This doesn't save any taxes, and isn't a strategy to do so. The costs themselves are't that great: a few hundred Euro.
The reasons we did were the following:
- Ease of doing business with clients and vendors in other EU countries: we have an EU bank account in Euros, can generate all the right VAT paperwork etc. Not huge, but for some businesses critical. We also have a US subsidiary in Delaware and a couple of state registrations because that is how you employ people in the US. Ditto for a third country where one of the founders is moving.
- VCs are increasingly comfortable with overseas-registered countries, at least ones not in tax havens. Ten years ago this would have been seen as weird. I've always previously incorporated in Delaware where I've never set foot so this isn't a big deal.
- Our lawyer (!!!) in SV suggested we officially HQ the company overseas (I already had an e-residency so we used Estonia). He said as the founding team was all foreigners (though some in the Valley for decades), it was a good hedge against unforeseen changes in the federal government's attitude towards foreigners. TTTT I would have considered it wide-eyed raving except this lawyer has been working at a big law firm in the valley, for 30 years. But what the hell, it's so easy to do these days why not.
Not everything you need is in English but tbh I don't interact with Estonia any more than I interact with Delaware and this has never been a problem.
The e-residency card comes with a chip reader that plugs into your computer and does a handshake with the bank. There are a bunch of companies who authenticate via the e-e-residency card: https://e-resident.gov.ee/run-a-company/
We are in development so don't have any customers yet, so I can't tell you how taxes etc will be but I can tell you the process of dealing with the .ee government so far is paradise compared to the US process.