E-Residency of Estonia

It is a great alternative for everyone willing to scale their businesses across Europe. They have built a strong ecosystem, and founders will find a lot of support.

So I get e-residency; I open an Estonian company, which by being Estonian, and Estonia in the EU, is an EU company, and so can be used anywhere in the EU (otherwise, it would be recognized only in Estonia).

Now, a company is considered resident in the country where the highest level of direction sits - typically the board of directors, or if you're a one man company, where you are - and I believe the resident country changes immediately upon the board of directors (or you, if single man) changes country.

However, I think a company can only be used in a country if that country recognizes that company. All EU countries recognize all other EU countries' companies, but if I had say my Estonian company via e-residency, and went to Swaziland, I couldn't use that company, because the locals simply regard it as a non-entity. Not a thing, not a company, not recognized.

If you are in an EU country, and are using a company from a different EU country, that company pays its corporation tax in the country where it is resident. So f you have your Estonian company, and you are in France as a single-man company, your company pays French taxes applicable to a company (which means paying for a year of insurance, accountancy services, doing all the paperwork, getting residency, etc, etc, for say three months of presence).

You as an individual only become resident if you move to a country with the intent of staying (you are then instantly considered resident), or if the tax office think you were intending to stay (and some countries are extremely, even ridiculously, inclined to think this), or if all else fails, half a year has passed. Also most countries require you to register after a month or two or whatever, and no countries allow you to work on their territory as a tourist.

So with your three month stay in France, you must also do everything required for residency, and get into the social security system, get payroll set up for company, and pay all taxes applicable to an individual, pension payments, and so on. Maybe you get it done before you leave, maybe not.

(This is broadly true. There are a lot of countries. A few will vary from this.)

It's like badly design software. Completely crazy and complete mess, while being a natural outcome of the situations leading up to now.

So given all this, what does an Estonian company give you?

However, that's my take on how things are. No comments on this as I'm not sure I'm fully correct, so I ask now for questions, comments, observations and corrections.