Today’s video is a collection of Q&As related to e-Residency, Amazon FBA, banking & LeapIN’s accounting services.
In short, a variety of topics that will be interesting for anyone who plans on starting an e-Residency business in Estonia.
Let’s get started!
How long did you have to wait to have your e-Residency application approved?
I just looked through my email correspondence and surprisingly enough, it only took 7 days from the day I submitted the application to the time I received confirmation that e-Residency was granted.
The appointment at the embassy to pick up my e-Residency card was exactly 10 days later.
All in all, from submitting my application to receiving the card, the entire process took exactly 17 days.
Can you open a bank account in Estonia without going there?
No, not as an e-Resident at the moment. There are other accounts which you can open remotely and use to receive wire & online payments – such as TransferWise/PayPal/Holvi – but the “real” bank account requires a face to face meeting.
Somebody has pointed out that SEB offers an account that can be opened remotely. That’s true, but as a e-Resident, you don’t qualify and besides, you’d need to have ties to Estonia such as being a resident, investing in real estate or business activity in Estonia.
In short, not for e-Residents & online businesses.
Could I use my e-residency to set up a private fund with LHV pank and invest. What would my business costs be?
You can use your company’s fund to invest – in fact, that’s a good idea anyway rather than having the money sit in your bank account at today’s low interest rates.
Keep in mind that while you can invest your company’s funds, you can not open a company purely for the purpose of investing. That can not be your main business activity.
That being said, the investing is done under your company’s name. After all, you’re using your company’s funds, not your own.
There shouldn’t be any ramifications in terms of your personal taxes, but of course you’d have to look into the specifics of your tax residency.
Business costs would be the same as you’d pay anyway, e.g. if you’re using LeapIN, you pay for your monthly plan regardless of whether you invest or not.
The actual costs of the fund you will have to look up. Almost every fund, every ETF has a management fee which you should consider. It can be as little as 0.04% or as much as a few percent.
There will also be transaction fees … but again, covering all details of investing is beyond the scope of this video.
In regards to visa or hiring people from overseas, are there any benefits when opening a company in Estonia?
No and I have already pointed that out in a previous video. e-Residency has nothing to do with an actual residency, nor does it confer citizenship or tax residency.
In regards to hiring people from overseas (or anywhere, really) you can do that.
You can pay a freelancer or subcontractor, which would simply be a business expense. If you’re using LeapIN, all you have to do is upload the invoice to match the expense.
You can not employ foreign nationals with tax residence outside Estonia. In most cases, that’s not practical or even necessary as most jobs can be done on a freelance-basis anyway …
When I apply for e-residency in Estonia, I understand I can open a company as a next step. I can also open a bank account, so this bank account will be in my personal name or company’s name?
This will be your business bank account. Funds in that bank account are owned not by you but your company.
Money in that bank account can only be used to pay for business-related expenses. Business funds and personal funds need to keep separate at all times.
This applies to all “money” accounts, whether that’s your PayPal, TransferWise or LHV bank account.
I know that LeapIN is working on supporting physical products (Amazon FBA) and that they don’t support such businesses right now. My question is, can they still help establishing a company for that kind of business?
At the moment LeapIN does not support transactions with physical goods. Selling physical goods such as Amazon FBA requires additional features such as inventory, comes with more complex VAT.
LeapIN will only help you establish a business for which you use LeapIN.
LeapIN won’t support this type of business within the next few months, so if you plan on starting right now, your best bet would be to look for an alternative service provider.
Speaking of alternative service providers …
Are there any alternatives to LeapIN?
Yes, there are almost a dozen service providers that will help you with your e-Residency company, however, keep the following in mind.
I’ve found LeapIN to be the cheapest service provider with a flat fee. Most other providers require you to pay for every little service separately.
Plus, LeapIN has email support, their platform is very easy to use, PayPal & bank account integration …
To see all service providers, you simply head over to the e-Residency website.
If I get Estonian e-Residency, can I open a PayPal account with an Estonian address, if I am not resident there?
I thought I address this question because there is quite a bit of misinformation floating around.
Some people have stated that in order to open a PayPal account for your e-Residency business, you need to have an Estonia IP address, therefor anytime you log in to PayPal, you need to use a VPN.
I can tell you that’s 100% inaccurate.
You CAN open a bank account & PayPal business account WITHOUT being a resident because both accounts are under your company’s name.
Your company is a resident in Estonia. That’s all that matters.
You can open your PayPal account from outside of Estonia. VPN not required or needed. All you need to do is submit documentation that you own the Estonian company.