What are pros and cons of being self-employed vs having your company in Estonia?

Answers:

  • Pros of being self-employed (FIE in Estonian): simpler accounting requirements, no capital investment requirement, your accounts are private.
  • Pros of operating as a company: you pay taxes only on the amount that you take out as dividends. You may but need not pay yourself a salary (and associated payroll taxes). You can take more employees on business partners on board. A company is limited liability, so if your business goes down your personal wallet is not affected.
  • Dont do FIE. OÜ as a company form is much easier. You can be self employed there as well.
  • I agree, don’t do FIE. Company (OÜ) is much easier and cheaper. FIE is “leftover” from the past. I’m quite surprised that especially foreigners finds it.
  • FIE has responsibilty for all its equities, OÜ only shares capital.
  • The FIE net income is treated as from employment so you have to consider social tax and income tax.
  • Current legislation in relation to both forms of doing business entails that in most cases it is more reasonable to owe your own company rather than being self-employed.

 


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