e-Residency masterclasses in Greece

e-Residency Hub together with the Estonian government’s e-Residency team organised two masterclasses in Greece on November 7 and 8, 2023.

The two events took place in the cities of Athens and Thessaloniki. At the masterclasses we introduced the possibilities that Estonian e-Residency offers to entrepreneurs interested in an online, efficient and paperless business environment. Issues of taxation, focussing on the Greek market were also discussed, helping participants understand the various tax implications that arise from conducting international business operations, using an Estonian company.

Both evenings created a lively discussion with the audience and participants showed a keen interest in becoming e-Residents. Many existing e-Residents also took part and shared their experiences gained during many years of successful management of an Estonian company using their e-Residency.

Our managing director Martin Lään commented on his experience of speaking at both masterclasses: “It was such a thrill to introduce our work, our value offering  and our clients’ stories to such an experienced and keen audience. I very much hope that the participants of the two masterclasses will soon join the ranks of the 1,000 e-Residents from Greece that already use the Estonian business architecture and we will see an addition to the 400 companies that Greek e-Residents already own and manage in Estonia”.

The masterclasses in Greece were organised and sponsored by the Estonian Government’s e-Residency Team and the Estonian embassy in Athens. We thank these organisations for their initiative and for the opportunity to be part of the ever-growing world of e-Residency.

With a Wise multi-currency account you can send, spend and receive money in over 50 currencies. Your money will always be converted at the real exchange rate helping you avoid hidden fees from exchange rate mark ups. International payments are up to 14x cheaper than PayPal and you can receive payments in USD, EUR, GBP, NZD, AUD and SGD for free with your own local account details. Used by over 8 million customers worldwide, Wise are on a mission to make moving money around the world as cheap, transparent, convenient and fair as possible.

e-Residency Hub is happy to announce a partnership with Wise. To open your account, please click here

Opening a Wise account for your Estonian company costs €19 (a one-time fee)

Founded by the first employee of Skype and used by over 8 million customers; the Wise multi-currency account gives you access to unique bank account details for the UK, Eurozone, US, Australia, New Zealand and Singapore (with new currencies being added all the time). There’s no set up fee or monthly costs – the only fee you’ll pay is a small, upfront cost on the value of your transfer which is up to 14x cheaper than PayPal for international payments. With an account you can:

  • Hold 50+ different currencies within the one account and convert between them at the mid-market exchange rate.
  • Only costs are a small, upfront fee on the value of transfer
  • Pay invoices, buy inventory and handle payroll with the real exchange rate in over 70 countries
  • Receive international payments from the US, Eurozone, UK, Australia, New Zealand and Singapore with no fees using your own local account details
  • Business debit card available so you can spend anywhere at the mid-market exchange rate
  • Manage your payments online and on mobile
  • Global customer support via phone, email and chat
  • Made for business owners doing business across borders

For a step-by-step instruction about how to open your account, click here.

Once your Estonian company has been established, here is a step-by-step guide to opening an account with Wise. Please note that opening a Wise account for your Estonian company costs €50 (a one-time fee):

  1. After the registration of your company has been confirmed by e-Residency Hub, click here to start your Wise account registration process.
  2. If you already have a personal Wise account then log-in and click on the top-right menu where you see your name. Here you will find an option to Create a business profile, please click this option instead to proceed
  3. Choose Business and sign-up
  4. You will immediately receive an e-mail to confirm your e-mail address. Please complete this verification to continue
  5. Please fill the relevant details (as shown). Note: You will need to enter the registration code of your Estonian company which can be found in the confirmation e-mail received from the e-business register. In the business address, please enter the information as shown
  6. After completing Step 4, you will be asked to fill your personal details. Note: Please enter all details as they are mentioned in your national passport document. Please enter a mobile phone number which you use on a regular basis, especially for your business activities. Under the Phone section, there is an option to verify your new mobile phone number and it is recommended that you verify it even though this is optional. In the Your Address section, please enter the actual address where you live
  7. After completing Step 5, you will need to choose the reason for opening a TransferWise Business Account, please choose a relevant option and click Continue
  8. You will now need to upload a scanned copy of your passport. Even though you have the option to upload a copy of a different national ID document, we highly recommend that you upload a copy of your passport. Note: You can only upload a .JPG or .PNG file. If you have a .PDF or .DOC file then you can go to https://smallpdf.com and convert the file to .JPG for free. Please note, e-Residency Hub only recommends this solutions and does not take any responsibility as to the privacy…, etc. Please ensure that the quality of the document you upload is high-quality and readable
  9. After completing Step 7, you will need to confirm if you are the sole owner or have other stakeholders. Please choose the relevant option
  10. Following this step, you will be asked to again verify your personal information and then asked if you are the sole director of the company or have other directors. Please choose the relevant option
  11. Upon completing this step, you will receive a confirmation (as shown) and will then have to wait for 3-5 working days for the information provided to be verified. You will receive an e-mail once the verification has been completed and your account is ready for use. Note: You might be asked to provide additional documents, etc. by the TransferWise team. If asked, please provide them the relevant documents, including a utility bill of where you operate from with all the relevant details regarding the address, etc. of the exact address you operate from (this address should also be reflected on the business registry document you receive from e-Residency Hub since the registered business address would be the virtual office address in Estonia but the operating address would be the address you supplied of where you operate from). In some cases for example, this could even be your residential electricity bill if you do not have a separate physical office

In addition to the services offered to our clients as part of their service package, e-Residency Hub offers a wide variety of other services that your business may need. A list of such services, together with the respective fees, is given below.

All fees are quoted without the Estonian VAT of 20%.

Service Price without VAT
Services related to company documents
Certificate of income tax paid on dividends 25 €
Notarised company registry card (in English or Estonian) 20 €
Notarised company Articles of Association (in Estonian) 20 €
Notarised Articles of Association (sworn translation to English) 100 €
Notarised Articles of Association (sworn translation to other languages) Depends on language
Company Certificate of Tax Residency 20 €
Notarised list of Beneficial Owners (in English or Estonian) 20 €
Apostille 45 €
Courier and mailing services
Forwarding documents to client (UPS courier) 90 €
Forwarding documents to client (registered mail) 30 €
Dissolving / liquidating a company
Dissolving a company 400 €
Service fee for taking back a liquidation petition 50 €
Changes in the Commercial Register
Making changes in the Estonian Business registry (e.g. share capital downpayment, changes to the board, contact data, etc). Includes state fee of 25 € 75 €
Increasing share capital. Includes state fee of 25 € 125 €
State fee for reinstating a company in case the company was deleted bt the Registry keeper (no VAT is added) 200 €
Processing the company reinstateement 50 €
Accounting services (in case volumes exceed the limits of the service package)
Extra bank account / payment gateway 25 € / month
Additional sales channel or Amazon marketplace 45 € / month
Extra invoices (price for each batch of 25 invoices) 25 €
Additional currency 25 € / month
Processing a refund of VAT paid in other EU countries 75 €
Applying for an EORI number 30 €
Video consultations
Consulting services via video call about e-Residency and operating a company in Estonia (minimum time 30 min) 50 € / h
Services requiring a notary
Preparing Power of Attorney documents for the notary and representing client at the notary (fee includes notary fees). In case of more than 3 parties to the transaction, fee shall be higher 400 – 1,000 €

(exact quote depends on the structure of the deal)

 

In cooperation with the Estonian government’s e-Residency Team we introduced e-Residency and our services to the German start-up community.

The event had about 5000 participants from Germany and beyond. Interest in the Estonian e-Residency was lively. We also had the chance to introduce Estonian e-Residency and our start-up unicorns on the main stage of the event. A side-session took place, where international taxation issues surrounding e-Residency were discussed in more detail.

In the evening before the conference, there was a separate event for existing and future e-Residents. Our manager, Mr Martin Lään spoke at the event as a panellist, introducing the services e-Residency Hub can offer to e-Residents, starting the corporate journey.

Thank you all who participated in these events and see you next time!

E-Residency Hub is proud to join a campaign to support Ukrainian entrepreneurs in these difficult times for their country.

We offer a possibility for Ukrainian e-residents to get an immediate refund of the state fee for setting up an Estonian company.

Ukrainian e-residents also have the possibility of getting a refund of the e-residency application fee they previously paid to the Estonian government.

Read about the eligibility criteria and process here:

Process of benefitting from this campaign using E-Residency Hub services:

  1. Enter all the data required to set up your Estonian company on our website
  2. Pay the initial fees as per our usual prices
  3. Once the application has been submitted though our website, send an email to info@erhub.ee and inform us that you wish to take advantage of the campaign offer
  4. After verifying your data we shall refund the state fee of 265 € to your credit card
  5. In case you are also eligible for the e-residency state fee refund, we will process that and reimburse that fee also to your credit card or bank account

In order to benefit from the campaign, you must select our Lightweight, Standard or e-Commerce package and commit to a service contract valid at least 12 months.

e-Residency Hub launched a cooperation with KPMG, to support Estonian e-Residents in operating their businesses and providing more knowledge about taxation and accounting.

The first article is about the One-Stop-Shop (OSS) scheme for online sellers for paying their VAT. In the article we look at the impact of the new scheme from the viewpoint of companies registered in Estonia that sell goods in their online stores that are stored in a warehouse located in another Member State or that are located outside of the EU and transported into EU once the consumer has placed an order.

Click here to download the article

Today, Estonia’s largest daily business newspaper “Äripäev” recognised e-Residency Hub as the second fastest growing accounting firm in the country.

Upon receiving this recognition, we would like to thank all our clients for your continued trust and cooperation. Our growing team works hard every day to provide our clients with the high-quality support they need to make it in today’s fast-changing global business environment.

e-Residency Hub and Tehnopol Start-up Incubator offer: enrol in the Start-up Incubator of Tehnopol and get 6 months free accounting and contact point services.

Tehnopol is the largest science park in the Baltics. e-Residency Hub in cooperation with Tehnopol Start-up Incubator, offer 6 months of free accounting services to e-Residents who set up their companies via e-Residency Hub and get admitted to the incubator.

At the Tehnopol Start-up Incubator you get

  • Fully online participation in the incubator
  • 6 practical and exclusive training days from the experts of Tehnopol
  • Thousands of euros worth of expert advice from mentors from Estonia and rest of Europe
  • 6-months free accounting service s from e-Residency Hub
  • An equity option agreement, no monthly fee
  • A united community and wide network of contacts

Terms of campaign

  • Free accounting services are offered, based on the service description of e-Residency Hub’s standard package
  • Offer is valid for companies who get admitted to the Tehnopol Start-up Incubator not later than on 31.12.2021

Further integration between e-Residency Hub and Wise improves user experience

e-Residency Hub is happy to announce a new integration with Wise. From now on, our clients’ Wise accounts can be linked with our accounting platform Envoice.

Now our clients can:

  • See the balance of their Wise account on the Envoice dashboard in real time,
  • See the Wise account statement in the Envoice platform,
  • Purchase invoices which have been paid to the company’s Wise account are automatically marked as “paid”,
  • Sales invoices which have been paid by your clients to your Wise account, are automatically marked as “paid”.

We hope that this new improvement further reduces the amount of effort from our clients and allows them to further concentrate on the fundamentals of building their businesses.

Wise and e-Residency Hub celebrate our first full year of partnership in providing our clients with smooth and simple payment solutions. The newly operational API is a further step in the long term goal of continuously developing our services together.

In case you do not yet have a Wise account, you can find instructions about it on our website.

For detailed instructions about how to set up the API, click here or contact your accountant at e-Residency Hub.

 

Accounting processes for online sellers of digital services and software subscriptions can vary, depending on the exact nature of their business model and processes these sellers have in place. For such businesses, we offer our services, based on a “base fee + additional services” model.

Base fee

The Base Fee of €175 per month covers the following accounting services.

  • Booking up to 1,500 sales invoices monthly
  • 2 Bank accounts / Payment Service Provider accounts
  • 1 sales channel (in case your various sales channels are all linked to one software (e.g. Quaderno or Paddle), they shall be considered one sales channel
  • Mini One-Stop-Shop (MOSS) declaration once per quarter

In case you do not give us access directly to your sales software (such as your Shopify account), you need to provide us your sales data each month:

  1. Detailed sales data in this format.
  2. Detailed payment data. All payments must be clearly connected to concrete sales transactions.

Additional services and fees

Additional fees are charged only in the case they specifically apply to your business model. The additional fee rates shall be fixed in our contract with your company. In case your business grows or your business model changes, please let us know, so we could adjust the additional fees if needed.

Additional fees for SaaS business models are given in the table below

Additional accounting fees for SaaS businesses

Service Details Additional charge per month
Additional sales channels A “channel” can be an e-commerce platform such your own website(s) or Shopify or any other additional tool you use to sell your services.

Extra charge applies if you sell your services in different channels.

In case your services in various sales channels are all linked to one software (e.g. Quaderno or Paddle), they shall be considered one sales channel.

 €45 per each additional sales channel
Processing more than 1,500 sales invoices per month You can give e-Residency Hub access to your sales platform, in order for us to extract your sales data. €25 in case your company has in total 1,501-2,000 transactions per month

Additional €25 for each additional 500 transactions (starting from the 1st transaction that exceeds the limit).

 
More than 25 purchase invoices per month In addition to invoices we also accept receipts  (e.g. hard copy paper slips, issued by the seller’s or service provider’s cash register). €25 in case your company has in total 26-50 purchase invoices per month

Additional €25 for each additional 25 invoices (starting from the 1st invoice that exceeds the limit)

 
More than 2 bank accounts (or payment service provider accounts) €25 for each additional account

Example

A company sells subscriptions to their services on 2 different websites. These websites are not linked to Quaderno or Paddle.

  • They have 1,530 sales transactions and invoices per month
  • They have 30 purchase invoices
  • 3 accounts: Wise (€), Wise (USD) and PayPal (€)

The monthly accounting costs for such a company would be the following

Base fee for SaaS companies €175
+1 extra sales channel €45
1,501-2,000 sales transactions €25
26-50 purchase invoices €25
+1 additional bank account €25
Total monthly cost for services €235
Estonian VAT of 20% €47
Grand total €342

Accounting processes for online sellers of physical goods can vary, depending on the exact nature of their business model and processes these sellers have in place. For such businesses, we offer our services, based on a “base fee + additional services” model.

Base fee

NB! Please note that Estonian VAT of 20% will be added to all fees quoted below.

The Base Fee of €175 per month covers the following accounting services.

  1. Booking up to 25 monthly purchase invoices/receipts
  2. Booking up to 1,500 sales invoices
  3. One Amazon marketplace or other sales channel
  4. Up to 2 bank accounts OR payment gateways (e.g. TransferWise + Stripe

Additional services and fees

Additional fees are charged only in case they specifically apply to your business model. The additional fee rates shall be fixed in our contract with your company. In case your business grows or your business model changes, please let us know, so we can adjust the additional fees if needed.

Additional fees for e-commerce companies (i.e. companies selling physical goods online, using various e-commerce portals such as amazon.com, Shopify, Etsy, etc) are given in the table below

Table #1 – additional accounting fees for e-commerce businesses

Service Details Additional charge per month
Additional Amazon marketplaces

 

 As your business grows, you may wish to start selling your goods on more than one marketplace. Amazon provides data separately about each marketplace and also our accounting services separate the different marketplaces

Extra charge applies in case you use several Amazon marketplaces (such as amazon.de, amazon.co.uk, amazon.it, etc).

 €45 per each additional marketplace
Additional sales channels A “channel” can be an e-commerce platform such as Shopify or your own website or any other additional tool you use to sell your product

Extra charge applies if you sell your products in different channels.

 €45 per each additional sales channel
More than 25 purchase invoices per month In addition to invoices we also accept receipts  (e.g. hard copy paper slips, issued by the seller’s or service provider’s cash register). €25 In case your company has in total 26-50 purchase invoices per month

Additional €25 for each additional 25 invoices (starting from the 1st invoice that exceeds the limit)

Note for dropshippers: in case you are buying your goods from one or few sellers, and these sellers can issue a combined invoice for all your purchases of a month, such invoice shall be considered as one invoice, regardless of how many items are listed on the invoice.
More than 1,500 sales transactions per month In case of Amazon, you need to give us access to your Amazon Seller’s account, so we can extract all the relevant data.

In case you do not give us access directly to your sales software (such as your Amazon or Shopify account), you need to provide us your sales data using this template.

 €25 In case your company has in total 1,501-2,000 transactions per month

Additional €25 for each additional 500 transactions (starting from the 1st transaction that exceeds the limit)
More than 2 bank accounts (or payment service provider accounts)

 

 €25 for each additional account

 

Inventory

Keeping exact inventory of your goods can be an important element of managing an e-commerce business. You may need detailed information about how many items of each Stock Keeping Unit (SKU) you currently have available, in which (Amazon) warehouse these units are located and what is their value.

Amazon itself does not provide such information for you in sufficient detail. Many e-commerce businesses therefore use additional software applications that can be linked up with their e-commerce sites, such as  Amazon, Shopify, Etsy and/or their own various web-shops. This way an integrated and wholesome information can be obtained that will support the strategic planning of your business.

E-Residency Hub does not provide inventory keeping services. We recommend the following applications, which our clients often use. These applications provide information about your company’s inventory:

We recommend that you check out the possibilities of these platforms. As your accounting service provider, we only need input from you about the year-end value of your inventory. In case you require us to include your inventory value in your company’s balance sheet on a given day or a profit & loss statement for a given period, you must give us the inventory value at these specific dates.

Example

A company sells their products on amazon.de and amazon.com marketplaces

  • They have 1,530 sales transactions and invoices per month
  • They have 30 purchase invoices
    • 7 different fees that they pay to Amazon for promotions, handling, packaging, etc
    • 23 purchase invoices from producers of the product
  • 3 accounts: Wise (€), Wise (USD) and PayPal (€)

The monthly accounting costs for such a company would be the following

Base fee for e-commerce €175
+1 extra Amazon marketplace €45
1,501-2,000 sales transactions €25
26-50 purchase invoices €25
+1 additional bank account €25
Total monthly cost for services €235
Estonian VAT of 20% €47
Grand total €342

Holvi has announced that their corporate bank cards are working again. Read the statement here:

Original post below

Holvi has issued a statement, announcing that their MasterCards are curently suspended because of recent events in connection with the insolvency of Wirecard AG. The statement can be read here.

For our clients who face problems regarding this issue, e-Residency Hub recommends to apply for a TransferWise account and bank card. TransferWise cards are working properly and can be used for all business transactions. For detailed information about how to open a TransferWise account, please see our instructions here.

Please note that in case you live in one of these countries, your TransferWise card can be delivered directly to your home country. For clients living in other countries of the world, your TransferWise card can be delivered to e-Residency Hub in Estonia. We will then forward your card to you.

Becoming an e-Resident and establishing a company in Estonia is a modern and efficient way to conduct your business. Estonia’s world leading e-governance infrastucture makes the administration of your company easy and you will be able to conduct the entire process online, wherever you are physically located. Also – Estonia’s corporate income tax system offers advantages to companies interested in re-investing their earnings into growing their business.

At the same time, the option of running your business using Estonian e-Residency programme and a Private Limited Company established in Estonia is not a one-size-fits-all solution for all types of business models. We hope some of the following guidelines can be helpful to you in making the decision about in which country to incoporate your business.

“e-Residency + company in Estonia” solution works very well for

  • Digital nomads / Freelancers – one-man operations or small groups of business partners, who mainly just need their laptop to work and often travel around in different locations.
  • IT service providers – Businesses where services are entirely taking place online (programmers, software developers, IT startups, etc).
  • Consultants – Businesses and individuals who are selling their skills in a concrete professional field (business, finance, law, health, etc).
  • Creative services – Architects, designers, (copy)writers, artists, translators, interpreters, etc.
  • Online sellers – Buisnesses selling physical goods online on Amazon or other larger online shopping platforms (e.g. Shopify or Etsy).
  • Dropshipping – Businesses where the goods you are selling are never actually “owned” by your company and where the seller (producer) handles the shipping to end-clients (incl logistcs and Vaue Added Tax).

“e-Residency + company in Estonia” solution works fine (under certain conditions)

  • Holding companies – Businesses where the only activity is holding shares of other businesses. With such business type, please bear in mind that in case the size of the businesses you hold (wholly or partially) grows, your Estonian holding company may become subject to auditing and consolidating requirements. When this becomes necessary, your Estonian company will need to buy additional auditing services, which will be an additional annual cost. Your Estonian accountant cannot handle this process, as you must buy auditing services from an independent third party (such as KPMG, PWC, Deloitte, etc).
  • Investment vehicles – in case of larger sums of money, you probably want to open a bank account in a commercial bank. Payment service providers may not be the best option for you. At the same time, Estonian fully online business environment and a corporate income tax system, where corporate income tax is levied only on dividends, is a considerable benefit for investment vehicles.
  • Crypto currency related businesses – In case you wish to provide crypto currency wallet services or operate your own crypto currency exchange, you will need a licence. Please read the information on the website of the Estonian Financial Inspectorate and consult with them before making further plans. Please also note that only some selected service providers in Estonia offer their accounting and consulting services in the field of crypto currencies. Please consult the e-Residency Marketplace to find such service providers.
  • Travel agencies – you may be subject to licencing in Estonia and may need to submit a financial deposit in Estonia as collateral.
  • Event organisers in Europe – European VAT rules stipulate that you need to pay VAT in the country in which the event takes place. Accounting, reporting and paying VAT in other countries outside Estonia is usually not handled by Estonian service providers. You will need a local (or international) VAT service provider, which will add to your operating expenses.

“e-Residency + company in Estonia” might not be the best option for

  • Localised businesses (outside Estonia) dealing with physical goods – Examples include a tobacco shop on a street corner, a car spare parts shop, restaurants / bars, factories, etc.
  • Localised businesses (outside Estonia) offering services to local  private customers – Examples include dentists, hairdressers, beauty parlours, etc.
  • Trading business of physical goods (where the warehouse or distribution centre is not located in Estonia) – European VAT rules may make it unnecesarily complicated to use an Estonian company. It may be a better option to find a European distributor for your products or to set up a company in the country where your goods will physically be stored.

Your Estonian company is registered in Estonia and is taxed in Estonia. This taxation is handled and collected by the Estonian Tax and Customs Board. See their website for various information about taxation in Estonia: https://www.emta.ee/eng

e-Residents who own and manage companies in Estonia are usually themselves not Estonian tax residents, simply and mainly because they do not actually live in Estonia. It is therefore possible, that your home country (the country in which you are a tax resident), may wish to tax you additionally. This may concern corporate income tax or any other taxes. In doing so, foreign tax authorities can base their claims on the fact that your company’s actual location of doing business is in their jurisdiction (according to the principle of paying taxes in the country where the value is generated.)

It is therefore very strongly advisable, that when you set out in running your Estonian company, you pay a visit to a qualified tax advisor in your home country. Please explain to your tax advisor that you have established a company in Estonia and describe the business model that you intend to use. Ask your tax advisor to describe to you what tax obligations you may face in your home country (if any).

Please inform us about the advice you have received from your tax advisor in your home country and keep in mind that e-Residency Hub handles your taxation only in Estonia. We do not handle tax reporting in other countries and any tax reporting (and of course, paying these taxes in other countries) will have to be done by you. You can read more about taxation of e-residents’ companies on the e-residency blog: https://medium.com/e-residency-blog/how-do-e-residents-pay-taxes-73b8c96902b6

Labour Taxes

According to Estonian tax regulations and practice, in case a company generates sales revenue, the company also needs to pay salaries (i.e. if value is created, which you are selling, somebody needs to work to create that value and that work needs to be compensated by some sort of payments). Thus, in case your company sells goods or services, you are expected to pay salaries to the people who do that work. Holding companies, where value is generated simply by the increasing prices of the assets that the company passively holds, do not have to pay salaries if they do not wish to.

Employees in Estonia

In case you plan to employ people who are tax residents of Estonia, please send us their Estonian ID code and start and end dates of their employment contracts. You must do that BEFORE these people begin actual work in Estonia. We will enter this information in the Estonian Employee’s Registry.

NB! Employees who are not Estonian tax residents and do not live in Estonia do not need to registered! In case your company is paying salaries to its employees who are Estonian tax residents, the company is required to withhold the following taxes and transfer them directly to the Estonian Tax and Customs Board:

  • 20% of personal income tax
  • 1.6% unemployment insurance payment (employee’s share)
  • 0.8% unemployment insurance payment (employer’s share)
  • 33% social tax

In case the company has employees who are not Estonian tax residents and who live and work outside Estonia, salary payments to these foreign employees are not taxed in Estonia and we do not submit any tax declarations about these employees. In such case, these foreign employees must declare their income from your Estonian company in the country in which they live and are tax residents.

It is your responsibility to make sure any income of your foreign employees is properly declared in the foreign countries in which they live. In case any supporting documentation is required on behalf of your Estonian company – please let us know.

Business trips

As e-residents, you do not actually live in Estonia. When accounting for business trips, your home country rules apply (amount of per diems, what kinds of expenses can be considered business expenses, etc).

Dimitris Paraskevopoulos is a seasoned Greek entrepreneur who has been active in business since 1992. In 2019, he decided to merge his food, health and cosmetics business with his Estonian company, Gourmante Baltics OÜ, which he founded using e-Residency.

When it came time to establish his new company, Dimitris was looking for speed and simplicity, along with access to online tools which could help him efficiently manage his company from abroad.

Gourmante Baltics OÜ sells health and cosmetics products on Amazon and, using a distributor, Mediterranean food products in Estonian retail outlets. Dimitris’ products are produced outside Estonia in different parts of the world, including the US. Overall, Dimitris enjoys selling on Amazon as an e-Resident:

“In my experience, Amazon’s online business is a perfect fit with the online e-Residency environment. This is primarily because of the web-based tools offered by the programme as a whole, in addition to individual service providers such as e-Residency Hub.”

Estonia vs Greece

Comparing Estonia to Greece, Dimitris mentions that, while the process and speed of setting up a company in Greece has improved recently with the introduction of IKE (a type of Private Limited Company), accounting costs are still relatively high compared to Estonia. In Greece, most entrepreneurs pay at least €350-400 per month for accounting services. And in the case of Amazon sellers, accounting costs are significantly higher. Plus, legal and auditing fees in Greece amount to several thousand euros annually, whereas in Estonia they are typically much lower.

Banking poses further challenges. In Greece, opening multi-currency accounts is limited by local law. It is also impossible to connect a Greek bank account to an Amazon seller’s account, and exchange rates create additional costs which can often be quite significant. Finally, service fees in traditional Greek banks are widespread and very high (e.g. fees are charged for all incoming and outgoing payments, and even for simply checking an account balance). Compared to Estonian banks, which offer online services and reasonable fees, the difference is clear.

Taxation is another differentiator between Estonia and Greece. Greece imposes a 2% tax on all online advertising (no such tax exists in Estonia), and Greek tax requirements force entrepreneurs to maintain a separate receipt printer which is directly connected to the Greek tax authorities and which prints receipts the same day that sales are generated. For Amazon sellers, this requirement creates an unnecessary obstacle for smooth business operations — especially considering that online sales can be generated around the clock, including weekends and holidays.

Taking into account the above differences between Greece and Estonia, it seems clear that online access to service providers — as well as the flexibility and attention to customer’s needs that such service providers offer — make Estonia an easy choice when selecting where to incorporate your business.

Banking

Dimitris has chosen LHV as his banking partner in Estonia. In addition he is also actively using two large payment service providers — TransferWise and Payoneer. He describes his experiences as follows:

“I would particularly highlight the importance of multi-currency payment solutions for anyone selling on Amazon. If your income is generated in different currencies across various Amazon marketplaces (in our case: EUR, USD, and GBP), the ability to keep several currencies in your account and make payments from these respective currencies saves a lot of time and money while managing the company.

Payoneer is specifically designed for Amazon sellers. When your sales revenue reaches a certain level, you can start receiving advance financing, which can be important for cash flow management. TransferWise also offers strong value through competitive exchange rates. We use both of these service providers in our daily business.”

Web-based accounting platform of e-Residency Hub

According to Dimitris, using e-Residency Hub’s platform called Envoice to handle his purchase and sales invoices is very easy. It is so easy, in fact, that he has chosen to do it himself rather than asking an assistant to handle it.

Amazon sales accounting is handled by e-Residency Hub, which covers all bookkeeping and sales data. For VAT reporting outside Estonia, Dimitris uses Amazon VAT services. Dimitris’ personal e-Residency Hub accountant can extract data from his Amazon seller’s account and Amazon’s VAT service to ensure the company’s Annual Report includes all global VAT payments.

Dimitris continues:

“For transactions outside of Amazon, creating sales invoices in Envoice is very easy. Raising a new invoice only takes a few clicks, and this is especially true for existing clients. For purchase invoices, it is equally simple — I only need to forward the invoices to my custom Envoice email address, and my personal e-Residency Hub accountant handles the rest.

The mobile app is also something that I frequently use for receipts and paper documents. Even when I have to manage more documents than usual, the work required from me is never more than one hour per week. By giving my accountant viewing access to my company’s bank accounts, I save the trouble of having to send monthly bank statements to her, which reduces my workload even further.”

Working with e-Residency Hub

Dimitris describes his experience working with e-Residency Hub as follows:

“At first, I made my decision solely based on the e-Residency Hub website. Setting up my company online through e-Residency Hub was very easy and convenient. The whole process took only a few days.

Over the past years I have had the luxury of meeting the e-Residency Hub team face-to-face several times to discuss the specific needs of my business. The possibility to hold such personal meetings (either in person or via Skype) was also very important for me. 

All interactions since then have been very positive and extremely pleasant. I have always received quick answers to my accounting or tax-related questions. The opportunity to meet with the team during my visits to Tallinn has provided additional value. They even helped me find my business partner for trade financing!”

Establishing a company through e-Residency Hub is easy. The entire process can be completed in just a few days following the steps below.

Choose a name

Enter your desired company name. The company’s name must be entered using Latin characters. e-Residency Hub will automatically check against the Estonian Business Registry to ensure your selected name is available.

If your company name is similar to another name which is already registered, you will get an alert. It is then up to you whether to proceed with your selected name or choose another name. If you choose to proceed anyway, there is a chance that your selected name will be rejected by the court. In this case, you can still change the name and get your company registered without any additional costs.

Enter your company details

Enter your personal details (name and address). Note that the address where you conduct business will be publicly available on your company’s registration certificate. We will provide you with a legal mailing address in Estonia. You will be asked to enter your Estonian ID code, which is an 11-digit number printed on your e-Residency card.

Next, select your company’s business area. If your company’s business area is not listed, you may describe it in your own words and we will select the best option for you. Please note that you need to report your company’s primary field of activity to the Estonian Business Registry. If your business is complex and involves other fields, you do not need to specifically inform the Estonian Business Registry. However, if your primary field of activity changes, then you must accordingly update your entry in the Estonian Business Registry.

We also need information about other beneficial owners your company may have. “Other beneficial owners” are people who do not feature on a company’s formal registry card, but who in reality have a controlling role over the decisions the company makes. If such persons exist, you must provide their personal data as well. If such other beneficiaries do not exist, you must confirm this by ticking the appropriate box. Read more here

Describe your business

Tell us about your plans and the type of business you intend to conduct. This includes info about what you are going to sell, who are your typical clients and suppliers.

Choose your plan

Choose the pricing level that is best suited to your needs. We offer four pricing tiers to ensure a good fit for everyone. You are always free to change your plan in the future. If you need any support regarding our pricing plans, get in touch.

At this stage you can select the type of banking solution you wish to have for your new Estonian company. We currently work with a payment service provider TransferWise and a traditional commercial bank LHV. You should also read our article about selecting the best banking partner where we describe the key terms and conditions for their services.

For concrete step-by-step instructions click below

Review and pay

Review the summary page, which provides an overview of all details you have provided. If you need to change anything, you can go back and make the relevant edits. Once everything looks good, confirm your answers and pay. You can pay using credit card, bank transfer, or PayPal. As soon as payment is transferred, you will get a confirmation email and receipt.

Authenticate

After we have reviewed your application, you will need to verify your email address and digitally sign the company establishment documents using your Estonian ID card (learn how to digitally sign documents here). After digitally signing the documents, an Estonian court will make a formal decision and issue your company’s registration number. You will receive a confirmation email from the court within three business days.

Sign the contract

After your company has been formally established, you will be able to digitally sign a contract between your new Estonian company and e-Residency Hub.

E-Residency Hub acts as your company’s legal mailing address, physical mailbox, and main point of contact in Estonia. Any physical mail that is sent to your company’s Estonian address will be received by us.

Please reference the table below for details regarding our mail processing services:

Service
Price
Opening letters, scanning the contents, and emailing the scanned files to you. Free with any plan
Forwarding original hard copies by registered mail.

E-Residency Hub will provide you with a tracking number for every shipment. Within Europe, mail is usually delivered within 1–2 weeks; outside of Europe, mail may take 3+ weeks. Registered mail is handled by the Estonian Postal Service and the postal services of the receiving country.

 €36 per shipment
Forwarding original hard copies by courier.

E-Residency Hub will provide you with a tracking number for every shipment. Delivery times are typically 2–5 days. Mail sent by courier is handled by UPS.

 €108 per shipment

The above prices apply for letters and documents. All prices are inclusive of VAT. If you receive larger parcels that must be forwarded, the shipping price will depend on the size and weight of the package.

Addressing letters to your company

All letters and shipments sent to your company must also reference e-Residency Hub on the envelope or package. Below is an example of how the address must be written:

[Company Name]
Ahtri 12
10151 Tallinn
Estonia
Attn: E-Residency Hub

**Please note that without this reference to e-Residency Hub on the address label, the letter or package may not get delivered to us.

When to use your legal address

We recommend you use your company’s legal address only when it is required by the sender. For example, banks or payment service providers often refuse to send bank cards and similar sensitive items abroad; these must be delivered to your company’s legal address. In these cases, we will gladly receive the documents on your behalf.

However, we recommend that you use your actual address (outside of Estonia) for all day-to-day business communication, product samples, customer correspondence, and so on. Receiving mail yourself will save you time and money.

Archiving

If you require, we will archive incoming mail (specified letters and documents) for up to one year after the date received. Archiving is free of charge. If you would like to archive documents for more than one year, we reserve the right to charge a fee. This fee depends on the volume of documents to be archived. Archiving and storage of large or bulky items shall be agreed and billed separately on a case-by-case basis.

 

For easy remote administration of your company, you will be given access to our proprietary web-based accounting platform, Envoice. Access to Envoice is part of our services to you and is included at no extra cost.

Envoice makes it easy to do the following:

  • Send us your accounting documents, such as invoices and receipts.
  • Create your sales invoices and send these out to your clients.
  • Create travel and expense reports, which are necessary if you have business trips abroad or when your company must reimburse you for out-of-pocket expenses.

Documents sent to Envoice will be automatically routed to your personal accountant.

Creating an account

After signing the e-Residency Hub contract, you will receive an email from Envoice confirming that your account has been created. To get started, you will be asked to confirm your email address and create a password. Once your email address has been verified, you are good to go. After logging in, you will see your Dashboard, which includes the most important accounting metrics of your business.

Sales invoices

Envoice makes it easy to create sales invoices and send them directly to your customers via email. After inputting the sales values, Envoice will automatically calculate the correct taxes. You will also able to duplicate invoices from previous entires and choose your customer from a predefined list of past customers. This makes the creation of sales invoices much more efficient, as you don’t need to start from scratch every time.

Purchase invoices

After registering with Envoice, you will receive a personalised @envoice.ee email address. All purchase invoices should be sent to your personal Envoice email address, either in PDF or JPG format. Please make sure you send only one invoice at a time. Please also ensure each invoice contains the following:

  1. Title (e.g. “Invoice” or similar)
  2. Invoice number
  3. Date of issue
  4. Description of goods or services purchased
  5. Numerical data (amount, price of unit, total sum)
  6. Names of the seller and buyer
  7. Addresses of the seller and buyer
  8. Seller’s company registration number
  9. Seller’s VAT number (when applicable)

Please send your purchase invoices to your personal Envoice email address no later than the 5th day of the following month.

Note that you only need to send invoices and receipts which are related to your company’s business. Please do not send other documents, such as bank statements, payment confirmations, and so on.

All documents sent to Envoice will be digitised. This process is automatic and takes about six hours. Once your documents have been digitised, they will remain accessible to you under Purchases. From there, you can search and filter your invoices and receipts according to various criteria. In this way, Envoice also acts as a business archive.

Legal precautions

It is extremely important that your finances are conducted correctly according to the law. At e-Residency Hub, we will do our best to assist you in this regard, but you are still responsible for the following:

  • Manually upload copies of your bank statements every month (applies only if you are not a customer at LHV Bank).
  • Make sure all incoming payments have a corresponding invoice. You can create these using Envoice or upload your own.
  • Make sure all outgoing payments have a corresponding expense document.
  • Make sure all business expenses are proper and correct.
  • Reply to all e-Residency Hub emails and requests in a timely manner.
  • Review and sign documents, when requested.

Using Envoice’s Self-Service Dashboard should keep your life simple. Just follow the prompts and instructions to stay on top of your company finances.

In addition, each quarter we will prepare and send your company’s Balance Sheet and Profit & Loss statement. This way, you will have a better idea of your company’s finances.

Using the Envoice app

Envoice also has a mobile app for iOS and Android. It is available for free download. Once you have downloaded the app, you can can log in using the same username and password you use on the Envoice website.

The Envoice app allows you to easily scan paper receipts and invoices by simply taking a photo of them. Scanned receipts and invoices can then be automatically sent to your company’s accountant.

You can also use the Envoice app to generate travel and expense reports. By uploading scanned receipts in real time, you can easily track and manage travel expenses on the go. No need to face a mountain of paper receipts upon your return.

 

e-Residency Hub provides full accounting services for companies selling their goods on Amazon or other e-commerce platforms. The information below is based on the example of Amazon. In case you wish to sell your products using another e-commerce platform, please get in touch with us to discuss the details of our services to you.

During the process of company establishment, if you indicate that your business activities will include selling goods online, you will be asked to provide us with some extra data, which will help us to understand your business better and provide you with our services.

e-Residency Hub services to you

e-Residency Hub handles your company’s accounting. As e-commerce activities usually require you to submit VAT declarations in other countries of the European Union, we cooperate with a trusted third-party service provider to help you with pan-Europe VAT filings. Alternatively, you can order such services directly from Amazon.

Our service to you includes

  • Booking your aggregated sales data, based on the VAT reports generated by our VAT partner or Amazon VAT
  • Preparing and submitting your company’s Estonian tax declarations if applicable
  • Preparing and submitting your company’s annual report to the Estonian Business Registry
  • Collecting data from our pan-european VAT service providers and incoporating that into your company’s bookkeeping

Value Added Tax

Value Added Tax (VAT) is a topic which makes e-commerce operations in Europe different from many other types of businesses. You as an Amazon seller will need to register for VAT in the country(ies) in which your goods are being stored by Amazon. It is also necessary to keep track of your sales volumes in diferent EU Member States – once you reach a certain limit of sales in any given year, you will be required to also register for VAT in those countries as well and start paying VAT there.

As a seller on Amazon, your company does not need an Estonian VAT number. Instead, you need a VAT number in the country in which your goods are stored by Amazon. In case you choose to store your goods in several Amazon warehouses in several European countries, you need to apply for a VAT number in each of these countries. You will also need to submit monthly or quarterly VAT declarations in all the countries from which you have a VAT number.

It is important to keep in mind that each additional VAT number will create additional set-up costs and regular costs for you. These costs will occur because your VAT service provider will need to submit tax filings in each separate country and you will be required to pay VAT in each country.

Please read carefully the FAQ assembled by amazon on VAT issues

Every business needs a bank account to operate in the modern world. This is particularly true for companies managed online by e-Residents. At e-Residency Hub, we can help you through this critical step in the company formation process.

Estonian companies have access to two types of accounts:

  • Accounts at conventional commercial banks.
  • Accounts through online payment service providers.

Both types of accounts are available to e-Residency Hub users, but some restrictions and conditions apply.

Conventional commercial banks

E-Residency Hub’s official banking partner is LHV Bank, based in Estonia. Their policies for non-residents are described in detail here: https://www.lhv.ee/en/non-residents#business-client

In order to open an account, LHV Bank requires clients to have a “clear connection to Estonia.” This could mean that you have employees who live and work in Estonia;  that you own and manage property in Estonia; that you regularly receive or make payments to Estonian residents (private persons or companies); or other such connections. If you do not have a clear connection to Estonia, but your business operates online and is entirely service-based (e.g., programmers, app developers, etc.), then the bank may nonetheless agree to open an account for you.

Note that LHV typically does not work with companies handling cryptocurrencies or companies buying or selling physical goods (unless these goods are imported into or stored within Estonia).

To apply for an LHV account, you can begin the process online. To maximise your chances of a positive outcome, we are glad to review your application before you submit it to the bank. After completing the application, it usually takes 1–2 weeks for the bank to issue a response.

If LHV approves your application, you must travel to Estonia to personally identify yourself and finalise the account opening procedures. This is the only time you will need to be physically present in Estonia. Once your account is activated, you will be able to conduct all future business transactions online.

Payment Service Providers (PSPs)

E-Residency Hub formally cooperates with Wise and Payoneer to offer online payment services for our clients. After registering with e-Residency Hub, we will send you detailed instructions about how to open a business account with one or both of these providers.

Please keep in mind that both Wise and Payoneer are independent companies who will make their own decisions regarding their provision of services. Both companies have Know Your Customer (KYC) procedures and conduct thorough vetting procedures to validate any businesses applying for an account. Therefore, we cannot guarantee that you will be able to open an account with these PSPs. In most cases, however, e-Residency Hub users have not encountered any issues.

When seeking a payment partner, you are free to approach other PSPs, such as Paysera, Monese, or Revolut. However, please keep in mind that the account you open must belong to your Estonian company (not to you as an individual).

Bank cards

Both PSPs and conventional banks can issue official banking cards. These usually take the form of MasterCard or Visa cards which can be used to make payments online, pay at points of sale, and withdraw money from ATMs. Having an account with an associated banking card is often a prerequisite for opening accounts with payment gateways, such as PayPal or Stripe.

Permanent establishment

Permanent Establishment (PE) is a concept created for tax purposes. According to the OECD, a permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried out. The practical meaning of a PE is that it creates a taxable presence for a company outside the company’s country of establishment. A PE can also be triggered through individuals acting on behalf of a company. PE should not be confused with a place of business, place of tax residency, or place of effective management.

As each country has a different approach to PEs, be sure to always refer to available information about PE registration and compliance in the jurisdiction where your activities might trigger a PE. Also note the following:

  • A PE can only be created for a company in another country.
  • A PE cannot be created in the state where the company itself is established.
  • There can only be one PE per country.
  • PEs must be duly registered with the local tax authorities.
  • PEs are usually taxed as separate legal entities.

According to the above, an Estonian company cannot have a PE in Estonia. However, it’s possible that an Estonian company could have a PE in Germany, for example, if the company’s activities satisfy all requirements for creating a PE in Germany. Estonia exempts PE profits from Estonian corporate taxation, thereby avoiding double taxation of profits earned by business activities of a PE.

Dual residence

Most countries reserve the right to tax their residents (and their residents’ companies) on worldwide profits. Many countries have introduced broad definitions of who is considered a tax resident, and when definitions overlap, a taxpayer could be considered a tax resident in two countries. This is generally called Dual Residence.

In Estonia, the rule is simple: if a company is incorporated under Estonian laws, the company is considered a tax resident. All companies registered with the Estonian Business Register are considered tax residents and are therefore subject to taxation in Estonia.

However, in addition to being a tax resident in Estonia, some companies might have dual tax residence. For example, some countries stipulate that the place of effective management triggers tax residency. Thus, if a company was incorporated under Estonian laws but is effectively managed in another country, that company may be considered a dual resident and may have profits taxed in two countries.

Note that a company with dual residence is not the same as a company with permanent establishment in another jurisdiction. Also keep in mind that rules for determining tax residency are different for companies and individuals.

Overview of select countries

Below is a summary of how some countries understand permanent establishment and dual residency. The descriptions are based on publicly available information and are only meant as a quick reference. Always work with a local tax expert to clarify any tax consequences which may apply to your particular situation.

Ukraine

Permanent establishment

Ukraine generally follows the OECD definition of PE. Ukraine recognizes three types of PEs: Classical PE, Agent PE, and Service PE. Ukrainian tax law provides a list of common PEs, such as place of management, affiliate, office, server, and so on. The presence of an international tax treaty should override Ukrainian domestic rules if the treaty is more beneficial to the taxpayer. Please refer to the State Fiscal Service of Ukraine for more information.

Tax residency

In Ukraine, a company is considered a tax resident if it is established under Ukrainian law. Managing an Estonian company in Ukraine should not lead to dual residency. For more information, visit the State Fiscal Service of Ukraine: http://sfs.gov.ua/en/

Germany

Permanent establishment

According to German rules, a PE is any fixed business facility serving a corporate purpose. A permanent representative is someone who “habitually” deals on behalf of the principal (the principal being the Estonian company, for example) and acts according to the principal’s instructions. German tax treaties are usually in line with the OECD’s definition.

Tax residency

In Germany, a company is considered a tax resident if either its place of incorporation or its main place of management is in Germany. If you effectively manage your Estonian company in Germany, then the company may be considered a dual resident. In this case, the Estonia-Germany tax treaty or competent authorities should be consulted.

For more information, please refer to the German Ministry of Finance: https://www.bundesfinanzministerium.de/Web/DE/Home/home.html

United Kingdom

Permanent establishment

In the UK, a PE is created if the non-resident company:

  • has a fixed place of business in the United Kingdom through which the business of the company is wholly or partly carried out; or
  • has an agent acting on behalf of the company has and habitually exercises authority to do business on behalf of the company in the United Kingdom.

Tax residency

Companies incorporated abroad may be considered UK residents if the place of central management and control is situated in the UK. In this case, the company may be considered a dual resident. Please consult the Estonia-UK tax treaty or competent authorities. And for more information, visit HM Revenue & Customs: https://www.gov.uk/government/organisations/hm-revenue-customs.

Spain

Permanent establishment

Under Spanish law, a PE is created if a company has ongoing or habitual work facilities in Spain. An agent PE is created if a company acts through an agent who has powers to behave on behalf of the non-resident, and if such powers are exercised on a regular basis.

Tax residency

In Spain, a company is considered a tax resident if it was founded in Spain, or if its business activities are managed and controlled from Spain. In this case, the company may be considered a dual resident. Be sure to consult the Estonia-Spain tax treaty and competent authorities on this matter. And for more information, visit the Spanish Tax Agency: https://www.agenciatributaria.es/

France

Permanent establishment

In France, a PE is created through:

  • business activity conducted through an establishment (e.g. a branch, sales office);
  • business conducted in France by a dependent agent; or
  • the existence of a complete commercial cycle in France.

If there is any doubt, French tax authorities will rule on the existence or nonexistence of a PE.

Tax residency

Generally, only companies established under French law are considered French tax residents. Therefore, there should be no issue with dual residency pertaining to Estonian companies, even if the Estonian company is effectively managed in France. For more information, visit the Ministry of Action and Public Accounts: https://www.impots.gouv.fr/portail/

Turkey

Permanent establishment

Under Turkish law, the threshold for the creation of a PE is lower than that described by the OECD. Whether your activities create a PE in Turkey must be evaluated on a case-by-case basis. It is recommended to consult with the relevant tax authorities.

Tax residency

In Turkey, a company is considered a tax resident if the business’s headquarters are in Turkey. Therefore, if an Estonian company is headquarted in Turkey, the company may have dual residence. Be sure to consult the Estonia-Spain tax treaty and competent authorities on this matter. For more information, visit the Turkish Revenue Administration: https://www.gib.gov.tr/en

All companies in Estonia are required by law to keep accounts, submit regular tax declarations and pay the required taxes. All companies must also submit an Annual Report to the Estonian Business Registry. e-Residency Hub will provide you with a personal accountant who will handle your company’s full Estonian accounting (including tax accounting).

In some cases, depending on the type of business you conduct, you may need to pay taxes in other countries as well. We strongly recommend that you consult with a tax advisor in your home country about any international taxation issues.

Online accounting platform

For easy remote administration of your company, you will be given access to our web-based accounting platform, Envoice. Access to Envoice is part of our services to you and is included at no extra cost. After signing the e-Residency Hub contract, we will create an Envoice account for you. Envoice makes it easy to create sales invoices, process and archive accounting documents (such as purchase invoices and receipts), and create travel and expense reports.

Envoice also has a free mobile app available for iOS and Android. The Envoice app allows you to easily scan paper receipts and invoices by simply taking a photo of them. Scanned receipts and invoices can then be automatically sent to your company’s accountant.

All documents sent via Envoice will be digitised. This process is automatic and takes about six hours. Once your documents have been digitised, they will remain accessible to you under Purchases. From there, you can search and filter your invoices and receipts according to various criteria. In this way, Envoice also acts as a business archive.

Accounting documents

As you conduct your day-to-day business, simply forward your accounting documents to us each month, using Envoice. This includes the following documents:

  • Purchase invoices
  • Receipts
  • Sales invoices
  • Bank account statements

Using Envoice, accounting documents can be forwarded in real time as they are generated. This ensures a smooth flow of documents and prevents a situation where a large amount of receipts accumulates on your desk or wallet by the end of the month.

For the most streamlined experience, most users grant e-Residency Hub viewing rights to their company’s bank account details. (Note that giving viewing rights does not grant permission for e-Residency Hub to execute financial transactions on your behalf.) With viewing rights enabled, you do not need to send us your account statement every month. Everything will be handled for you in the background.

Purchase invoices

After registering with Envoice, you will receive a personalised @envoice.ee email address. All purchase invoices should be sent to your personal Envoice email address, either in PDF or JPG format. Please make sure you send only one invoice at a time. Please also ensure each invoice contains the following:

  • Title (e.g. “Invoice” or similar)
  • Invoice number
  • Date of issue
  • Description of goods or services purchased
  • Numerical data (amount, price of unit, total sum)
  • Names of the seller and buyer
  • Addresses of the seller and buyer
  • Seller’s company registration number
  • Seller’s VAT number (if applicable)

When possible, please submit invoices in English, Estonian, or Russian. If that is not possible, please include an explanation of the invoice in your email.

Receipts

Unlike invoices, receipts typically do not include the buyer’s name, and in most cases, receipts are printed on paper rather than transmitted digitally. Using the Envoice app, you can easily scan paper receipts by simply taking a photo of them. Scanned receipts can then be automatically sent to your accountant via the Envoice app.

Please ensure that receipts sent to Envoice only concern business-related expenses. If you visit a store to make both personal and business purchases, always execute two separate transactions so that personal expenses are not mixed with business expenses on the same receipt. All receipts sent to Envoice must include:

  • Date of issue
  • Receipt number
  • Description of goods or services purchased
  • Numerical data (amount, price of unit, total sum)
  • Name of the seller
  • Address of the seller
  • Seller’s company registration number
  • Seller’s VAT number (if applicable)

Travel expenses

Business trips are defined as short-term trips with a specific, business-related purpose. Business trips usually start from your permanent place of employment and typically involve business-related activities such as meeting with customers, visiting project sites, attending conferences, and so on.

When travelling for business purposes, it is important to track expenses such as accommodation, taxi rides, meals, airfare, train tickets, and so on. The Envoice mobile app makes this easy. Simply take a picture of any relevant receipts using your mobile phone, and the Envoice app will scan the document, upload it to the cloud, where it will be accessible to your personal accountant. No need to face a mountain of paperwork upon your return.

For a video tutorial on how to create Travel Reports using the Envoice, please click here.

For a video tutorial on how to create Expense Reports using the Envoice, please click here.

Business-related expenses

Only expenses with a direct connection to your business can be considered company expenses. If you use the company bank account to pay for personal expenses or other non-business expenses, an additional 25% corporate income tax applies. VAT is not recoverable on such expenses.

If your accountant needs additional clarifications about how some expenses are business related, you will receive a notification. In addition, you can always ask for advice on whether an expense is business-related or not. However, the final decision regarding business expenses rests with the company’s board members. Board members also carry the responsibility for that decision in the case of any future disputes with the Estonian Tax and Customs Board.

Sales invoices

Envoice makes it easy to create sales invoices and send them directly to your customers via email. After inputting the sales values, Envoice will automatically calculate the correct taxes. Our service contract stipulates that all sales invoices should be created using Envoice. This ensures that all sales invoice elements are added automatically and correctly.

For a video tutorial on how to create sales invoices using Envoice, please click here

For more information on creating a sales invoice using Envoice, see here:

Bank account statements

Each month, you are required to submit monthly statements for all bank accounts of your company (this includes accounts your company may have with payment service providers, such as TransferWise, Payoneer, PayPal or others). These statements must cover the entire period of the previous calendar month.

The easiest way to deliver your bank statements is to give your accoutant at e-Residency Hub the viewing rights to your company’s bank accounts. This way your accountant can extract the monthly statements directly, without any actions required from your side.

Oliver Gasser is a Swiss entrepreneur and founder of the software company Moduulo. The company helps clients easily measure time spent on projects and automatically issue sales invoices based on logged time. Oliver has been an Estonian e-Resident since 2018.

Why did you establish a company in Estonia as an e-Resident?

e-Residency allowed me to establish and run my business as an Estonian company. As a Swiss businessperson, this has several clear benefits:

  • In Estonia, I set up my company in two business days and paid just €215. Establishing a company in Switzerland, on the other hand, must be managed by a notary. This is time consuming and expensive, resulting in initial costs of around CHF 3,000 (over €2,800).
  • In Estonia, I was able to initially set up my company without paying in the share capital. And even after the share capital of €2,500 had been paid, I could use this money for company expenses and investments. In Switzerland, a company’s share capital is almost 10 times larger (CHF 25,000, or around €23,350) and it must be deposited as collateral, meaning it can’t be touched. For a startup in its initial phase, the Estonian requirements are far more favourable.
  • In Estonia, everything from company formation to tax declaration can be handled online. In Switzerland, there is still a lot of physical paperwork which needs to be submitted, both at the cantonal and federal level. The Estonian option is definitely more hassle-free for me.
  • In Switzerland, an accountant charges roughly CHF 100 per hour (over €93/hour), and the amount of hours required for certain tasks is often difficult to predict. In Estonia, e-Residency Hub offers a much more transparent and affordable model without sacrificing quality or reliability.

Why did you choose e-Residency Hub?

As probably all e-Residents do, I browsed the different service providers represented on the e-Residency marketplace and analysed their service packages, their level of customer service, and their prices. What attracted me to e-Residency Hub was the clarity of their service description — you know exactly what you pay for and what you get. In addition, the different plans listed on their website provided me with the flexibility to start small and later upgrade as my business grew.

I found it quite easy to combine the accounting services offered by e-Residency Hub with an online payment account offered by Holvi.

What is it like to work with e-Residency Hub?

e-Residency Hub has helped me every step of the way. The service has been smooth and seamless, and I really have not needed to put too much effort into my company’s accounting details. I find that my accountant is very quick to respond to my emails and gives me very professional advice.

The way it works is simple — I just forward my purchase invoices to the Envoice system and use the mobile app for any paper receipts I have. And that’s it. I leave the rest to my e-Residency Hub accountant. As I travel a lot between Estonia and Switzerland, Envoice’s “Travel Report” feature has been particularly handy.

I also received helpful instructions regarding how to use my e-Residency card to provide digital signatures. This helps not only with accounting, but with signing documents pertaining to the startup accelerator as well.

How is business?

In 2019, we were selected to be part of “Startup Wise Guys,” an Estonian startup accelerator. This was a key turning point for us. I would say that being a part of the Estonian business ecosystem — and the startup community, which Estonia strongly supports — was essential in getting this nomination.

Since then, we have been able to put together an efficient team to focus on our product very intensively. From the beginning in January 2020, we have started to generate revenue. We continue to work hard in an effort to make Moduulo a success story.

I would wholeheartedly recommend Estonian e-Residency — and e-Residency Hub more specifically — to anyone who wishes to run an efficient and hassle-free business online.

Today the Estonian e-Residency celebrated its 5th anniversary. A formal celebration of this milestone took place in Tallinn, Estonia, in an event opened by the President of Estonia, H.E. Mrs. Kersti Kaljulaid.

In her address, President Kaljulaid emphasised the innovation and boldness which was associated with e-Residency when it was first launched and expressed her delight at the fact that e-Residency has helped introduce Estonia to the wider world. She also expressed her hope that e-Residency will continue to grow and support entrepreneurs world-side in building and growing their business online, irrespective of their origins, race or gender.

e-Residency Hub General Manager, Mr Martin Lään took the stage on behalf of all the service providers. Mr Lään emphasised the need for all service providers to continuously innovate and provide increasingly more advanced services to the e-Residency community. Only by constantly striving to offer ever larger added value to our customers, can we ensure that Estonian e-Residency remains on the cutting-edge of government innovation and global online business environment.

e-Residency Hub wishes to thank the organsers for the opportunity and for the very well organised event.