Estonia is a European country, the second-fastest-growing after the Czech Republic, with the smallest public debt and a very high credit rating. These parameters define it as a steadily developing stable country. Why is this important for business? Stability will help maintain your success, and indicators of general economic growth will have a positive effect on the development of any company.
An additional advantage will be that Estonia is the EU and it, like all EU countries, is subject to the internal trade, tax, and customs rules of the union.
Geographical position
Estonia is a crossroads between Eurasia, the wealthy countries of Scandinavia, and the developing countries of the Eastern Bloc. And it has access to the sea and ice-free ports. A convenient location allows you to optimize transport and logistics costs. Transport services are one of the actively growing industries in Estonia and Estonia is in 3rd place in the world (out of 181 countries) in cross-border trade. Those. export-import transactions take place in Estonia quickly, easily, with a minimum set of documents, and in the shortest possible time. And this is not the only geography. It is also the level of development of service and technology. And for your information, Estonia is also striving to digitize logistics documentation in the EU.
High level of technology development
Within the framework of the Estonian digital state project, Estonians have digitized everything they can reach. This is an amazing project and worth writing about separately. Moreover, Estonia continues to develop, covering all new industries. Now it allows:
- apply for electronic citizenship;
- conduct 100% of document circulation in electronic form;
- conduct a dialogue with government agencies through electronic; portals, excluding personal presence and the human factor;
- submit tax information
The point of the project is to gradually reduce to zero human participation in routine processes and leave people only in key positions that require decision-making. People in Estonia have found more
interesting activities than shifting pieces of paper! A pleasant bonus is that corruption does not exist in such conditions – it is simply impossible, and the speed of work of civil services has become almost instantaneous.
Estonia is the first country in the world where IT technologies have killed the bureaucracy.
Tax advantages
Estonians decided to create a prosperous European country. Such a country needs advanced technologies, jobs, a powerful social sphere, stability, prospects, and guarantees. We need an environment that is as favorable as possible for the growth and development of real
business. Direct tax cuts do not develop the economy; it only attracts capital transit companies (including those from the gray and black zones). Money is pumped through banks, but this does not affect the development of the country. We need a middle ground. The main points of the “golden mean in Estonian” look like this:
- 0% income tax – in Estonia it is beneficial to keep the profit inside the company and invest in development. Only dividends are taxed at 20% if the company pays them;
- Zero tax on the purchase of the real estate;
- 0.1 – 2.5% – tax on land acquisition;
- No vehicle tax;
- The company pays VAT only if its domestic turnover is more than EUR 40,000;
- A company with an Estonian jurisdiction does not pay VAT on transactions within the EU and is not subject to customs duties;
- No inheritance tax.
- If you study the Estonian tax rules in more detail, you will find many interesting things there that are directly relevant to your situation and your niche.
Banking system
The banking system of Estonia is the Scandinavian capital. This means that it is stable, reliable, and high-tech. The basic unit of account is EUR. Banking fees are among the lowest in the EU.
Having a successful operating business and a history of relations with the bank gives company owners access to cheap European loans.
Tolerance and language
Respect for the individual, for everyone’s boundaries, and freedom of choice is the basis of the European mentality and Estonia is an excellent example of this approach. It may not be that smooth on a deeper level, but if you just do business there, you will be very comfortable. Estonians are wonderful, calm, friendly people.
Residence permit
A company with Estonian jurisdiction has a lot of advantages, in addition to the possibility of obtaining a residence permit in one of the EU countries. By the way, when you are registering a company, you are entitled to a one-year (hereinafter three-year) business visa.
