Learn and Level Up

Basics

We set up entrepreneurs in the fully digital, business-friendly legislation of Estonia thanks to its e-Residency Program. This innovative program allows entrepreneurs from all around the world to become e-Residents and launch their companies online, without notaries or even visiting Estonia. As an e-Resident, you will receive a digital identity issued by the Estonian government contained in a card that allows you to sign legally-binding documents digitally.

This is the card you will use to sign the incorporation of your business in Estonia.

Hence, all members of the company need to become e-Residents. The application process takes 3-4 weeks on average, and the card is issued to your pick-up location of choice. You can read more about it here. You can start the process of launching your business with us even before you apply for e-Residency, but the last step of the registration, signing the application in the e-Business registry, can only take place when all the members of the company have their e-Residency cards.

In summary, the best way to get started is to apply for e-Residency as soon as you’ve signed up with us.

Our mission is to empower entrepreneurs to set up their businesses online and run them from anywhere in the world. To reach this goal, we use the pioneering e-Residency program of Estonia. The program allows any entrepreneur to become a member of the Estonian digital nation and get an identity from the Estonian authorities. This identity can be used to establish your business and run it completely online.

To benefit from this program, then, all members of the company (including shareholders and members of the board) must be e-residents.

Yes, although depending on your activity, you may need a license. Hence, it is very important to understand the activity of your company. There are, generally speaking, two scenarios:

Scenario 1

Your company is going to perform one or more of the following activities by itself:

  • Foreign currency exchange (or forex)
  • Providing investment advice to clients
  • Performing borrowing or lending operations
  • Performing Leasing transactions
  • Money broking or acting as a broker
  • Offering monetary guarantees or commitments
  • Performing transactions or acts related to the issue and sale of securities
  • Offering services of safekeeping and administration of securities
  • Acting as a savings and loan association

In that case, you need the FFA license. In this scenario, it’s considered that the activity is being performed by the company, not by means of external brokers. If you are performing money broking activities, but just for your company, and through an external broker, you are in scenario 2.

Scenario 2

In this scenario, your company is not performing any of the activities mentioned before by itself. It’s using an intermediary, broker or agency with the proper license. In that situation, you don’t need the license.
Here, it is key that your company is doing these activities for itself, not for other customers. If you are offering foreign exchange services to other customers, even if you use a broker, or you are offering financial advice, you should get the license in order to avoid problems with the financial authorities.

What license do I need and how much does it cost?

If the activities of your company fall in scenario 1, you need the FFA license. In order to obtain it, you will need to contact a legal firm in Estonia.

In order to benefit from the e-Residency program and be able to run your business online, all members of the company (shareholders and members of the board of directors) must be individuals (not organizations) in possession of their e-Residency cards.

Otherwise, you won’t be able to incorporate your business or manage it online. Registering the company, and any other procedure involving your business, would require a visit to Estonia and the intervention of a notary without the help of the e-Residency Program. Therefore, we only accept natural persons who have obtained their e-Residency IDs.

However, once the company is established, your company can accept other corporate shareholders. This is especially interesting for funding and getting investment, either through business angels or venture capital firms. The redistribution of shares during the investment process can be done online under certain conditions. More information here.

In Estonia, unlike many other countries, a business can perform multiple activities simultaneously without additional paperwork or having to open multiple companies. The Estonian Business Registry asks you to define the main activity of the business for statistical reasons only.

That said, there are occasions where it may be advisable to have two companies. This is especially true when company activities are completely unrelated, or subject to different tax regimes, such as dropshipping / FBA companies or travel agencies.

Your company needs an intra-community VAT number if any of these conditions apply:

  • First, if your company offers services such as development, design, consulting, marketing, etc., to European customers, and its earnings exceed 40,000 euros a year.
  • Also, if you offer digital services or products (software or digital content) to European B2C customers (final consumers) from the first sale.
  • Finally, if you offer digital services or products (software or digital content) to European B2B customers (business to business) from the first sale, and you enter more than 40,000 euros a year.

Should I apply to get my VAT number?

Even if none of the conditions above apply, we recommend you to obtain your VAT number if you are dealing with other European customers or business partners.

For starters, it allows you to operate more easily in the European Union. In addition, the VAT number offers trustability about your company to your customers and suppliers. Finally, it is also very useful to avoid VAT to be added to the invoices received from other EU companies. More information here.

How do I apply?

That’s the best part, we will do it for you. To do that, we need your company to have a European bank account (with a European IBAN) and some information about your business, including its activity, source of revenue and expenses, a detailed description of how the business operates, who are your customers, and how do you find them.

With all this information, and as part of the incorporation process, we will apply for the VAT number of your company.

Yes. Estonia is proud to have the most transparent business system in the world. All registration information of your company will be public and can be consulted by anyone on the internet, including:

  • Company name
  • Registry number
  • VAT number
  • Legal address
  • Public email and contact numbers
  • Company members, names, surnames, and nationality, including shareholders and directors
  • Taxes paid in each fiscal year

Shareholders are the individuals or entities that own company shares, giving them control over that company. The members of the board don’t control the company (unless they are also shareholders), but they make the day-to-day decisions of the business. In a startup context, a board member may be the CEO, CTO, or CMO. Learn more about these roles – and how they relate to your company in Estonia. Learn more.

Yes, although depending on your activity, your business may need a license to operate. In the context of financial activities, there are two main scenarios:

Scenario 1

Your company is going to offer one or more of the following services to third parties:

  • Foreign currency exchange (or forex)
  • Providing investment advice to clients
  • Performing borrowing or lending operations
  • Performing Leasing transactions
  • Money broking or acting as a broker
  • Offering monetary guarantees or commitments
  • Performing transactions or acts related to the issue and sale of securities
  • Offering services of safekeeping and administration of securities
  • Acting as a savings and loan association

In that case, you need a financial license. This scenario assumes that the activity of the business is being performed by itself, not by means of external brokers, and offered to third parties. If your company is performing any of these activities internally through an external broker (for example, investing in the stock market), but not offering services to third parties, you are in scenario 2.

Scenario 2

In this scenario, your company is not offering any of the services mentioned before to third parties and it’s using an intermediary, broker or agency with the proper license. In that situation, you don’t need the license.
Here, the key question is if your company is offering these services to other parties. If you are offering foreign exchange services to your customers, even if you use a broker, or you are offering financial advice, you should get the license in order to avoid problems with the financial authorities.

What license do I need and how much does it cost?

Licenses for financial activities may be expensive and require a complex application process. Our recommendation is to contact a law firm in Estonia beforehand to get a proper estimate.

Closing a company is generally a complex process, more than opening it. This is because the financial authorities have to make sure the business is no outstanding debt, the bookkeeping is in order, and the company has paid all due taxes.

The process takes nine or ten months on average, sometimes even one year. It is necessary to hire a legal firm or a liquidator. The cost varies depending on the legal firm or service provider. We don’t provide this service ourselves.

As part of our services, and subject to a monthly accountancy plan subscription, you get a virtual office for your company. That includes a person of contact and legal address for your company in Estonia.

While this is a physical address, bear in mind that it’s a virtual office. It’s not a office that your company has rented, so you won’t have any utility bills or rental agreement documents. This address will also be shared with other companies.

If you need to rent facilities in Estonia, we recommend you to consult a local real estate agent.

When it comes to your Estonian company, there are several possibilities for hiring employees. Whether you pay contractors or professionals outside of Estonia, or hire Estonian employees, there are plenty of factors to consider. To learn more about complying with local laws – and understanding how to hire company employees – click here.

Some online banks require proof of the company’s address. For a standard company, this normally means an office rental contract or a utility bill.

As an e-resident, with a virtual office, perhaps even traveling around the world, you cannot normally provide any of these documents. However, in this case, online banks understand that for companies created by e-residents, the effective address of the business is the address where the company operates.

This place, which is normally outside of Estonia, corresponds to your current place of residence if you are the only member of the company, or where most of the activity is performed in the case of multiple-member companies. In that case, the easiest thing to do is to show a rental contract of your current place of residence, or a water, electricity, or telephone bill in your name, as director of the company.

Applying for e-Residency is the most time-consuming part of the process:

  • e-Residency application: 2-4 weeks
  • Company registration: 1-3 working days
  • Bank account opening: depends on the bank, 3 to 7 days on average.
  • VAT number: usually 24 working hours

That means that if you start the process today, your company can be ready in 3-4 weeks approximately. If you are already an e-Resident, the process is much shorter, usually taking just a couple of days.

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