Estonia has made a considerable effort to be a favourable target country where to incorporate a company. Estonia holds a world record in the fastest online business registration. The favourable tax system of the country is one of the most liberal ones in the whole world and thanks to the wide-scale spread of internet and e-services running a business is possible without entering the country not even once.
Saving money is probably one of the reasons why you wish to incorporate a business. Estonia is a favourable target country where to save on taxes, as the unpaid or reinvested profit has been taxed with rate 0%. This is especially profitable for the companies which grow fast or are involved in trade. Also, the dividend payments made to the non-residents are tax-free since 2009. Read more about simple and favourable Estonian tax system here: Tax advantageous "onshore" jurisdiction.
Considerably high labour taxes could be considered a weakness of the tax system. When planning to hire local employees you should take labour taxes into account, social tax with the tax rate of 33% being the most significant. Thereby the salaries in Estonia are in average 2-4 times lower than in the countries of Scandinavia or Western Europe.
Regardless of lower salaries Estonia has a lot of qualified and highly educated labour. Approximately 90% of the Estonian labour has acquired secondary education and about 50% of IT-specialists have higher education. For example, Estonians are also among the founders of Skype and Transferwise. More than half of the labour also has a command of at least one foreign language. In Estonia it is possible to freely communicate in both English and Russian languages.
Specialists, modern technology and IT-solutions have created a real e-state out of Estonia. Estonia has the world’s second best public wifi and more than 80% of the citizens use actively ID-card to access e-services and national databases. For example, 95% of the persons submit their annual tax return in internet and this takes only a couple of minutes in general.
Thanks to e-residency the Estonian e-services can be also used by non-residents. As an e-resident you can sign documents and contracts digitally, register a business in internet and declare taxes. And this all without entering the state not even once.
We believe that Estonia is a good place to incorporate a business. If you think so too and need professional assistance for starting a business in Estonia, tax advisory or require a local address, see more how we can help you here: Services.
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Jan 19, 2018