[HN Gopher] Ask HN: Founders of estonian e-businesses - is it wo...
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Ask HN: Founders of estonian e-businesses - is it worth it?
Hey there, I'm currently considering opening an Estonian
e-business for a small SaaS project. As somebody from Germany,
establishing a company is a bit tedious and bureaucratic. Now I've
come across the Estonian e-residency program and the option to run
a business there. I don't care so much about the tax implications,
but more about the bureaucracy aspect. It all sounds quite good.
But marketing is marketing and real life often is something else.
So, long story short: I would be happy if somebody could share
their real-life experiences. Was it/is it worth it? Are there any
pitfalls? Thanks!
Author : udl
Score : 80 points
Date : 2026-03-24 09:23 UTC (3 days ago)
| dsnr wrote:
| Not answering your question directly but accounting and taxes are
| a thing everywhere. EU rules make accounting for companies quite
| complicated.
|
| Focus on your business, open the smallest and simplest entity you
| can to validate your product before spending time and money
| optimizing or scaling things. That being said, I'm familiar with
| GmbHs in Germany and I would advise against going this route
| unless funding is available. Try a sole proprietorship instead if
| possible.
| udl wrote:
| Thank you! Yes, that's why I'm looking for a simpler and less
| bureaucratic alternative. I'm totally fine with general
| accounting and taxes. But I would be happy if there was an
| alternative somewhere where you don't have to go to a notary
| for every little change and don't necessarily need a tax
| advisor because you have to talk to five different tax offices.
| Germany really makes it more complicated than it needs to be.
|
| edit: just stumbled upon this really good blog post about the
| topic, in case anyone is interested:
| https://eidel.io/posts/estonias-e-residency-is-awesome-and-s...
| jFriedensreich wrote:
| "accounting and taxes are a thing everywhere. EU rules make
| accounting for companies quite complicated" >> this is the most
| wrong thing ever. You cannot compare the one click accounting
| in estonia with german kafkaesk absurdity designed to grind you
| down. How things are implemented are drastically different in
| countries even if both in the EU.
| Bluestein wrote:
| I professionally have been helping folks set up and maintain
| e-Residence and businesses, and all said here in the comments so
| far tracks: Estonia is absolutely unsurpassed qua _administrative
| ease_ (this giving you a _clear and lasting_ business advantage),
| the tax advantages are real, and the _jurisdiction only gets
| better_.-
|
| Banking and being scrupulous on your _personal_ taxes at your
| place of personal residence are issues, but nothing
| insurmountable, far from it.-
| aerhardt wrote:
| I've considered it as a Spanish resident, but don't you have to
| live six months there to be considered a fiscal resident? Are
| people regularly operating them from outside Estonia?
| campbellmorgan wrote:
| (Not a tax professional so don't take my word for it) But I
| think you're talking about individual fiscal residency. A
| company you create can technically not be resident where you
| live so long as you can demonstrate that the principal
| activities of the company do not take place where you live.
| So with Spain, if a decent percent of your customers are
| Spanish and you're the only member of the company, then Spain
| would have reasonable recourse to consider the company
| Spanish and require you to register it there and pay Spanish
| corporate taxes. However, if you have say, 6 employees all
| over the world, your customers are not substantially Spanish
| etc then they have a lot harder job proving that the fiscal
| residency of the company is Spanish. In any case, there is
| always an outside chance that they could investigate you
| which is enough of a pain on its own, so may not be worth it!
| ozim wrote:
| I was discussing similar topics with a lawyer once over
| some beers.
|
| Basically it would be best if you have no customers from
| Spain or country of your residence.
| evanbuilds wrote:
| The hardest part is always distribution, not building. You can
| have the best product in the world but if nobody knows it exists
| it does not matter. Focus on being genuinely helpful in the
| communities where your users hang out and the product sells
| itself.
| aerhardt wrote:
| This has nothing to do with the question OP is asking.
| savageaudit wrote:
| curious how much of the appeal is still there vs a few years ago
| feels like a lot of these "global founder" setups sound great in
| theory but get messy in practice
| nnurmanov wrote:
| What about EU Inc? Is there any timeline?
| murkt wrote:
| Long way ahead still:
|
| > Given its key importance for the EU's competitiveness, the
| Commission is calling on the European Parliament and the
| Council to reach an agreement on the EU Inc. proposal by the
| end of 2026.
| shrink wrote:
| I've had companies in a few different jurisdictions, including a
| Delaware C Corp[1] and currently an OU through Estonia's
| e-residency program.
|
| Yes, it is fantastic and delivers on all of the promises. The
| only potential headache is that you must collect your e-residency
| card from an embassy which, depending on your location, might
| require travel to a nearby country.
|
| I used Xolo but there are lots of agents in the directory. I like
| and recommend Xolo. No idea what the supposed issue with banking
| is, all of the agents have banking relationships and you can also
| use Revolut and Wise. My bank account was opened same day as the
| company.
|
| Your details are published on the public register. The moment
| your registration is published you'll get lots of emails offering
| services, like banking (some people pretend to be Revolut but are
| actually just sending you affiliate links). Don't publish an
| email address you care about.
|
| [1] The problem with forming a U.S. company is that all of the
| formation agents are layers on top of a convoluted nightmare. The
| formation agent can do their best to abstract away the complexity
| but the moment you have to peak behind the curtain you'll find
| yourself face to face with something very scary. The Estonian
| e-residency program is integrated all the way through.
| andai wrote:
| Did the actual business registration and bank thing require
| travel? I might be remembering wrong but I thought that was a
| requirement a few years ago.
| tpetry wrote:
| Oh there will be a lot of issues in the future because Germany
| says thst your company is in Germany because you work from there.
| So you have to do taxes in Estonia and in Germany. And prepare
| for a lot of tax issues if you dont have a good tax advisor.
| registeredcorn wrote:
| >Germany says that your company is in Germany because you work
| from there.
|
| Forgive my ignorance, I have never really thought about this
| before and I may be missing something very obvious here.
|
| Isn't that kind of _true_ , though? For instance, if I am a
| citizen of Japan, live there, and run my remote business from
| there, but the business that I run exclusively makes money from
| people in Portugal and Brazil, it would be true that my revenue
| is being _generated_ in those other countries, but in my own
| life, I am enjoying the _benefits and protections_ of being a
| Japanese citizen. Right?
|
| It isn't so much that I would _want_ to be taxed in: Portugal,
| Brazil, and Japan, but rather that, the nature of how I am
| choosing to operate my business kind of makes the issue my own
| burden to bare. If I continue to live in Japan for whatever
| reasons that may tie me there (family, friends, children in
| school, business isn 't stable enough, other commitments, etc.)
| it seems like there is a kind of _debt_ to pay back some of my
| earnings to the Japanese government because they have provided
| me an environment to build and maintain that business within
| their country _even though_ the profit made is exclusively
| outside of Japan. That is to say, the government may not have
| seen the money directly, but they provided me a safe and stable
| environment in which I was able to run and operate that
| business; isn 't that kind of the fundamental role of
| government? I.e., to protect the nation and its citizens, so
| they may do as they will.
|
| Put another way, suppose the top 1,000 richest people in the
| world all opted to all move to a tiny nation with very low
| taxes, and continued to run their businesses remotely from that
| place without being required to contribute anything back to
| that nation through taxes. That seems wrong to me. It seems
| good that they would be asked to pay back into the place that
| they live and reside, _regardless_ of where their revenue is
| gotten. They have a home, and that home is ultimately defended
| and it 's property rights upheld by the government that
| recognizes it.
|
| I'd be interested to hear how others see it. Like I said, I
| haven't really thought about this too much before, and may be
| missing something more fundamental and obvious.
| mono442 wrote:
| but you still pay your personal income tax in the country
| that you live in
| lordnacho wrote:
| Isn't that more or less how it works? You pay tax where you
| live, with the justification being, as you say, that you are
| benefitting from the social structure there?
|
| The big country that is an exception is the US. Their
| citizens have to pay tax regardless of them being elsewhere,
| and the difference is dealt with via various taxation
| treaties. I imagine the justification is something like "we
| help our citizens everywhere, so they owe us tax".
|
| > I'd be interested to hear how others see it. Like I said, I
| haven't really thought about this too much before, and may be
| missing something more fundamental and obvious.
|
| The big thing that's missing is corporations. They are
| imaginary entities, with a bunch of rules about what they are
| allowed to do, how they pay tax, etc. Once you create a
| corporation (or several), you can move profits around
| according to various accounting rules, which are often
| disconnected from how ordinary people interact with an
| entity. Are you buying coffee from Starbucks on Oxford
| Street, or Starbucks UK, or Starbucks Luxembourg? Most people
| don't think about that when they buy a coffee, but the
| accountants do.
|
| You can also change what kind of tax you are paying. If you
| have a company, you can pay yourself a salary or a dividend.
| It's still money either way, but depending on jurisdiction
| taxed differently.
| samus wrote:
| [delayed]
| fl7305 wrote:
| > As somebody from Germany, establishing a company is a bit
| tedious and bureaucratic.
|
| I'm fairly sure the German tax authority will claim that you have
| a local German branch office since you live and work there.
|
| That might be OK tax wise?
|
| But I'd recommend starting with the tax situation in Germany.
|
| Having limited liability through some kind of corporation can be
| nice.
|
| But on the other hand, it becomes harder in Germany to pay out a
| varying salary as profits fluctuates throughout the year since
| the German tax authorities will see that as an illegal dividend
| payment from your company.
|
| From this perspective it can be easier to set up some kind of
| sole proprietorship. Easier accounting etc and can pay out
| profits easier. But you get the personal liability.
|
| This is not hard advice, just some things to point out that it
| gets complicated fast. So I'd recommend spending a few hundred
| euros on getting advice from a tax professional to begin with.
| mono442 wrote:
| In some countries, it's common to register a sole
| proprietorship in addition to a limited liability company and
| bill the company from the sole proprietorship to avoid double
| taxation. However, I suppose this would not be allowed in
| Germany.
| codethief wrote:
| > I'm fairly sure the German tax authority will claim that you
| have a local German branch office since you live and work
| there. That might be OK tax wise?
|
| If you work from home, your office at home usually does not
| qualify as a company office unless you make it one. In
| particular, that alone would not force you to pay Gewerbesteuer
| to the city, which is the tax specifically addressing local
| presence.
|
| However, you're touching upon a very important point: If you
| live in Germany and your Estonian company pays you a salary (as
| opposed to dividends), you will be a proper employee and your
| company will also have to pay social security for you, and this
| might complicate matters significantly. In fact, this will
| likely (in the German tax authorities' eyes) establish that
| your Estonian company partially operates in Germany (which is a
| much broader thing than having an actual physical branch
| office). This then brings you back to square 1 - your company
| having to file taxes in Germany, too. Someone below linked
| https://eidel.io/posts/estonias-e-residency-is-awesome-and-s...
| which seems to confirm this.
|
| > German tax authorities will see that as an illegal dividend
| payment from your company.
|
| Could you elaborate? How is this illegal if you declare taxes?
| andai wrote:
| My 2 cents
|
| In 2023 tried to register a business in Estonia.
|
| I had to first get the e-residency.
|
| This worked, (took 6 weeks I believe), but then I had to travel
| to another country (which had an Estonian embassy) to collect it.
|
| Then I would have had to travel to Estonia itself to register the
| actual business and bank account (something like that -- it was a
| while ago).
|
| (There are "done for you" business services, but from what I
| recall they were quite expensive, and I think would have still
| required the travel.)
|
| It was theoretically doable, but due to life circumstances I
| wasn't able to travel at the time, so it didn't work out.
|
| Meanwhile a few days ago, finally worked up the courage, and
| registered a business in the UK via a formation agent.
|
| It took 25 minutes and $150. (Business was registered within 2
| business days.) From the comfort of sitting on mine own ass, on
| the other side of the sea. So... yeah xD I like this way a bit
| better so far.
| shrink wrote:
| I can't speak to how things were in 2023 but today you do not
| need to visit Estonia.
|
| Registering a company in the U.K. is very easy but the tax
| treatment is less favourable compared to Estonia. The U.K.
| leaving the European Union is also disadvantageous (although
| the full consequence of that is yet to be seen). All company
| filings in the U.K. are public, much more information about
| your company is public compared to Estonia.
| hirako2000 wrote:
| Creating a company is the easy part in the UK. Need to do
| HMRC and house of company reports. And now his Majesty
| revenue and custom requires purchasing "approved" tax
| software and submit expenses adhering to new regulations. And
| to verify your identity
|
| and if you like access the online service you've got to wait
| 2 to 3 weeks for them to send a code in a physical post
| letter (no other way). And part of those services are
| mysteriously unaccessible from an IP outside the UK.
|
| And it costs double to dissolve the entity than it did to
| create it. VAT is 20%, put someone on Payee: employee pays
| 20% to 45% (over 50k per year starts to fall into the high
| tax rate) + 9% insurance and as a company you also pay
| roughly 30% on top for taxes and insurance. Of course there
| is corporate tax on any profit. If with all of those taxes
| you somehow manage to be profitable.
| rahimnathwani wrote:
| I'm curious why you used a formation agent to register your UK
| company instead of doing it directly on the government's web
| site.
|
| https://www.gov.uk/limited-company-formation/register-your-c...
| andai wrote:
| I realized I had been putting it off for years due to hating
| paperwork, then realized the whole point of a business is
| that you can pay people to do stuff you don't like. So for
| me, the first order of business was to outsource the
| formation itself :)
| varispeed wrote:
| Whole point of a business is making a profit my guy! :-)
| rahimnathwani wrote:
| I get it for things that are a hassle. But the process to
| register a business in the UK is really straightforward. I
| haven't used the process for many years now, but the last
| time I did I was impressed at how they'd made it as simple
| as possible whilst collecting all the necessary
| information.
|
| I can't imagine how a formation agent would make the
| process any simpler or easier for you.
| pier25 wrote:
| I've been running a saas like this for the past couple of years.
|
| I'm using Xolo which do the accounting and local representative.
| 99% of my bureaucracy is uploading pdf invoices to the Xolo
| system. Once a year I have to spend like one hour on the anual
| report. That's pretty much it.
|
| Every 5 years you have to renew your digital id. It costs a
| little money and if you are in the EU there will be a pickup
| location not far away (I had to travel internationally).
|
| I also have to deal with my personal taxes but that's another
| matter.
| jFriedensreich wrote:
| Can also confirm it is great. The community is also quite nice
| and helpful. Also worth noting, because that comes up all the
| time, is that Estonia has a digital data embassy in Luxemburg, so
| if god forbid, russia would take increase its aggression, there
| is a copy of everything that would keep running your business.
| The main issue germans have is you cannot really get rid of
| german accounting as long as generating the business value there
| while living there. Once getting used to how smooth things can
| be, I could not bear having to deal with the german bureaucracy
| in any other area of life.
| sivers wrote:
| Here's a newer post from a German who previously was a fan of the
| Estonian e-business, saying things changed for the worse in 2025:
|
| https://denationalize.me/emigrate/goodbye-estonia-how-a-popu...
| gmsarmiento wrote:
| Here's what I've seen. First you'll need a service provider (you
| can't really avoid it) we tried grouhub,Manuel the guy was very
| kind. 500EUR for the incorporation and he referred us to get the
| bank account . On the other hand, don't incorporate too early. If
| you're still validating, you're just paying overhead for
| nothing(180EUR/month). On initial capital: you can set it at
| EUR10k as it helps if you plan to structure/share ownership more
| seriously later, but plenty of people start smaller and adjust
| when needed.
| tauntz wrote:
| You don't need a service provider other than a "contact
| person".
|
| The actual minimal cost of getting e-residency is a one time
| EUR150 state fee (I guess you have to renew the physical card
| every 5 years, which is EUR150 again?). If you also want to
| incorporate an Estonian company (which you probably do in this
| context here), then the registration for this is a EUR265 one
| time state fee.
|
| There are no other mandatory fees, except you have to find a
| "contact person" who's responsible for receiving official
| government communication on behalf of your company (don't
| worry, I have never gotten any physical communication from any
| gov agencies during my 10 years of having a company here so
| this "contact person" won't actually be doing anything and is
| just a formality). After a 3 minute google search, this service
| can be had for EUR7 / month.
|
| If you don't want to file taxes yourself then you'd also need
| to hire a local accounting firm. That'll start from somewhere
| around EUR50/month for a micro-SaaS. If you really want to, you
| can file taxes yourself for free but.. your call if your time
| spent learning the Estonian tax code is worth the saved money..
| Gys wrote:
| It is mentioned a bit in other comments: be aware that in the
| country where you live, the tax authorities can argue that your
| 100% owned company in country X is managed by you. This means it
| is taxable in your country. It is then up to you to counter their
| point of view...
| matsemann wrote:
| And they wouldn't be wrong.
| rednb wrote:
| Except it does not work that way in the US, you can freely
| incorporate in any state without worrying about this kind of
| tax drama. The EU really needs to improve the integration of
| their single market, as this is precisely the kind of barrier
| preventing people from exploring what other EU states have to
| offer.
| x0x0 wrote:
| It does here, at least in California. eg if you live in CA
| and own a DE llc, that llc will have income apportioned to
| CA.
| dewey wrote:
| What are you comparing it to in Germany? Have you tried services
| like https://www.firma.de that don't make it much more
| complicated than the Estonian option these days. I have not tried
| it myself, but I have friends who had good experiences with it.
| littlecranky67 wrote:
| You said you are from Germany but not where you are now. If you
| are still in Germany, forget it. Just because you incorporate
| outside of Germany does not exempt your from any taxes (and its
| beauraucracies) in Germany. That is, even with an estonian
| corporation, you will owe german corporate taxes (plural - one
| goes to the state one to the county - a.k.a. Korperschaftsteuer
| and Gewerbesteuer). That implies you will have to do the same tax
| paperwork as with a german GmbH and file them official with the
| tax authorities (Steuererklarungen, Umsatzsteuerjahresabschluss)
| and the Bundesanzeiger (Jahresabschlussbilanz). Nothing gets
| easier with that setup.
| abpavel wrote:
| This is the best answer. Internally, we have to deal with
| bureaucracies of every country for employment and residencies.
| Separately.
| lordnacho wrote:
| This is why I was wondering what the point was. Surely most
| countries will claim taxes from you if you work there, so
| having an Estonian entity will do little?
|
| Can someone explain the actual benefit of sitting in a
| developed country and charging via Estonia?
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