You should first check your employment contract very carefully. There may be a no-compete clause that could prevent you from doing related work on your own.
If there isn’t one, then it really is no business of your current employer whether you start a company while employed. Still, you should be very careful of anything that might be construed as taking advantage of confidential information gained through your employment. Don’t use your work computer, steer clear of their customers, and so on.
Starting a corporation in a different country can be overwhelming. Estonia is relatively easy compared to other countries but you can’t do everything online.
In particular you’ll need a bank account to receive invoice payments. Are you prepared to travel to Tallinn and visit local banks in person to try convince one to open you a business account? If not, just incorporate in your home country and start with the bank you’re already using.
I’m not a lawyer or financial adviser, but generally and purely anecdotally speaking, taxation of EU corporations isn’t as complicated as some make it sound. If your company pays you a salary, it’s taxed as income. If you pay a dividend at the end of the year, it’s taxed as capital gains. It doesn’t make a substantial difference whether the company is in another EU country.
If you do create an Estonian corporation, there’s one nice thing about their tax law: corporate profits are not taxed until you actually withdraw money as dividends. Most other countries have a corporate tax charged from annual profits, which means that if your Year 1 goes great but Year 2 ends up losing money, tough — you’ve already paid taxes from Year 1 profits so there’s no way to subtract the loss retroactively. In Estonia, if you kept the profit in the company, you’d get to subtract Year 2 loss and pay tax only on the net profit when you finally do pay yourself the dividend.
If there isn’t one, then it really is no business of your current employer whether you start a company while employed. Still, you should be very careful of anything that might be construed as taking advantage of confidential information gained through your employment. Don’t use your work computer, steer clear of their customers, and so on.
Starting a corporation in a different country can be overwhelming. Estonia is relatively easy compared to other countries but you can’t do everything online.
In particular you’ll need a bank account to receive invoice payments. Are you prepared to travel to Tallinn and visit local banks in person to try convince one to open you a business account? If not, just incorporate in your home country and start with the bank you’re already using.
I’m not a lawyer or financial adviser, but generally and purely anecdotally speaking, taxation of EU corporations isn’t as complicated as some make it sound. If your company pays you a salary, it’s taxed as income. If you pay a dividend at the end of the year, it’s taxed as capital gains. It doesn’t make a substantial difference whether the company is in another EU country.
If you do create an Estonian corporation, there’s one nice thing about their tax law: corporate profits are not taxed until you actually withdraw money as dividends. Most other countries have a corporate tax charged from annual profits, which means that if your Year 1 goes great but Year 2 ends up losing money, tough — you’ve already paid taxes from Year 1 profits so there’s no way to subtract the loss retroactively. In Estonia, if you kept the profit in the company, you’d get to subtract Year 2 loss and pay tax only on the net profit when you finally do pay yourself the dividend.