The journey to start a small online company and why I joined the e-residency program

Tallinn Estonia e-residency Entrepreneur
Tallinn — Jonathan Verhaeghe
  1. Why should I start my company in Estonia? Is this right for me?
  2. How to actually start up my company in Estonia?
  3. How safe is all of this?
  • The location-dependent part and being part of a digital nation.
  • Simplicity
  • You are a digital entrepreneur: Blogger, App developer, you sell online services/products, etc.
  • You are a solopreneur, freelancer, offer consulting services, etc., and can do it from anywhere on the planet.
  • You are looking at growing your company in a tax-efficient manner: One of the greatest competitive advantages as well of launching your company in Estonia is that as long as you do not distribute profits as dividends or income, the corporate tax is 0%. This means that in the startup phase you can focus on growth and reinvest all profits in the company.
  • You currently reside outside of the EU, are struggling to start your business in your home country, and/or you are looking at expanding to the EU market benefiting from an EU-based legal system to do business. Xolo told me the story of some Brazilian e-residents that took the trip to Estonia just to visit the Estonian bank and flew back after a couple of hours. They claimed to have saved both time and money by creating their online company thanks to the e-residency program!
  • You want to sell physical products, this is mainly due to VAT issues which are difficult to handle. It is not impossible but it will be a lot of hassle, Xolo currently does not support this type of business for instance.
  • Your company needs permanent premises in another country (a factory, a restaurant, a barbershop, a laundromat,…). The company will then be deemed taxable in its country of residence.
  • You want Estonian residency and travel VISA-free in the EU. The e-residency offers access to digital services (online taxes, digital signatures,… ) but the e-residency card is in no way a travel document, nor does it confer Estonian citizenship.
  • You are looking at avoiding taxes in your country of residence. E-residency does not confer tax residency similar to the point above.
  1. First things first, apply for e-Residency here. No surprises, fill out the form, pay the 100 EUR subscription, and provide the necessary details. You will then get an e-mail confirmation that your application has been submitted and that the Estonian Police and Board Guard will keep you informed further. I did it on the 19th of January.
  2. Pick up your card. My application was approved on the 2nd of March and it was sent to the Estonian embassy in Oslo on the 13th of March, I went to pick it up on the 19th of March. Depending on where you apply from and if there is an Estonian embassy nearby or not you might need to travel to pick up your card. So, all in all, it took 2 months from the application until the receipt of the card. If you made it here as well, Congratulations! You achieved the biggest step! Now you can start setting up your remote Estonian-based company.
  3. Register your company. There are a few players out there that can help you here. Since I did not want to make it complicated for myself and overthink it I went with Xolo (or LeapIN at the time) which seemed reliable and enjoys very positive feedback. To be honest I did not find any negatives during my search online. Once you register the onboarding will be very straightforward, the interface user-friendly, once again hassle-free just the way I like it! You pay the registration fees for the company (190 EUR state fee for registering, 25 EUR state service fee for the online registration of your company in the Estonian Business Registry, and your first month as a LeapIN user 49 EUR), you fill out info about the purpose of your company, you choose your future million-dollar company name, it gets reviewed and after a few days there you go, you are in bizniss, my friend! This process took me 1 week and I was helped all along by their onboarding staff.
  4. Now that your business is ready, you need to choose your business banking system. You can choose Holvi, Transferwise, or the Estonian bank LHV (Xolo’s banking partner). With Holvi and Transferwise you can apply and manage everything without setting foot in Estonia, with LHV you will need to come physically to Estonia for a face-to-face meeting with a bank representative. I went for the latter as I would like to distribute dividends which is not possible with the other banking solutions. Depending on how things go, I might simply reinvest part of the profits. Last but not least, as an EU bank your account is backed up to 100 000 EUR. This is not the case with Holvi or Transferwise. You can also start with Holvi and then switch to LHV if you plan to travel to Europe later on but cannot wait to get started with your new venture! Here is a short comparative table Xolo compiled.
Banking solutions Estonia Fintech
Source: The Ultimate Guide to e-Residency and Borderless Business Banking — Your Options
Bank Estonia LHV
LHV — Jonathan Verhaeghe (picture taken with authorization)
Office LeapIN Xolo Estonia Tallinn
The LeapIN offices — Jonathan Verhaeghe
  • The start-up was founded 3 years ago and is growing rapidly, it counts about 50 employees (!) and is spread over two sites: Tallinn and Tartu (this is where most of the accounting is).
  • Regarding the customer base, it is about 1400 but as of today it lies around 1500 (Source: Xolo) and it is still growing every month. (I also complimented them on their marketing as they are everywhere)
  • Their focus is principally focused on digital businesses and the majority of their customers are single company owners. Their customer base is literally global, they have customers from Brazil, Ukraine, Thailand, Germany,…
  • From their customers’ survey, it seems that their customers are extremely satisfied.
  • The most visible changes we should see as customers in the near future are an improved user interface, an even faster processing of information (improved automation) and there are also plans for integrating an own business-banking system (whether that means to have a face-2-face meeting, this is not known yet).
  • Although there is a high demand for it, there are currently no plans to support companies selling physical products.
  • Xolo is currently doing well and they have grown quickly, never the less I asked about the unlikely situation where Xolo would go bankrupt, what happens to my business then? Xolo is “just” a service provider so there is as such, not much to worry about: The business and the bank account will remain registered in your name, you will simply need to find a new Estonia-based service provider/accountant.
  • The average accountancy costs for a starting business in Estonia usually revolve around 50 EUR/month plus 50 EUR for the yearly tax report. I double-checked with my friends at Mashmachines and they confirmed this is what they were paying in their “early days”. The Xolo starter plan is 49 EUR/month and will become 79 EUR/month once you have reached a turnover of 1000 EUR (in addition they have created the Xolo Go offer, check it out here). For the level of service they provide, the time you gain to focus on what you are passionate about, and the headaches you avoid, the price is definitely fair. And frankly, if you are like me “value-negative” on administration, a service like Xolo is absolutely worth it!
  • LeapIN has been raising funds to expand and improve its services.
  • They have rebranded to match their customers’ profile better.
  • Last but not least, they have launched Xolo Go: a unique service that gives freelancers all the services of running a company without owning one. Freelancers can use Xolo as their legal entity.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Jonathan Verhaeghe

Jonathan Verhaeghe


Blogger, passionate about all things Personal Finance and💰, part-time entrepreneur and cryptocurrency enthusiast! Visit to learn more!