Comment by romanovcode

This should be higher up. Xolo deliberately hides this under small-print with vague statement about this issue.

If you manage your company in, let's say, Germany, it is de-facto German company in the eyes of German tax authorities. When German tax authorities will find this out they will make you open UG/GmbH and pay back the corpo-tax, plus possibly a fine.

Now you will be stuck with 2 companies - Estonian and German, which is way bigger hassle. Not to mention Estonian company becomes useless/liability.

I also want to mention that practically every country has offshore-company laws like this, even places like Thailand and other SEA countries. It's not only EU.