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Can anyone provide any insight on why E-Residency would be good for businesses? How about startups in particular?

If you are e-citizen in estonia you can easily open a company there.

Taxation in estonia is pretty nice since basically the only tax you pay is when you pull money out of the company, not when you sell something, as long as the money are inside the company you don't own anything.

(Of course is a little bit more complex that this, but here is the idea, you need to pay tax if you have employee for example)

Well, you also pay VAT when you sell something. You just don't pay corporate taxes.

Yes, but VAT is not part of your revenue.

IIRC you pay corporate taxes when the profits are distributed, but aren't taxed so long as you keep them in the business.

Also how about sole proprietors contractors/consultants based in another EU country?

If you do not reside in Estonia then, when you extract money, you get to keep 80%, minus the dividend tax of your country of residence.

Despite there being double-taxation treaties with several countries, Estonia taxes the company paying dividends, and not the individual receiving them, so you may not be in a double-taxation situation. But I am not a lawyer or an accountant; it is better to consult with one.

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