Comment by codethief

> Namely: Salary is taxed lower than dividends.

That very much depends on your tax bracket but at high income levels salaries are usually taxed quite a bit higher (42% vs. ~27%). 42% being the highest tax bracket of course; the first ~69k€ of your salary are taxed at a lower rate.

> If they determine that you paid out dividends as a salary, then you'll be charged with tax fraud.

This might be the case if the company were in Germany, and then it might not even be the taxman that'd complain but social security since you don't pay social security fees on capital gains. However, I doubt German authorities can do much about an Estonian entity paying dividends.

> You can't just keep adjusting your salary up and down every month with a corporation.

Yes, you can. Many companies do that – it's called fixed vs. variable salary (bonuses).

> The problem is that you can only pay dividends the year after you earn the money.

You're right in general (and I assume also in the case of an Estonian entity). Though at least in Germany – surprisingly – this is not correct, look up "Gewinnvorabausschüttung".

Either way, this is not a huge obstacle if you're pursuing this long-term: You only have to make it through the first year without any income. Afterwards you can live off of last year's dividends.