Re:Ask HN: Anyone doing business using Estonian e-residency?
by taxguy on Sunday December 30, 2018 @11:59PM
(#18793102)
Corporate taxation is generally based on where the management and control of the business is, not where it is incorporated, although the incorporation jurisdiction is considered. If you had incorporated the Estonian company by yourself without a partner and had been running it from Canada, the Estonian company will be considered a Canadian company for tax purposes and required for file a T2 corporate income tax return.
If you are still a Canadian resident, do remember to file T1134. If you own 50/50 in the business, you can perhaps argue that this is a foreign affiliate only, and not a controlled foreign affiliate.
I am a Canadian resident, my co-founder is an Estonian resident (physical). Both of these may change in the future and the intended market for our startup is global. Estonia was chosen as a common ground with a minimal overhead - it's easy and costs almost nothing.
Using government services with an ID-card was a breeze. For banking we use a "physical" Estonian bank, once set up I have no problem accessing it online either.
We didn't have any revenue the previous year, so cannot say much about taxation story here. It gets more or less complicated depending on your country of residence, but I don't think that having a business entity in Estonia is fundamentally different from other EU countries here.
Slightly more personal and readable story, written by me: https://medium.com/e-residency-blog/how-to-launch-an-estonia...