E-residency in Estonia PDF

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Essay on Electronic Residency in Estonia (ID 20180904) Estonia is the first country offering such service as Electronic Residency. In this short essay, I will quickly describe how one can get such e-residency, what it means, what are the benefits and limitations of such resident. Electronic residency differs from traditional residency - it is just a digital id card that is available for any foreigner or non-resident of Estonia and allows to access to Estonian public and private government services. It has been on a roll since 2014 and popular among rising professional who call themselves digital nomads e.g. freelancers. In order to get registered, it is enough to submit application online, to provide copy of governmentissued passport, photo, motivational statement and to pay the application fee (Euro 100) on the official website https://e-resident.gov.ee/become-an-e-resident/. After 6-8 weeks, once Estonian Police & Border Guard Board conducts background check, you will be notified and instructed to pick up eresidency kit in Estonian embassy in your country. In Kazakhstan, it is in Astana. There are a number of benefits to e-residency in Estonia. As Estonia is part of EU single market, obtaining such residency allows you to set up a company in Estonia without physical presence and to enjoy access to EU market. If the business can be supported entirely online, then e-residency provides you with digital key that allows you to conduct legal contractual relationships with anyone in EU, access banking and file taxes. Therefore, indisputable benefits of e-residency are ability to setup company that will be recognizable under EU and keep it completely online (no physical company formation is required). This provides great potential to businesses that want to expand trading relationship to and service EU market and enjoy same terms as all other European companies. Although, this means that if you setup company that way you will be also subject to EU regulation and EU market standards. However there are companies that can provide legal and accounting support to those who obtain e-residency. The tax system of Estonia is considered fruitful for growing companies since 0% on re-invested profits. E-residency allows you to enjoy this as long as you do not distribute the profits. If you critically look at the concept of e-residency, omitting obvious limitations such as that eresidency has no correlation to your ability enter the country or EU under special conditions, it leaves with us breaking down some of the tax advantages that seem to come with e-residency. Estonia tax system is not tax heaven; it has 20% corporate income. However, it is important to remember that if you are tax resident in your home country, your income generated under Estonian company can be subject to tax at home too. Therefore, in case of income distribution, you will be taxed in Estonia and eg Kazakhstan (due to DDT between countries, a preferential rate may apply). Besides, if to overview the online banking services available to holders of e-residency, there are three banks that offer complete services. E-residency does not allow you to open local bank account unless you demonstrate strong ties to Estonia (relatives, volumes of business and etc). Also, there are only three banks that serve eresidents. Therefore, the advantage of the legal regime only makes sense if one needs company within EU because their clients or partners require so and can manage it online. Otherwise, e-residency is not that attractive as it is one-sided....