Can I run an online business from Estonia?

Effective tax about 22% with the cheapest legal set-up, which costs about USD 1,500 a year: OÜ: 0% while profit stays in; 22/78 when paid out (the planned 24% was reversed in Dec 2025: rates move).

What is the catch in Estonia?

Tax is deferred, not avoided: every euro taken out (dividend, liquidation, moving the company) pays 22/78. Place of effective management decides where the company is taxed: run from Belgium, Belgium taxes it.

Moving to Estonia: tax, residence and real costs (2026)

Estonia: worldwide: 22% on income · companies: 0% on retained profit, 22% on distribution. The cheapest route to residence is e-Residency gives a company, not residence; living there: EU registration or digital-nomad visa: about USD 400 in fees doing it yourself, with no investment, with about USD 4,500 a month of income shown, in about 2 months. Living costs about USD 1,600 a month for one person in Tallinn, USD 1,050 in Viljandi, and around USD 1,000 on a bare-minimum budget.

Key facts

Tax in one line	worldwide: 22% on income · companies: 0% on retained profit, 22% on distribution
Foreign income	worldwide
Gains · dividends	22% · 22% at company level on distribution
Wealth · inheritance tax	none · none
Cheapest residence	e-Residency gives a company, not residence; living there: EU registration or digital-nomad visa
Money needed	About USD 400 in fees doing it yourself, with no investment
Time	about 2 months
Doable yourself?	Yes, with a checklist
Days you must spend there	-
Citizenship	8 years
Online business	22% effective, about USD 1,500 a year to run: OÜ: 0% while profit stays in; 22/78 when paid out (the planned 24% was reversed in Dec 2025: rates move)
Living (one person a month)	Tallinn ~USD 1,600; bare minimum ~USD 1,000; family of four ~USD 3,450
Good for	e-Residency: a fully online EU company; tax only when profit is paid out; best for reinvesting founders
Common set-up	an OÜ via e-Residency, run from wherever the founder lives (watch the place of management)

Pros and cons

Pros	Cons
Online company in an evening No tax until profit is paid out	A company managed from your home country is resident there Banks for e-residents are fintechs Taking money out costs 22/78 (~28% of what you receive): the tax is only deferred, not avoided Rates move: 20/80 until 2024, 22/78 since; a rise to 24% was voted in 2025 and reversed in Dec 2025; the 14/86 rate for regular dividends was abolished Closing the company or moving it abroad counts as a distribution: liquidation and exit are taxed

Pros

Cons

Online company in an evening
No tax until profit is paid out

A company managed from your home country is resident there
Banks for e-residents are fintechs
Taking money out costs 22/78 (~28% of what you receive): the tax is only deferred, not avoided
Rates move: 20/80 until 2024, 22/78 since; a rise to 24% was voted in 2025 and reversed in Dec 2025; the 14/86 rate for regular dividends was abolished
Closing the company or moving it abroad counts as a distribution: liquidation and exit are taxed

Questions

How much does residence in Estonia cost?: E-Residency gives a company, not residence; living there: EU registration or digital-nomad visa: about USD 400 in fees doing it yourself, with no investment, about 2 months.
Does Estonia tax foreign income?: Worldwide. In one line: worldwide: 22% on income · companies: 0% on retained profit, 22% on distribution.
What does it cost to live in Estonia?: Living costs about USD 1,600 a month for one person in Tallinn, USD 1,050 in Viljandi, and around USD 1,000 on a bare-minimum budget (based on livingcost.org, 2026).
Can I run an online business from Estonia?: Effective tax about 22% with the cheapest legal set-up, which costs about USD 1,500 a year: OÜ: 0% while profit stays in; 22/78 when paid out (the planned 24% was reversed in Dec 2025: rates move).
What is the catch in Estonia?: Tax is deferred, not avoided: every euro taken out (dividend, liquidation, moving the company) pays 22/78. Place of effective management decides where the company is taxed: run from Belgium, Belgium taxes it.

Compare

Monaco: 0% on foreign income · 0% on local income (French citizens excepted)
Andorra: 10% on foreign income (credit for tax paid abroad) · 10% on local income · 10% top
Switzerland (lump-sum taxation): lump-sum: a yearly fixed tax on living costs instead of tax on income (foreign income and gains included)
Italy (flat tax for new residents): EUR 300k a year flat on all foreign income and gains, whatever the amount · 43% on Italian income
Greece (non-dom): EUR 100k a year flat on all foreign income (+EUR 20k per family member) · up to 44% on Greek income
Cyprus (non-dom): 0% on dividends and interest (non-dom, 17 years) · 20-35% on work income · 0% on securities gains
Malta: foreign income: 0% unless brought to Malta (min. tax EUR 5k) · 35% top on Maltese income
Portugal (IFICI): 0% on most foreign income (IFICI, 10 years) · 20% flat on qualifying Portuguese work income · 48% otherwise

Compare all 53 places with your own income and budget →

Sources

https://www.emta.ee
https://www.e-resident.gov.ee
Living costs: based on livingcost.org (livingcost.org, June 2026), rounded