I agree this is interesting, but the problem is that there is nothing to stop the government of the country in which you physically reside from having different ideas about what laws govern your dealings.

If the country you are physically in wants to (e.g.) tax you, they can. (There are, of course, many more nefarious possibilities than taxation.) This is, I think, true in an "in accordance with international law" sense (though there is the possibility that a bilateral double taxation treaty might apply) and it is certainly true in a "who's to stop them" sense. (And if we're hypothesizing that the person is physically located in a corrupt/war torn country, the latter would probably be all that matters anyway.)

Can they though? If all of the money is kept in Estonia for example, and none actually goes through your identity or a business elsewhere - then that company wouldn't have any right to it from my understanding. Until you pay someone in another country - then the other one can't dip their hand in it. Isn't this why so many companies are based out of random countries to begin with?

It's hard to spend money that is hidden from local tax offices. Local authorities can even blame you if your lifestyle is higher than your declared income.

It is to use Estonia's digital services and does not give you residency.

Nothing stops you opening a company in Estonia now, but that does not mean you would only pay corporation taxes there (they are at 10% when distributed as dividends), your physical location plays a role too.

Dividends are taxed this year at 21%. And if I'm not mistaken tax rate is lowered to 20% next year, reinvested profit is not taxed.

You are right, don't know where I got that 10% from.

Bulgaria has a corporate tax at 10%. The e-government isn't nearly as developed though. There was some talk about using the Estonian experience to help in building ours but that is still just an idea.

Yeah I am really hoping that Bulgaria and/or Estonia will be added to a list of countries being incorporated by http://startupr.com/ to make the process easier.

Can you work for your own Estonian company, given that you're non-resident? (You can start your own US company, even remotely, but you can't work for it, unless you have Working Visa)

Maybe you mean you can start a US company but not work for it when you are in US on a non-working visa?

Can't see why a US or Estonian company (whether or not you are a director is irrelevant) can't hire you to do some work. Unless you don't have work visa in the country of your stay.

"Money laundering has never been so easy! Thanks E-stonia!"

From the website: To apply for one, you need to make visit a Police and Border Guard office in Estonia – there you need to submit an application and provide biometrical data (your facial image and fingerprints) for background check.

I don't think it works for money laundering in any way.

So money laundering is the only reason for using cryptocurrencies? And who says cryptocurrencies can’t be regulated?

Shell companies are one of the greatest instruments for graft ever devised. I'm not a fan of them, and they get easier to make with every passing year. I don't have an opinion on cryptocurrencies. I'm sorry if it seemed that way.

Yes, there is a hazard in this. But probably also lots of utility for benign causes. So I hope they will outweigh the malicious ones.

I'm curious how you launder money in bitcoin. If you know that some btc was used for a "criminal" exchange, then you can track all the Satoshis through all their recipients. You can just blacklist the money in your country and any retailer using your blacklists would not accept it.

One example how it can be done: https://news.ycombinator.com/item?id=8130592

I mean in a bitcoin economy. The only reason that example works is because the input fiat does not have the transparency of a blockchain behind it. If you were end to end using bitcoin, ie, drug dealer gets paid in bitcoin, then if you know its drug money you can blacklist it forever because its always traceable.

There are ways around that: https://en.bitcoin.it/wiki/Mixing_service