Estonia is a Baltic state in the European Union. It comes with an advantageous passport and a lenient tax system, making it a comfortable business environment for investors. Estonia was the first country to offer e-residency to businesses. An easy status that provides access to Estonia’s transparent digital business environment. The Estonia E-residency simply provides the ability to register a company in Estonia but does not come with a resident permit.
For foreign investors looking to relocate onto its shores, Estonia offers a diverse investor visa program. The government provides 3 categories for investors to choose from.
- Startup Visa Program
- Immigrant Entrepreneur Program
- Major Investor Program
Estonia Startup Visa Program
This the most affordable of the three categories.
For a foreigner to establish a startup in Estonia (and use it as grounds for residence), the company must be reviewed by an expert committee.
However, there are exemptions to the evaluation process, which include:
- The company has already undergone an evaluation by the committee(throughout the past 5 years). Regardless, the Police and Guard Board may require another evaluation throughout the application process.
- The company falls under the conditions of the Aliens Act, and as pointed out by the Interior Ministry’s directive. A list of the Act’s conditions can be explored on the government website (link).
Estonia Immigrant Entrepreneur Program
This program follows lenient procedures on how funds are calculated.
For the most part, holdings in companies and sole proprietorships investments should be 65,000 EUR minimum. Self-employed individuals require less at 16,000 EUR.
The enterprise’s equity capital, registered fixed assets, and subordinated liabilities can count towards the investment quota.
Residency permits are normally 1 year long. Upon renewal, investment requirements are further loosened, where sales income can account for the investment quota (minimum 200,000 EUR per year).
Social security tax paid to Estonia can also count. However, the value of the tax should be five times the average annual Estonian wage.
Estonia Major Investment Program
Investors can apply to this program by making direct investments that exceed 1 million EUR.
Investments should be made to companies entered in Estonia’s commercial register. Also, the selected company should mainly invest into Estonia’s economy.
Deposits can also be made to investment funds. However, those funds should follow legal policies where the fund’s instruments are in companies acceptedinto Estonia’s commercial register.
Investment funds cannot be withdrawn throughout the period of the residency permit.
Major investments are seen as permanent, as long they do not decrease throughout the residency permit’s duration. The only exception to this is value decrease resulting from market price fluctuations of said investment, which doesn’t give investors the right to withdraw their funds.
You must file a federal tax return if you are a U.S. citizen who is also a bona fide resident of Puerto Rico during the fiscal year and receive income as a U.S. government employee in Puerto Rico.
Your military service pay will be sourced to Puerto Rico if you are a bona fide resident of Puerto Rico and a member of the US armed forces, even if you work for the military in the US or another US possession. You will determine your residency as a member of the US armed forces by looking at your home of record. Even if you are stationed in the United States, if your home of record is in Puerto Rico, you are still a bona fide resident of the island. In this case, you’ll file a Puerto Rico return to report your worldwide income and a United States return to report your military pay. For taxes paid to Puerto Rico, a foreign tax credit is available on the US tax return.
Even if you are stationed in Puerto Rico, if your primary residence is in one of the fifty states, your income is sourced there. You must file a Puerto Rico tax return for income earned in Puerto Rico, as well as a United States tax return for income earned anywhere in the world. Taxes paid to Puerto Rico on income that is not exempt on the US tax return are eligible for a foreign tax credit.
The Military Spouse Residency Relief Act imposes some restrictions on spouses of active duty military personnel (MSRRA). Civilian spouses may be able to choose the same domicile (tax residence) as their military spouse.
1) Any wages, salaries, tips, or self-employment income obtained by the civilian spouse is considered Puerto Rico source income if the civilian spouse continues to be a bona fide resident of Puerto Rico under the MSRRA while in any of the 50 United States or the District of Columbia. The civilian spouse reports and files taxes according to the above-mentioned rules for bona fide residents.
2) If the civilian spouse continues to live in one of the 50 United States or the District of Columbia, and the civilian spouse’s only source of income is wages, salaries, tips, or self-employment, the civilian spouse will be taxed on worldwide income and will file only a federal and state tax return. If the civilian spouse has additional sources of income in Puerto Rico, the money may be required to be reported.
The MSRRA’s tax benefits for military spouses can save them hundreds of dollars in taxes and make the tax return filing process easier.
Residents and citizens of the United States must pay federal taxes for their job on the Island of Enchantment, so speak with a tax specialist about your individual circumstances to obtain the assistance you require.