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Osaühing (OÜ)

Osaühing (OÜ)

# Private limited company through the Estonian e-Residency program

An overview of the Estonian Ltd business structure available online through the e-Residency program with some comparisons to the Croatian Ltd form. The presentation was given at the Zagreb Freelancers meetup on the topics Battle of Business Structures – "Što nakon paušalnog?".

You can find a numerical comparison on Google Sheets – http://bit.ly/bitkaoblika

Dražen Lučanin

March 14, 2019

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  1. Why incorporate there? • Everything online • Fast & gets

    out of your way • Better tax system for some circumstances
  2. Croatian bureaucracy • A lot of progress with the e-Citizen

    project • good direction • some things are much easier now • but… • warning – some raging ahead!
  3. Croatian bureaucracy • Stamp!?! • e-Citizen on Windows only?! •

    27% developers use MacOS (Stack Overflow survey) • 100 little bank transactions for every little thing (pension 1, pension 2, health insurance, tax, forests, water, monuments…) • No integration with the banks • You need to have an employee • Expensive & long company liquidation • You need to have a physical office • …
  4. Move to the cloud… • everything done through an e-Residency

    provider • https://e-resident.gov.ee/marketplace/service-providers/ • I use LeapIN • fill out some form, pay, get your e-Residency card in the embassy • ~1 month • incorporate online • ~1 week – start to IBAN in €, VAT ID and invoicing
  5. Business taxes • 0% corporate tax • 0% tax to

    Estonia when you’re paying yourself a salary • (assuming, of course, that you don’t live in Estonia) • 20% corporate income tax to Estonia on the amount you pay out as a dividend to yourself
  6. Personal taxes • You don’t have to be employed •

    If you are employed • Same taxes & social insurance • as if you are a d.o.o. employee • Some people also open a “paušalni” in Croatia • bit of a grey zone by Estonian rules
  7. Benefits • All the usual Ltd stuff (limited liability, business

    expenses, dividends) • Good online system • works on MacOS • SmartID mobile app – you don't need the card reader for daily use • drag'n'drop accounting • Accounting • drag'n'drop or email invoices / bills • Banking • payments automatically imported as expenses • generate tax payment drafts – you follow a link and approve • LHV best integrated • perfect for reinvesting in your personal projects in the future (SaaS spin-off)
  8. Drawbacks • limited expenses • trips only across border •

    luxury tax on food / drinks • no car / apartment • employees • d.o.o. much better if you want a classical company with an office, employees & take all of your money out as dividends
  9. Conclusion • Good online-first system • Not a tax haven

    • Perfect for reinvesting in yourself • d.o.o. better for employees, maxing out immediate payout • Ask me for a sign-in bonus • Questions?
  10. Open letter – Obrt 2.0 • gradual transition between paušalni

    & d.o.o. • sole proprietorship slightly better than Ltd in Austria • 1 extra HRK in revenue must never reduce your profit! • switch flexibly between paušalni & normal obrt • remove the 3 year duration