Comment by olieidel

Haha, thanks for linking to my website! Happy to answer any questions.

Skimmed this thread and I'm quite surprised how few people are aware of the permanent establishment problem.

Quick primer on the permanent establishment problem: You would technically have to pay taxes for your company in the place you're living (not Estonia). For example, if you're living in Germany, your Estonian OÜ would technically have to file for German taxes, too, because it's being run from Germany and it now has a permanent establishment in Germany.

So, roughly speaking, the Estonian OÜ is only useful if:

- You are in a country which doesn't have a permanent establishment problem and maybe even offers tax benefits for foreign companies (e.g. the non-dom rules of Malta, Cyprus, etc.)

- You are in a country which doesn't have a permanent establishment problem because they don't crack down on foreign company ownership (e.g. most developing countries)

In all other countries, the Estonian OÜ is likely going to cause you many tax headaches in the long run. In practice, this means:

a) Your local tax authorities don't notice or don't understand, and you're still fine, even though you'd need to file for taxes;

b) Your local tax authorities crack down on you and you need to go looking for a very expensive international tax advisor versed in Estonian and your local tax law.