e-Residency Investing – 3 Easy Investments … And You’re DONE!

There are 3 essential parts to operating a successful Estonian company:

  1. maximizing your profits,
  2. minimizing your expenses (fees – think currency conversion, payment processing, accounting)
  3. investing the difference (your company funds).

Seems pretty easy and straight-forward, right?

e-Residency Card

Yet, What Are 99% of People Doing?

MOST PEOPLE focus ALL of their efforts on the first part – maximizing how much money they make. Think about it: Everyone is obsessed with how to make more money, how to increase their profit.

FEW PEOPLE take the next step, analyze their business and are diligent when it comes to optimizing monthly overhead, avoiding unnecessary fees and generally, optimizing costs.

This can be a bottomless pit and quite frankly, if you’re a serious business owner, there’s no way around this part.

ALMOST NOBODY focuses on the 3rd essential element of a successful Estonian company, which is investing. Either they think it’s not worth it, don’t know that the option to invest with your Estonian company even exists or they assume it’s too complex anyway.


Previously, I have talked about replicating the All Weather Portfolio. For some, this portfolio setup might be right.

All Weather Portfolio Ray Dalio

For most Estonian business owners, however, it’s practical to stay flexible and keep the investing time-frame below 10 years.

When investing as a private person, you CAN (and probably should) invest with a long-term perspective in mind. Holding on to your investments for decades shouldn’t be a problem.

When investing via your Estonian company, it’s smart to stay (somewhat) flexible. Perhaps you want to take the money out of the company in 5 years, or invest your funds back into the business.

Take a look at the spreadsheet below.

The combination of the first 3 ETFs is what I consider short-term flexible.

Based on historical returns, you can’t expect huge up/downs, thus, if you wanted to sell a few years from now, it would probably not be a problem.

If you want to replicate the complete All Weather portfolio, you would also buy the greyed out ETFs listed.

e-Residency Estonia Investing


Annual costs of the ETF – Typically, there are similar ETFs with slightly different TER (Total Expense Ratio) available.

The IS3N you see above – there’s another, similar ETF with a 0.25% expense ratio.

TER Total Expense Ratio

It pays off to compare different ETFs (in this case, the one I have listed IS the most cost-effective Emerging Markets ETF).

Total number of ETFs – Each trade costs money. In the case of LHV bank, you pay €11 per trade + 0.3% of the trade volume.

You can do the math: If you invest in 10 ETFs, you pay a minimum of €110 in trading fees; if you invest in only 3 ETFs, that would only be €33.

Thus, it makes sense to limit the number of ETFs to the bare minimum. If the ETF doesn’t serve a purpose, don’t buy it.

Limit Buy Order ETF

With LHV bank, you have access to crypto ETFs (Bitcoin, Ethereum, Ripple) – you can add those to your portfolio if you’re looking for something that is high risk and can potentially generate a higher return as well.

To Invest, You NEED THIS …

To invest, you need a real bank account. You CAN NOT use your PayPal business, TransferWise or Holvi account to make investments.

Also, you need to apply for an L.E.I. which is the Legal Entity Identifier.

In order to buy U.S. securities, you also need to fill out the W-8BEN-E form; most likely you don’t qualify for investing in the U.S. stock market anyway as there is a very strict set of requirements you need to meet (e.g. prior investing experience, €500.000+ portfolio …)

However, you have access to many non-U.S. ETFs which are traded in countries such as Germany, Canada, the UK, Japan, etc. from investment management companies such as

  • BlackRock
  • Lyxor ETF
  • Xtrackers ETFs

Stop wasting time, start investing!