Become an e-Resident and open up your EU company hassle-free
Thanks to the Estonian government issued digital ID called e-Residency, foreigners, including Brazilian nationals, can set up an EU company fully online without ever setting foot in Estonia.
Note that e-Residency is not a living permit, it is merely an identification tool, which lets you access the Estonian government e-services online.
You can apply for e-Residency online here, and after your application has been approved you will get more info on when you can pick up the e-Residency card. Because this digital ID is a government issued document it needs to be collected from an official pick-up location assigned by the e-Residency office. In Brazil you can pick up your e-Residency card from São Paulo. This whole process takes 3-8 weeks.
Once you get the e-Residency card you can set up as many companies inEstonia as you like with multiple shareholders from different countries. The company set-up can be done fully online, and you do not have to travel toEstonia to do so.
E-Residency was successfully established in 2014 already has a community of over 90 000 e-Residents from 140+ countries. The e-Residency office also hosts yearly gatherings for e-Residents. You can keep an eye out for those in their events calendar.
When is Estonia the best jurisdiction for you?
Estonian legal entity is great for you if you want to establish and manage your company fully online and remotely and optimize your taxes. Let’s look at these points in more detail:
- Fast company formation online
Once you have thee-Residency card the company incorporation can be done in a matter of hours. In2022, Estonia broke the world record for the fastest company registration ever: in 15 minutes and 33 seconds!
How it works? Your chosen service provider inEstonia, such as Silva Hunt, would fill out the company registration form online and after that you would need to provide a digital signature to confirm all the info. The business registry takes a maximum of up to two working days to insert your company into the business registry.
It is much cheaper and easier to form a company in Estonia than in most EU countries, such asGermany, France or Spain. The minimum share capital contribution is 2500€ and can be postponed (only minus is that you can't pay dividends as long as youhaven’t paid it). However, in 2023 the requirement to pay the share capital will be lost entirely.
- Managing your business remotely
There is no need to visit any tax offices. If you start the process online, it means the process will also end online! With an Estonian company you can submit the annual report online and declare taxes online.
As a non-resident you can set up an Estonian company without having an Estonian as a board director or without the need to hire any staff or rent an office in Estonia. The only thing you need is a legal address and a contact person service, which certified service providers, such as Silva Hunt, can help you with.
This address and contact person service is needed for forwarding and receiving any procedural documents or letters of intent addressed to your business. The contact person does not hold any decision-making power over your company, it is simply a service which enables you to receive all the official documents. Here is a good article about how to choose a great service provider.
- Optimising youron taxes
For the 9th year in a row, Estonia has the best tax code in the OECD, according to the freshly published Tax Competitiveness Index 2022!
The biggest difference between Brazil and Estonia is that Estonia doesn't have a corporate tax on undistributed profits. Neither does Estonia have a different taxing system, on the national, municipal or province level. Instead, Estonia taxes you with a flat rate of 20% income tax only when you decide to distribute your profits such as paying dividends. This is especially beneficial if you want to grow your assets inside the company. This enables you to reinvest the money tax free.
NB! Note that, Estonia is not a tax haven. We have a transparent business environment, where all the company's ultimate beneficial owners can beseen, and annual reports can be accessed by everyone in the business registry.
Which kind of businesses benefit the most from a company in Estonia?
In general, there are 3 business cases that benefit from a legal entity in Estonia. These are usually: people leading a nomadic lifestyle, who wish to have a location independent business; businesses that would like to expand to the EU; and investors who'd like to form a holding company to grow their assets in a simpler and more reliable business environment.
1. Digital nomads
Most digital nomads provide online services, which enables them to travel and be location independent. Thanks to e-Residency, it is also possible to manage your company fully online. In addition, if you don't have a personal tax residency, then you could end up paying yourself a tax-free salary, since Estonia doesn't tax your salary when you don't physically work here.
2. Businesses who like to expand to EU
Are you in e-commerce and interested in targeting the European market?
As an e-commerce company you can get a VAT number and the EORI number all online with the help of a service provider such as Silva Hunt. If you want to serve clients from many different EU countries then collecting VAT from different countries has been made easier with the OSS system, you can read more about it here.
Forming a company in Estonia also makes sense for startups who are targeting global markets. Estonia has the most unicorns per capita in Europe, so far there has been 10.
Because Estonia is a small country it is easier to get in touch with decision makers and get support from local accelerators and government initiatives such as Startup Estonia. If you want to move your operations to Estonia at some point, there is an option to apply for the Startup Visa.
When it comes to funding you can then get access to EU grants when having an Estonian entity. There is a great article about these opportunities here.
3. Holding companies
It is very useful to separate your assets from your active businesses to avoid any unnecessary losses in your investments. However, it is very difficult to avoid complicated bureaucratic procedures when setting up a holding in Brazil. To remove the hassle, the easiest option would be to form a holding company in Estonia. This is especially beneficial when we consider Estonia's taxation law, which says that profits are only taxed when dividends are taken out. That helps to grow your investment money even faster, especially if you are not a trader but along-term focused investor.
In addition to the usual stocks and bonds, your Estonian holding can also hold crypto investments or intellectual property, such as a patent of software algorithms in the EU or valuable databases you sell to a client.
How to get started?
In order to comply with the Estonian accounting rules and to be aware of the newest changes in business legislation, you need a trustworthy service provider like Silva Hunt to guide you through the process and keep you informed about everything related to your business. Silva Hunt provides the contact and legal person service inEstonia, helps with accounting, tax & legal aspects and brings together a community of experienced entrepreneurs to learn from each other and grow together. Find out more about Silva Hunt's services here.