarios where we don’t recommend opening an Estonian company from Spain include:

Physical establishment needs: If your business needs a physical office or permanent facilities outside Estonia, you’ll be considered a tax resident in Spain.

Dealing with physical goods: A physical presence in another country might be required if your business handles physical goods, such as import/export or warehousing. Nevertheless, dropshipping or Amazon FBA businesses are viable options.

Tied to geographic location: If you’re the sole memkber and a tax resident in Spain, it might be presumed that 100% of your business activity occurs there.

However, the European Directive on tax avoidance of January 2020 allows you to live (and be a tax resident) in any European country and manage your Estonian company online from there without the need to be a digital nomad.

It is possible as long as you meet certain conditions, such as engaging in an economic activity that is considered substantial in Estonia, which you can prove, for example, through your human or material resources. In this case, your company will be regarded as a tax resident in Estonia, even if all members of the board of directors live in a specific country.

And what about coworkings? Are they considered offices or company establishments? Initially, renting coworking spaces for no more than 6 months is advisable. In some other countries, adhering to this 6-month rule is sufficient.

However, in Spain, there is a risk that the tax authorities might perceive the coworking space as your permanent establishment if you try to declare these expenses as deductible. In other words, you can rent a coworking space, but it’s better to avoid declaring this expense.

You can find more information in this article.

From Buenos Aires to Madrid: Cristian Larrosa’s Story

Meet Cristian Larrosa, a well-known name in the world of music.

As a musician/composer and a valued Companio customer, Cristian Larrosa took his passion for music to new heights by establishing Larrosa Music Group.

This consultancy specializes in developing innovative music business models and providing guidance on financing technologies like Blockchain and Artificial Intelligence. In addition to running his record label, Cristian offers valuable education and resources for aspiring music entrepreneurs.

Thanks to his Estonian company, Cristian’s reach expanded globally. With a thriving team that spans borders, he manages his business while enjoying the vibrant atmosphere of Spain’s capital, serving clients from all corners of the world.

Estonia: Your Gateway to Success from Spain

Leaping into international entrepreneurship requires advice, and that’s where a local tax advisor becomes invaluable. By consulting with them, you’ll understand your situation and if opening a company in Estonia is your best choice.

If you embark on this exciting journey of opening your company in Estonia while enjoying the Spanish lifestyle, Companio is here to simplify the process.

In addition, Companio One Spain assists freelancers in Spain. We provide essential information for your Spanish tax declaration, allowing you to focus on expanding your business and achieving your goals.

Discover how Companio One Spain can support your entrepreneurial journey by booking a free video call with our expert tax advisor today.

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