The e-Residency program is specially designed for digital nomads. Why? First, because of Estonia’s commitment to build a digital nation that allows its citizens to achieve geographic independence, running their business completely online, and secondly, to prevent problems with other countries with CFC rules – especially in Europe – where a company is still linked to concepts such as geographic location.

What happens if you are a tax resident in a country with CFC rules, i.e: you reside there permanently and you have no intention of changing that situation? Being the only member of your company, it’s considered that the company is performing its activity 100% of the time in that country. Hence, the Tax Office will eventually consider that your company has a “permanent establishment” in that country and therefore it has to pay taxes there.

This happens regardless of where your customers live, or where your company does business. The important triggers for this permanent establishment is having premises in that country (such as offices) or if the majority of the board members of the company live there.

Does this affect you and your country of residence? You need to look for the double-taxation treaty between your country and Estonia, and check for your CFC rules. If in doubt, you should consult a professional lawyer or accountant from that country.

in Requisites and conditions

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