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Why entrepreneurs love Estonia- your guide to e-residence, incorporation and offshore banking

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Estonia has recently gained publicity because of its policies aimed at attracting entrepreneurs. In addition to its favorable tax scheme, Estonia is notable for its smart use of technology to simplify and streamline business setup and administration.

For digital nomads, entrepreneurs, and people running non-location specific businesses, there are a number of reasons registering your company and doing your banking in Estonia makes sense.

Benefits of registering your company and doing banking in Estonia

Done correctly, earning your money through an offshore corporation located in Estonia can be a great way to reduce your tax liability (this is different than evading taxes). In addition to the ease of registering and administering your Estonian business from abroad, advantages include:

  • Online tax filing
  • 0% corporate tax on undistributed profits, 20% tax on distributed profits and 20% income tax
  • Simple and clear regulatory and tax framework (see PwC’s tax summary)
  • Remote administration of your business online
  • Increased appearance of legitimacy with an  EU-registered business
  • Digital signing of contracts and documents
  • Ability to hold euro or multi currency denominated accounts
  • Low share capital requirements (2500 EUR) (which start-uppers will love)

How to offshore your business in Estonia and open a bank account

I recently went through the process of getting e-Residency, registering a business, and opening a bank account. It was an extremely simple and smooth process. Here are the four steps:

1) Get E-residency

Your journey to opening a bank account and registering your business begins with applying for Estonian e-Residency. According to their website, E-Residency is a “digital identity available to anyone in the world seeking to administer a location independent business online.” The application is submitted completely online. In addition to asking for your personal information, they will ask what your motivation for registering for e-Residency is. In line with my experience and other e-residents experiences, it is sufficient to say you wish to obtain e-Residency in order to incorporate a business in Estonia and open a euro-denominated bank account.

It is important to note that being an e-Residency does not entitle you to citizenship or actual physical residency in Estonia. The card does allow you to open a business in Estonia and open a bank account. The card can also be used as a digital signature where valid in the EU, to conduct business and send encrypted emails to other e-residents.

Within about three weeks of completing my application, my card was conveniently ready for pickup at the Estonian embassy in my city.

Your card will come in a nice little package like this and comes with a nifty little card reader that plugs in to the USB port of your laptop.

Screen Shot 2016-09-06 at 1.08.34 PM
The Estonian e-Residency digital identity card.

2) Sign up with a virtual office service provider to obtain a legal Estonian address to register your business at. There are a number of options for service providers. I am registered with They have favorable rates and they are extremely responsive and helpful when I contact them on Skype. The entire process of registering with them took less than ten minutes.

3) Registering your business online is shockingly fast and easy. In fact, in 2009 Estonia received a Guinness World Record for “fastest time to register a new legal entity” – just 18 minutes. Within three days, I had confirmation that my business was successfully registered.

4) Opening a bank account was the only painful part in this otherwise smooth online process. Unfortunately, due to anti-money laundering laws, bank accounts must be opened in person. This means a flight to Tallinn, which is usually neither cheap nor direct. I arranged to fly in to Tallinn in the evening and fly out the next afternoon. I was nervous about getting turned away or declined at the bank, so I arranged appointments at all three banks in Estonia that accept the e-Residency card for opening an account: LHV, Swedbank and SEB.

offshore banking and business estonia
Tallinn, Estonia’s historic town center may date back to the 13th century, but the country’s business and banking sector is anything but old-fashioned.

My first appointment was at Swedbank. Having worked at a financial firm before, I am familiar how much paperwork and time can be involved with opening an account. However, I could not have been more impressed by the ease and speed with which they were able to open an account for me. In less than an hour, requiring nothing more than my passport, e-Residency card, and business registration number, my account was open and I could access my bank account online. They required no initial deposit from me. With my business out of the way, I had time to spend an enjoyable afternoon in Tallinn’s lovely historic city center before catching my flight home.

When my debit card was issued a week later, the bank agreed to mail it to my virtual office provider, who then mailed it to me. You should confirm with your bank and virtual office provider that they will do this so you can avoid the hassle of returning to Tallinn a week later to pick it up.

The entire process, from submitting my application for e-Residency to opening my account, took about three months.

Final Thoughts

Beyond the tax advantages of incorporating in Estonia, the main thing digital nomads, entrepreneurs and other young, tech-savvy people will appreciate about Estonia is how the country has embraced the use of technology to simplify and streamline both company setup and administration.

Have any questions? Let me know in the comments below.

For more tips on offshore banking and business setup, follow Thinkstr on Twitter and Facebook!

Soheila Yalpani View All

Soheila is the founder of and the Principal of Oppfinn Consulting. As a project manager and consultant, her interests lie at the intersection of innovation and societal impact. On, she writes about business, technology, travel and smart cities.

15 thoughts on “Why entrepreneurs love Estonia- your guide to e-residence, incorporation and offshore banking Leave a comment

  1. Thanks for this post! Can youalready say about the beauraucracy/accounting of the company? I am seriously planning to do the same.

  2. can you explain bit more meaning of this tax classes “0% corporate tax on undistributed profits, 20% tax on distributed profits and 20% income tax”

    • Hey Bojan, good question: the 20% corporate tax is only paid on distributed profits. So as long as profits are reinvested in your Estonian corporation rather than distributed to shareholders through dividends, no corporate tax is owed. However, as soon as you want to pay yourself via income (20% income tax) or via dividends (20% tax on distributed profits) will apply to you.

      • Hi, one question, you say, “via dividends (20% tax on distributed profits) “, is it 20% corporate + 20% dividends or just 20% corporate + 0% dividends????


        • Hi Asertus, Reinvested profit is not taxed, only the distributed profit is taxed. So, taxation is shifted from the moment when profits are earned to the moment when profits are distributed to the owners of the capital. This means you do not have to pay income tax on the profit from your business on an earnings basis. Instead of taxation on the profit earned, profit distributions (usually in the form of dividends) are taxed at the rate of 20% on the gross amount of distribution. So to answer your question: just 20% on dividends (not 20% corp + 20% dividends).

          This guide from EY has the best explanation of how Estonian taxation works I’ve seen (see pg. 17) if you want more details:$FILE/Doing%20Business%20in%20Estonia.pdf

          Hope that answers your question!

  3. Hi Soheila,

    Great article! Just one thing you wrote is not quite correct.

    In your “Final Thoughts” you’re mentioning that this program is appreciated by entrepreneurs and other young tech-savvy people. Well, I’m almost 60 y/o and the first Dutch E-resident for Estonia. You’re either wrong or you consider me as young (thank you ;-).

    Happy travels!


    • Good point Alex! Paperwork is never enjoyable at any age! Thanks for the feedback and very cool to hear from the first Dutch e-resident!

  4. Hi Soheila,

    We’re also thinking about establishing a company in Estonia, with E-residency ready. However, the website you mentioned that had helped you register your business,, seems not reachable right now (neither web nor email). Do you have any idea if they are still operating?


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