Tax advantages are not the biggest reason for running a business through Estonia. But it’s still quite a good one!
The tax system is as easy as it can be: One general tax rate which basically applies for everything with very rare exemptions: 20 percent on income, dividends and as value added tax (VAT). The attractive part: Companies’ profits are only subject to taxation when they are being distributed as dividends. Before that they remain untaxed inside the company.
For entrepreneurs with a long-term perspective this different paradigm makes a massive difference: When you’re growing wealth inside your company for your later retirement the capital gains stay untouched. The effect on the interest on interest rises year by year.
Compared to annually taxed companies like German GmbHs on a period of 30 years you might end up with the double amount. We’re happy to discuss our in-depth comparison spreadsheets with you!