What is E-Residency ?
Estonia’s e-Residency is a government-backed digital identity that allows non-residents to start and manage an EU-based company fully online. As of 2025, over 100,000 people have become e-residents. You can:
- Launch an Estonian business from anywhere in the world
- Access secure digital signatures and encrypted communication
- File taxes online
- Work with EU clients more credibly
- Avoid costly bureaucracy in your home country
💡 Tip: E-residency does not give you tax residency or a visa. It is strictly for business access.
Benefits of Setting Up an Estonian Company
- No corporate tax on retained profits
- 100% remote setup with transparent regulation
- Full EU access and credibility for digital services
- No requirement for Estonian nationality or residency
- Low operating costs via virtual office services
New in 2025: Some e-residents now opt for fintech solutions instead of Estonian banks due to stricter KYC rules.
How to Start a Business in Estonia
To set up a company in Estonia using e-residency, follow these steps:
- Apply for e-residency: Complete the online application form on the e-Residency website, provide the required documents, and pay the application fee.
- Receive your e-residency kit: Collect your digital ID card, card reader, and instructions from an Estonian embassy or consulate once your application is approved.
- Open an Estonian bank account: Research the requirements for opening a bank account at various Estonian banks, and choose one that suits your needs.
- Register your company: Register your company through the Estonian Business Register's online portal by choosing a unique name, determining the company structure, specifying the share capital, drafting the articles of association, and providing details of the company's management board.
- Obtain a legal address: Use a virtual office service provider if you don't have a physical location in Estonia.
- Register for VAT (if applicable): Register your company for Value Added Tax if your annual taxable turnover exceeds €40,000.
Common Pitfalls to Avoid
- Using personal bank accounts for business payments
- Missing deadlines for annual reporting (can lead to big penalties)
- Assuming e-residency equals tax residency
Bonus: Can I Work with Clients Without a Company?
Yes. In the Estonia, company formation is easy, but tax legislation is extremely important and high penalties can be paid if mistakes are made. With Juuli, freelancers can create legally compliant invoices and receive payments without setting up a legal entity. Perfect if you're testing the waters or want to avoid upfront costs.
Final Thoughts
Estonia's e-residency program offers a unique opportunity for entrepreneurs to establish and manage companies remotely, benefiting from the country's business-friendly environment and access to European markets. By following the steps outlined in this guide, you can take advantage of this innovative program and set up your own Estonian company with ease.
Whether you plan to fully register in Estonia or want to operate as a freelancer first, 2025 brings more flexible options than ever. E-residency is powerful, but not always necessary. Be strategic—and stay compliant.
