Here are some of the most frequent questions our clients have asked.

What is e-Residency?  

Estonia is the first country to offer e-Residency, a government-issued digital identity and status that provides entrepreneurs with access to Estonia’s transparent digital business environment. You can find out all about e-Residency, who can apply, how to apply etc. directly on the e-Residency webpage – https://e-resident.gov.ee/become-an-e-resident/

In case you need help with your application, our team can also gladly help you with the process.

What are the benefits of e-Residency?

Starting an EU company

  • Registering an EU-based company entirely online
  • Accepting online payments through providers like PayPal
  • Owning your company without the need to appoint a local director

Location-independent business

  • Starting a company 100% online from anywhere in the world
  • Travelling and operating your business remotely
  • Moving abroad without the need to re-establish your company

Growing your business remotely

  • Signing, authenticating, encrypting and sending documents digitally
  • Declaring business taxes online
  • Accessing EU Single Market and cross-border capital

Being a part of a global community

  • Networking with e-Residents across 165+ countries
  • Connecting with service providers in a growing marketplace
  • Discovering new ways to grow your business

What services does Silva Hunt offer?

Silva Hunt is an e-resident company service provider for advanced businesses and entrepreneurs who are looking for a hassle free business environment. If you want easy access to the European single market, a stable jurisdiction and an advanced digital, paperless and location independent company structure, we can gladly help you out. The limitations of other service providers are just our sweet spot: advanced business models with demanding requirements.

Do you support holding companies?

Yes. You can also read more why it is a great idea to have a holding company in Estonia –

Do you support e-resident companies whose business is in e-commerce?

Yes. We have a lot of clients in e-commerce, Amazon FBA etc. E-Residency can be a great solution to make it easier for online sellers. There are some complex EU VAT regulations in place that e-commerce sellers have to take into account. For example complex VAT regulations difficulties finding the right country to establish a company, issues with high incorporation costs, large amounts of bureaucracy etc. However, there are also many benefits running an Amazon FBA business in Europe with an Estonian company.

  • It is much more cost-effective incorporate in Estonia, compared to most of the other EU countries. Also, lower administration costs compared to other EU countries
  • No paperwork, no bureaucracy, and no local director that has control over your company. You have full control over your company and its activities
  • 0% corporate tax on non-distributed profits (if you owe taxes in Estonia)
  • The online state system RIK allows you to access and monitor your company’s registration files with transparency
  • Remote business management via many digital solutions, including digital signatures.
  • Shared capital payment for a ‘Private Limited Company’ is just 2,500€ and are not compulsory to be paid when first starting off.
  • Last, but not least – you can grow your company with the help of the the e-resident community where experienced and like-minded entrepreneurs around the world with Estonian companies are happy to  share valuable information with each other.

Do you support companies who are dealing in cryptocurrencies?

Unfortunately not.

Do you help e-resident companies obtain necessary licenses? Absolutely. There are some business activities that are subject to special requirements and you will need to submit a notice of economic activity or apply for a business license. If applicable, you will need to obtain the necessary licence before you begin business activity. These business activities include areas like tourism, finance and financial activities, labour market, management consultancy or insurance that require a license according to the laws of Estonia. We will gladly help you obtain the necessary information documents and go through the necessary procedures with you.

You can also find a list of licenses and economic activities in the State Portal.

Another option to check which area of activity requires a license or a notice of economic activity, is to use the EMTAK Search. After you find your business activity, scroll down to expand the Details section and check for special requirements.

Do you accept e-resident companies who would like to come over from another service provider?

Yes. We understand that sometimes your previous service provider does not match the expectations of your business anymore or does not offer all the services that your company might need. We will help you with the transition process, and assist you in gathering all the necessary data that you need to take with you. NB! Transferring from one service provider to another can be done anytime, but it is easiest to do in the beginning of the fiscal year.

In businesses everything is structured. Weather forming a new company or combining already active companies need of creating a business structure and placement of shares may arise.
To arrange this we use term of holding structure – association that holds shares in subsidiaries or is defined as parent company. According to the Estonian Commercial Code, the criteria of being a parent company is majority in votes or controlling influence in another company.

Holding companies can be classified by function as following:

  1. Holding company with independent economic activity. The parent company is actively engaged in economic activities and its subsidiaries operate as agencies and branches in other countries.
  2. Administrative holding company. The parent company determines the principles and procedures for making and managing decisions in all subsidiaries, including strategic and capital flow management.
  3. Financial holding company. Such a parent company is mainly intended for asset management, it does not perform any control or management function. Holds and supplies capital to subsidiaries or new business lines and expansions.
  4. Organizational holding company. The parent company regulates the internal organization and allocates activities and responsibilities across business areas.
  5. Holding company as shareholder. The parent company acts as a shareholder and the economic activities are carried out in its subsidiaries.

Holding companies with all these functionalities can be established in Estonia. As an example headquarters providing centralised functions (marketing, human resources, financial and corporate governance) or holding companies with the aim of holding shares of subsidiaries.
The advantages of setting up the holding structure in Estonia are easy tax system, good economic environment, skilled workforce and good access to e-services.

7 reasons why Holding Company as a shareholder in Estonia is a good idea:

Business friendly tax system

The Estonian corporate tax system is unique in Europe as the profit for the financial year is not subject to income tax. This allows the taxation of profits to be deferred indefinitely and reinvest the earned profits. The income tax liability arises from the distribution of profits, which is usually the payment of a dividend. The tax burden on dividends is 20% and the tax amount is calculated on the net basis – on the amount of the dividends paid out.

A lower tax rate of 14% can be applied to regular dividends. In addition, there is a 7% withholding tax, which applies if the dividend is paid to a natural person. In the case of a non-resident individual, the withholding tax rate may be reduced by means of tax conventions. However, in the case of dividends paid to resident and non-resident legal entity, the final tax is 14%.

Well-functioning e-services

The business registry is an e-service. Establishing companies and making changes to the register is done online. Shareholders and board members can apply for e-Resident status and receive a smart card with a chip that allows access to all e-services, including the digital business register and documents. Further information on applying for e-residency can be found here: https://e-resident.gov.ee/eesti/

The holding company is 100% owned by its owner

A shareholder of a holding company can be both a shareholder and a member of the management board. The business register is public and changes to the register can only be made by a shareholder or board member. All changes will be notified immediately.

A shareholder may transfer his shares to another person in public notary with regular contract or on the basis of a simple written agreement if the shares are registered in the securities register.

The transfer of shares in a holding company is tax free

If a shareholder of the holding company decides to transfer his shares it is considered tax free in Estonian income tax law. The tax issue may arise if the property of the holding company is real estate located in Estonia.

The holding company shall not pay income tax on the purchase or sale of the shares in the subsidiary

If the holding company decides to sell its shares in a subsidiary located in Estonia or in other countries, the holding company will not be liable to tax on the profits arising from the sale of the shares. Thus, it is possible to sell shareholdings and use the capital tax-free for investments or to lend.

Acquisitions of shares in other companies no tax liability arises. Often, natural persons who own shares transfer them to their holding company. Participation in other companies can also be used to increase the share capital of the holding company.

Existence of professional service providers

There are a number of professional service providers in Estonia that provide the services required by e-residents to meet the requirements of Estonian law. Such requirements are usually the contact address, the contact person and the organization of accounting, the submission of the annual report and the tax report. The list of service providers is out in government page https://e-resident.gov.ee/marketplace/service-providers/. More information about us can be found here: https://www.silvahunt.ee

Professional tax advice

The main objective of holding companies is to improve tax efficiency. That is why it is important to get professional tax advice in order to find better and more cost-effective solutions for managing your capital, dividend flows and therefore reducing tax risks. Our aim is to help holding companies take full advantage of the tax system without adding extra costs or bureaucracy. If you find holding structure interesting and useful contact us right now.

In conclusion

This article was written by Silva Hunt Tax Expert Meelis Krautmann.
Meelis is a tax expert with 18 years of experience. He has led the legal department of Estonia’s tax and customs board and worked as a tax attorney. 
Silva Hunt is a e-Residency service provider who offers a safe haven to active companies while being experienced in structuring holding companies.
If you are ready to open a Holding Company in Estonia or have questions about Holding Companies, write to Silva Hunt team info@silvahunt.ee and we will get back to you.

The last week was big for Silva Hunt. We managed to get the approval for our license (No. FIU000284). It was given to us by Ministry of Economic Affairs and Communications (where you can check it right away and at all time). It allows us to offer services to trust funds and companies, which in essence means that we can start offering our services as e-residents’ company service provider to you!

This ’’little project’’ of ours has been going on since September. We are still a young wolf pack, who is getting to know each other, also growing stronger day by day. When Kaspar, one of the founding members, was asked what is his biggest take away and thought, he answered:

’’I think we have a strong team with a variance of personalities and strengths. I believe each one of the members has their own peculiarity which enforces the team and brings us to a whole new level. We are definitely here to make things happen for our clients and help Estonia to get a wider recognition throughout the world.’’