If you are in a cryptocurrency business or any digital startup for that matter, you would know that countries and governments around the world are not very supportive for digital businesses whether it is related to cryptocurrency & blockchain or just any tech related business.
One of the biggest reason behind this is lack of policy infrastructure that supports digital businesses and hold cyber-criminals accountable.
The governments continue to use the outdated laws and try to modify them to fit digital businesses; however, that is just not working out.
Another major reason behind this is lack of banking infrastructure in developing countries.Any digital business, whether it is crypto related or general needs a digital banking infrastructure which many countries are still lagging in.
This is where Estonia, a small country on the eastern coast of the Baltic Sea in Northern Europe, comes in the picture. Only in the recent few years, Estonia has emerged as the fastest growing digital economy and students, engineers, entrepreneurs and investors from all around the world are flocking to Estonia to build the next big digital startup.
Here are five reasons why Estonia is the paradise for crypto related and other digital startups and why you should consider launching your startup in Estonia;
The first and foremost reason why you should look into launching your digital business in Estonia refers to the policy and legal framework. What Estonia did was looked around the world and noticed what was one of the biggest hurdle to starting a digital business and found the absence of legal framework to be the answer of their question.
So that is what Estonia did, it built a comprehensive legal framework to support digital businesses. Estonia made it easy for startups to obtain a cryptocurrency exchange license by filling an application to the Register of Economic Activities.
Estonia also put in place Money Laundering and Terrorist Financing Prevention Act to stop the digital currencies for being used for ulterior motives.
Instead of banning things like exchange of cryptocurrency etc. or sending large amount of money to or from Estonia and other countries, Estonia put in place high quality regulators that stop the misuse of these policies but at the same time facilitate the businesses using these facilities for legit reasons.
Estonian regulators (Financial Supervision Authority and Financial Intelligence Unit) are extremely easy to communicate with and are always willing to help as long as you are running a legit business.
Estonia has found the perfect solution to overcoming the problem of residency and immigration, while it does not force people trying to open a business in Estonia to actually move there, it does provide them with an e-residency.
This residency is like any other country’s residency except it is electronic and the person having an e-residency does not have to be present in Estonia. The process is fairly simple and anyone looking to open a startup or business can in no time avail this opportunity.
Being an e-resident of Estonia gives you access to all the electronic services offered within the country. It allows you to open a company and manage it remotely achieving location independence. The e-residency program is meant to save the entrepreneurs looking to launch a startup in Estonia from tax authorities, bureaucracy and corruption.
Tax policies are another major reason why digital businesses around the world are having a hard time surviving this worsened economy. Governments have no regard for these businesses and do not provide any subsidies or tax-breaks to such startups; instead, they only make it difficult for digital businesses to thrive.
Estonia has especially taken steps to ensure that it creates the most competitive tax environment of all of OECD. Firstly, the tax percentage is not as high as it might be in other countries, secondly options like reinvesting can completely free you of any tax obligations that you might have. Estonia has exempted cryptocurrencies like Bitcoin and altcoins from VAT.
The Estonian income tax act also facilitates startups offering ICOs as in it does not establish any peculiarities about ICO as it does with regular investment rounds.
Finally, if you have ever launched a business of your own whether in your own country or some other country, you are well aware of the costs that are associated with starting a business. Whether it is registering your company with trade bodies or getting your necessary license, the fees are usually in thousands of dollars.
In the case of Estonia, they have made it extremely easy to open a business. All you need is 2500 Euros of charter capital and 5500 Euros to register an LLC company along with obtaining cryptocurrency licenses in Estonia.
These costs are exceptionally low especially when compared to common destinations for opening businesses like Singapore, Switzerland or the UK where opening an LLC can sometimes cost up to hundreds of thousands of dollars.
Therefore, if you are a startup fed up of obsolete laws, which do not allow you to deal with cryptocurrencies or impose thousands of dollars in the form of taxes, Estonia is the destination for you.
So plan well ahead, take into account all legal and compliance obligations and apply for an e-residency in Estonia. Once you go through the fair and square process of obtaining your e-residency, everything else becomes extremely simple and Estonian professionals are always ready to help you navigate through the process of launching your startup in Estonia.