Today I applied to become an Estonian e-Resident. Sometimes this is called an “e-Citizenship”, but that is a misnomer. My citizenship has not changed. I don’t get any new rights similar to what a naturalized Estonian would expect.
So what did I pay 100 euros for? A login, attached to my identity.
And why would I want that? Because it will enable me to start an company in Estonia. It doesn’t mean I will be paying taxes in Estonia, or that I intend to move to or visit Estonia (although I might want to open a bank account there at some point). But it gives me a login to their e-Bureaucracy, where I can deal with the proper authorities and create a new legal entity in a place I have never been. That feels very 2019.
I’m using Xolo for all this. The product Xolo Leap is priced at 79 euros per month (49 euros until I start making money), helping me get started and doing my accounting and taxes. There are some associated startup costs, like ~230 euros in state fee.
What do I hope to gain from this? I count three things.
- Never having to do this again. I’m getting ready to relocate to a new EU-country, Germany. I don’t strictly need to shut down my current business for this, but I predict some nuisances if I don’t. Moving is already big enough of a deal that I would prefer if it didn’t also complicate my business dealings. Also, I was intending to create a limited liability company anyway. Now I’m doing it in Estonia instead of in Sweden or Germany.
- A mostly automated accounting flow. Xolo seems focused on automation, which gives me the right balance of control and simplicity. This is far from unique, there are similar services in Sweden, but I’ve been excited to try one.
- Paperless and remote. All contact with governments is via email. That’s not mostly-paperless-and-sometimes-that-really-important-piece-of-paper-you-need-to-hold-onto. It’s no. Papers. (Well, except that ID card, but meh). From what I gather, I won’t need to save any of my physical receipts once I have digitized them, wheras in Sweden I need to keep the physical copies of all my receipts for 3 years. I can get a physical address from Xolo, and every piece of mail they get they scan and send to me. This truly sounds like heaven.
- Ease of expansion/transition. If I want to upgrade to a more advanced tax and accounting service, I will be able to do so without setting foot in anyone’s office. There also seems to be a good amount of service providers that specialize in what other jurisdictions shy away from: blockchain and cryptocurrency activities.
I generally expect this experience to be smooth (except having to make a visit to Stockholm and perhaps one to Tallin in the future). But I foresee some possible problems:
- Local tax-advisors may not be hip to it. I suspect I will want to (and need to) engage a German advisor, so I can only hope I will be able to find one who doesn’t mind the slighty unorthodox setup.
- I don’t speak the local language (though all information is available in English) which could become annoying if I for some reason need to deal with a local government, or a court.