[AhtiK]

Important to note that this 20% corporate tax is applied to the taxable payment (e.g. dividend payouts).

There are no taxes to pay for the yearly profit, which makes it much easier for companies that do plan to reinvest the income over the years or just hold it.

Also, one should probably have employees or customers physically in Estonia, otherwise the company tax residency might change into other jurisdictions.. IANAL.

I'm curious if there are any other EU countries with a similar flexibility (corporate income tax not applied until the "payout event")?

[gzer0]

> Also, one should probably have employees or customers physically in Estonia, otherwise the company tax residency might change into other jurisdictions.. IANAL.

You no longer need physical presence with their e-Residency program.

[1] https://e-resident.gov.ee

[atlasunshrugged]

You no longer need physical presence to register your company and do business through the programme but you should still be very careful about taxation, tax residency whether personal or corporate gets very complex very fast and I highly recommend talking to a tax expert

[pmjordan]

Yes, the country/countries where your physical office(s) is/are located (or rather, where people - founders or employees - are doing the work that is the basis of the revenue on which you're generating a profit) will likely want a piece of the pie.

Certainly, a decade or so ago, it was popular to register a limited company in the UK whose physical presence was on the continent. Invariably, this meant dealing with both tax authorities.

It seems to have lost its attractiveness after laws for GmbH and similar were relaxed in various countries. Brexit has pretty much killed any remaining demand, at least for real companies. (As opposed to shell companies for tax evasion or money laundering purposes, for which the UK remains as popular as ever - and which are a major reason for big money backing Brexit, as the EU has been looking to crack down on the practice.)

[lauriswtf]

Latvia has a similar corporate income tax model which is also good for reinvesting. Essentially 0% corporate income tax until you want to pay out.

[einpoklum]

Ah, so it's one of these tax-haven states which accelerates the global "race to the bottom" regarding corporations' tax rate? That's not a good thing IMHO.

[dullgiulio]

It's clearly stated that the tax level is 20%, not a tax-haven at all. Estonia in general is very far from the ultra-liberal country it has been depicted in the past (especially by the US Republicans): it has average EU taxation, minimum wage, taxpayer-funded public healthcare, ...