A company need not conduct its day-to-day operations from Estonia, but still use it as a gateway to Europe. Estonia also has a double tax avoidance treaty with India, so the company has to pay tax only in India
North European country Estonia is wooing the next generation technology companies through a programme that enables entrepreneurs to open a company out of Estonia, but operate out of home country and have access to entire European Union market.
Here the company need not conduct its day-to-day operations from Estonia, but still use it as a gateway to Europe. It also has a double tax avoidance treaty with India, so the company has to pay tax only in India.
In order to access the EU market, a company has to be present in any of the EU countries, but on the flip-side the cost of operations can rise compared to the home country. Through the e-Residency programme, a company has to just get registered in Estonia, get all the benefits other Estonian companies get, continue to operate out of the home country and still access the European market on the model of 'Make in India and Sell in Europe'.
The programme gives the company almost all services accessible to a normal citizen or a company of Estonia, but can't cast his vote in elections.
Riho Kruuv, Ambassador of Estonia to India, told media persons in the city on Wednesday that since the programme came into existence three years ago, close to 33,000 e-residents from about 154 countries have set up about 5,000 companies in Estonia. These also include close to 1,600 Indians, who have set up over 150 companies. "We see huge potential in Gujarat and the state is one of our key focus markets for this year. We are keen to work closely with the entrepreneurs from the state and help create a sustainable startup ecosystem in the state,"said Kruuv.
Estonia has a Double Tax Avoidance Treaty with India and there is no Corporate Income Tax, but has 20 per cent tax on dividend shipped out of Estonia.
It is wooing startups to work in its incubators and accelerators. Its main focus is on sectors like Information Technology, especially the emerging segments like blockchain and cryptocurrencies. Kruuv claimed that video calling service Skype has been developed out of Estonia and it plans to have a number of unicorns in the next few years.
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A company need not conduct its day-to-day operations from Estonia, but still use it as a gateway to Europe. Estonia also has a double tax avoidance treaty with India, so the company has to pay tax only in India.
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