Consider Estonia When Starting An Online Business

When people tell me they want to start a white market business in the United States I strongly encourage them to think twice. Between the never ending rules and restrictions and the high taxes the United States is a terrible place to start an above the ground business. Fortunately we live in a world where those imaginary lines on maps are becoming less relevant. A while ago Estonia announced it’s e-residency program, which allows people to become virtual residents of Estonia. In an article discussing Estonia’s new deal with BitNation I noticed the e-residency program might include some real benefits:

Estonia, a country at the forefront of modern e-government, has been offering efficient online services to its citizens for more than a decade.

“By offering e-residents the same services, Estonia is proudly pioneering the idea of a country without borders,” proudly states the e-residency website. In particular, e-residents can digitally sign, verify and encrypt documents and contracts, establish an Estonian company online in 24 hours with a physical address in Estonia provided by an external service, and administer the company from anywhere in the world.

Currently, establishing an Estonian bank account for the company requires one in-person meeting at one of the banks that recognize e-resident smart ID cards – currently LHV, Swedbank and SEB – but once the account is established e-residents can manage e-banking and remote money transfers from anywhere in the world.

An appealing feature of e-residency for entrepreneurs is that, in Estonia, company income is not taxed. Therefore, compliance is simplified and all income is available for re-investment. However, since e-residency doesn’t imply tax residency, e-residents are supposed to pay taxes at home for the money that they take out of the company.

The question here is how much information does the Estonian government voluntarily provide other nations. If it hands over all business information upon request this e-residency program probably isn’t going to be that useful. But if it’s unwilling to hand over information and instead relies on business owners voluntarily providing their home countries tax information this could be a boon.

I bring this up because I believe it’s a good idea to keep an eye out for good deals. My preference is for underground businesses but I know a lot of people want to operate in the white market because it’s easier. Just because you want to operate in the white market doesn’t mean you have to play by the United States’ draconian rules or fund its insatiable war machine. E-residencies are likely to become more commonly available as other governments realize the wealth they could steal by offering denizens of foreign countries a better deal. After all, many great conquers managed to sign up a lot of foreign nationals by offering to steal far less from them. There’s no reason you can’t profit a bit by taking such offers when they’re made.