Is Estonian company via e-Residency worth it?

[karim8899]

For a solo freelancer or one who does other type of business solo as well, is Estonian company via e-Residency worth using it?

 

[AMD]

For me it looks like a Gerogia company would be better for you it's easier to get registered and get banking for it looks.

 

[João Silva]

For me it looks like a Gerogia company would be better for you it's easier to get registered and get banking for it looks.

Interesting. Can I open account online or I must travel for Georgia?

 

[Spinat]

You have to sign this PoA and get all done remote if you don't want to travel there. It requires notarizing and apostille and you need to send the original notarized docs to your agent there!

 

[CoffeeCherryTea]

I think one also has to consider how current and potential future clients look at your company. Being able for your client to profit from the EU reverse charge VAT system among EU companies, and for you to evade witholding tax deducted from your pay could be a major factor to consider. And unless one needs a real bank account with deposit protection in Estonia one can now deposit the share capital with approved EMIs like Holvi and Transferwise, hence does not have to visit Estonia. I am waiting for my approved e-residency card, did a lot of reading, hope I got it right. New forum member, be gentle ;-)

 

[karim8899]

I think one also has to consider how current and potential future clients look at your company. Being able for your client to profit from the EU reverse charge VAT system among EU companies, and for you to evade witholding tax deducted from your pay could be a major factor to consider. And unless one needs a real bank account with deposit protection in Estonia one can now deposit the share capital with approved EMIs like Holvi and Transferwise, hence does not have to visit Estonia. I am waiting for my approved e-residency card, did a lot of reading, hope I got it right. New forum member, be gentle ;-)

Will you re-phrase that in a simplier manner? What's your point?

 

[CoffeeCherryTea]

Let me try @karim8899 , with a EU company you get credibility vs. other EU companies, evade withholding tax deduction on your pay and you do not have to charge them VAT under EU reverse charge system. E-Residency does not require you to travel to Estonia, unless you need a real bank account, usually with LHV bank.

Will you re-phrase that in a simplier manner? What's your point?

 

[karim8899]

Understood

E-Residency does not require you to travel to Estonia, unless you need a real bank account, usually with LHV bank.

Real bank account with LHV doesn't require me to travel to Estonia either.

 

[CoffeeCherryTea]

Oh great explain please

Understood



Real bank account with LHV doesn't require me to travel to Estonia either.

 

[CoffeeCherryTea]

"All non-resident clients must visit our branch in order to go through the identification process. " Non-residents · LHV

 

[CoffeeCherryTea]

I think a real bank account at Estonia for e-residency company is not attractive anymore, since one year LHV according to my company formation provider charges €20 account maintenance fee per month!

 

[LisaSimpson]

1/ bank
I think that all the Estonian banks are among the most expensive of Europe. Georgian banks are much cheaper.

2/ VAT
The EU countries are not happy about the actual system. In the future, they want to tax all incoming goods thanks to the post office companies. For example, you order something from Georgia, they would like all the courier companies to collect the VAT. This already happens with UPS and DHL but it should also work for the official courier companies like "la poste" in france

if you have a Georgian company and if you sell digital good to Euro customers no-one will ever ask you to follow the EU rules on the Georgian side. Normally, this should be on the customer side. However, if you have a portuguese customer, no-one will ever be able to ask this portuguese customer to pay VAT.

3/ there is no money exchange controls in Georgia
Georgia - Foreign Exchange Controls | export.gov

 

[JimBeam]

I hink that all the Estonian banks are among the most expensive of Europe. Georgian banks are much cheaper.

Not sure about this...
Have you checked pricing for banks in Switzerland, Lichtenstein or even Cyprus.

 

[LisaSimpson]

i found articles that mention it is possible to avoid opening an Estonian bank account:
Digital Banks For Your Estonian Company

I am skeptical about it because i thought we had to deposit 2500 euros as equity in a bank located in Estonia when starting a business there.

 

[LisaSimpson]

I get the trick. They modified the commercial code of Estonia. You can use a digital bank anywhere in Europe during 10 years and then, you must open a bank account in Estonia and deposit 2500 euros for equity.
https://medium.com/e-residency-blog...ater-freedom-in-business-banking-f8c6984ce3e5
So, in other words, they let you grow and then you are forced to use a, Estonia based bank.

 

[LisaSimpson]

it is possible to avoid opening a bank account in Estonia. You can open a bank account in Finland for instance with Holvi for 9 euros per month. However, after 10 years you will be forced to open a bank account in Estonia with SEB , LHV...
E-Residents | Holvi

 

[LisaSimpson]

Not sure about this...
Have you checked pricing for banks in Switzerland, Lichtenstein or even Cyprus.

Yes, Switzerland and Lichentein banks ask for very high deposit. (I don't remember, i think it is like like 50,000 euros? 100,000 euros? upfront.
Cyprus is ok but it is part of the anglo saxon world. They ask for a letter of recommendation to open a bank account. In my case it is IM PO SS I BLE

 

[JimBeam]

i found articles that mention it is possible to avoid opening an Estonian bank account:
Digital Banks For Your Estonian Company

I am skeptical about it because i thought we had to deposit 2500 euros as equity in a bank located in Estonia when starting a business there.

This is mandatory in every country. In Estonia you can postpone that for up to 10 years.
And if you deposit it right away - it's usable for business expenses right away so no worries.
In Cpyrus it's €5k (but can be also postponed)

I get the trick. They modified the commercial code of Estonia. You can use a digital bank anywhere in Europe during 10 years and then, you must open a bank account in Estonia and deposit 2500 euros for equity.
Estonian companies now have greater freedom in business banking
So, in other words, they let you grow and then you are forced to use a, Estonia based bank.

Again, you have 10 years to do it. You can save €10/month and pay that after 10 years. Don't see any problem with that.
But, again if you you want to payout dividends, you'll have to deposit these €2.5k first before you can make the payouts.

Yes, Switzerland and Lichentein banks ask for very high deposit. (I don't remember, i think it is like like 50,000 euros? 100,000 euros? upfront.
Cyprus is ok but it is part of the anglo saxon world. They ask for a letter of recommendation to open a bank account. In my case it is IM PO SS I BLE

Yes, but we were talking about the prices.
Here's the pricelist of Estonian LHV bank: Price List · LHV and that's probably couple times less than I pay in Cyprus.
Just monthly account keeping fee is €50 in Cyprus vs here is €0 saving you €600/year if you compare to Cyprus.

So I don't see any reason for these complaints at all....

 

[CoffeeCherryTea]

@JimBean With "here" you refer to Georgia, right.

At LHV the yearly cost is €240 for non-residents.

I think with Lithuania in EU preparing e-Residency and Azerbaijan offering it the landscape for e-Residency will offer more choices soon. I certainly would like to see some competition among those countries, with other countries joining in. Mounting competition will hopefully also keep Estonia from implementing some crazy ideas from the Whitepaper for e-Residency 2.0 - like the requirement for e-resident companies to double profit every year ;-) . Some of these ideas have now made it into an action plan, whose content has not been published yet. Time will tell.

 

[JimBeam]

At LHV the yearly cost is €240 for non-residents.

That's €20/month where at Cyprus is €50/month or €600/year + all other costs that are higher than at LHV. And sometimes they do some kind of account checkup that they charged me last time €750 (one time) so that year it was €1.350 just for account maintenance.