Today we’ve chatted with Alex Wellman, Head of Marketing at e-Residency to understand the benefits for freelancers to apply for e-Residency.
Here is what he told us.
Estonia is the first country to offer e-Residency, a government-issued digital ID card that allows entrepreneurs to register an EU company fully online. Despite being the first country to offer this, in a way, it’s actually nothing new. Estonia is known as one of the most digital countries in the world and has been developing digital services for its citizens and residents for over 20 years. Starting in 2014 however, the country decided to make many of these digital services available to other people around the world by launching e-Residency. Since then, over 48,000 people from 160 countries have applied for e-Residency and established 5,000+ companies in Estonia.
E-Residency has been popular with freelancers and entrepreneurs from outside of Europe, but the programme is increasingly growing in popularity with European freelancers as a way to simplify company management and reduce paperwork, especially if they are highly mobile.
After completing the online application form and paying the state fee of 100 euros, you will go through a background check process and, if approved, need to pick up your e-Residency digital ID at one of Estonia’s embassies or consulates around the world.
Once you have your e-Residency digital ID card in hand, you can immediately access services in Estonia, including the ability to register a new company entirely online. Although you can do most of this on your own, the majority of e-residents work with a service provider in Estonia that can help with everything from providing you with the required virtual office address in Estonia to helping you with accounting. A list of service providers that have experience working with e-residents is available on the ‘Run a Company’ section of the e-Residency website.
Companies registered in Estonia, whether it’s by a citizen, resident, or e-resident, can be managed entirely online. This means if you need to sign a new contract with your accountant, you can sign it digitally using your digital ID card, with no need to scan a paper document.
This is why e-Residency works well if you are a freelancer (or digital nomad) planning to frequently move.
E-residency is not tax residency and Estonia is not a tax haven. Your company will likely be a tax resident in Estonia, but if all of your work is done in another country, you might also need to pay your corporate taxes there due to permanent establishment rules. As e-Residency does not offer personal tax residency in Estonia, you continue to pay your personal tax obligations in the country of your primary place of residence.
Tax obligations vary widely depending on your individual circumstances, so the Estonian tax board has offered some basic advice on our blog, and we always recommend consulting a qualified tax professional for more detailed advice about your personal situation.
The e-Residency programme has a number of resources available to help you learn how you can run a location-independent company in Estonia entirely online. You can visit our blog for a detailed guide on the entire process and read stories of other freelancers, check out our Run a Company page for a list of service providers offering everything from digital business banking to accounting services, and subscribe to our YouTube channel to watch our latest explainers.
Right now, e-Residency offers a great way for freelancers to easily set up and manage a company entirely online, but the programme is not stopping there. We are developing new tools and platforms for e-residents to network and do business with each other and with people in Estonia. The team is also working with the private sector to launch new partnerships and make more services available to e-residents, including a bigger range of fintech banking providers and financial tools.
Finally, the e-Residency programme is seen as a significant opportunity for Estonia, so you can be sure that by applying for e-Residency and establishing your company in Estonia, you will be part of a country and business environment that is committed to helping you succeed as a freelancer and entrepreneur.
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