Why Startup Founders Should Expand in Estonia

For founders and entrepreneurs ineligible for a US startup visa, such as the O-1, venturing to Europe could be the next best option.

Estonia is quickly emerging as a hub for startups and innovation due to its advanced digital infrastructure, access to funding, highly educated talent pool, and collaborative startup community.

To top things off, the Estonian government is now offering a range of new, fast and convenient ways for entrepreneurs to explore and establish business in the country and the rest of Europe.

This article explains why Estonia is an attractive destination to do business and the steps you can take to establish your business there.

Why is Estonia an attractive destination for startups?

Estonia extends several significant benefits to startups, including the following:

• Access to the EU market: Registering a company in Estonia provides access to the European single market, making it attractive for non-EU residents who wish to operate within the EU
• Investment opportunities: Known for its high per capita VC investments, Estonia boasts a robust early-stage investment landscape, making it an attractive country for startup funding. All funding options available to foreign founders can be found here
• Flexible financing options: The country’s digital infrastructure and forward-thinking legislation make business transactions, such as offering employee share options or integrating outside capital, seamless and straightforward
• Easy banking: For businesses establishing a base in Estonia, e-Residency will enable founders to open and manage Estonian bank accounts online following a one-time visit. Alternatively, many businesses opt for fintech solutions that offer equivalent financial services and can be set up entirely onlinE
• Tax efficiency: Estonia has a unique corporate tax structure where taxes are only paid on distributed profits. This can be highly advantageous for startups, as reinvested profits are not taxed, allowing businesses to grow their capital base more effectively
• Settling in support: Estonia’s International House is a central facility designed specifically to aid foreign employees and their families who are relocating to Estonia. The initiative aims to ensure a smooth transition and successful integration into the country by offering a wide range of services and resources, including cultural integration programs, career services, educational support for children, and healthcare and housing assistance

See also: Doing Business in Europe: A Comprehensive Guide

How can I start doing business in Estonia and the European market?

There are few ways to explore the country's business and market potential, establish your business, and possibly even make Estonia your new home. Here are the steps you can take:

Step 1: Test Estonia with the digital nomad visa

Estonia has much to offer budding startups, but how do you know if the local market and entrepreneurial environment suit you? Talent can explore Estonia with the Digital nomad visa to see if they like the startup community and business environment.

“Freelancing and digital nomads are currently among the most prominent global megatrends [...] Also, [Estonia is] the first national program in the world to empower remote entrepreneurs and teleworkers, offering 100% digital solutions to meet their needs.” - Lauri Haav, Managing Director of Estonia’s e-Residency

See also: Moving to Estonia: A Guide for Expats and Digital Nomads

Step 2: Register your business in Estonia through the E-Residency

Once you’ve figured out whether Estonia and the rest of Europe are a good market fit, you can obtain a digital identity via Estonia’s new E-Residency program.

With this digital ID you can fast-track your business registration in the country in just 15 minutes and gain immediate access to the European marketplace. You don’t need to be physically present in the country, and can run your business remotely.

See also: How to Register a Private Limited Company in Estonia.

“It is clear that location-independent entrepreneurship and international talent mobility are here to stay…we are extremely excited that Estonian e-residents can now benefit from Deel’s wide-ranging service portfolio.” - Lauri Haav, Managing Director of Estonia’s e-Residency

Step 3: Advance your businesses with the startup visa

Should you decide you’d like to have freedom of movement within Estonia and Europe to advance your business you can apply for Estonia’s startup visa.

With its startup and scale-up visa programs, Estonia simplifies the process for non-EU founders and their international teams to move and work in the country effortlessly.

Step 4: Get a residency permit for yourself and your key hires

If you're unsuccessful in your startup visa application or you come to the end of the program and want to remain in Estonia, you can apply for a residency permit.

Step 5: Grow your Estonia-based business with Deel

Although Estonia boasts a vibrant and supportive business ecosystem, navigating international hiring, payroll, HR, and compliance processes can present significant obstacles, especially for smaller startups.

Deel’s all-in-one people platform offers an all-encompassing global hiring and team management solution so you can compliantly hire, pay, and manage your global workforce, whether in Estonia or internationally.

Explore our immigration services or book 30 minutes with a product expert to see how Deel can support your global expansion.