Over the past few years, increasing amounts of people from all over the globe have left their stressful, or unfulfilling desk jobs, opting for the “digital nomad” lifestyle. Working as a digital nomad is a great option for a number of reasons: you can be your own boss, work less hours, and of course, live anywhere you want.
In terms of country specifics, both Estonia and Malta have a lot to offer. These two countries have long been seen as top destinations for those who work online to call home. But which of these countries is better? Let’s investigate.
Located in the Mediterranean, midway between Europe and Africa, the beautiful island of Malta is an excellent option for many expatriates to set up shop. Not only is it blessed with a year-round warm climate, it’s also recently announced some excellent conditions for digital nomads.
A new temporary residency scheme aimed at people who want to move to Malta but work remotely was announced at the beginning of June, causing quite a stir among the expat community.
The programme offers a six-month visa and gives the option of obtaining a one-year ‘Nomad Residence Permit’.
To qualify, applicants simply need to show that they’re contracted to work remotely by a company based overseas, show that they run their own business or offer a freelance service to customers based abroad. This may also require a local company — which 1st Step can help you with.
Applicants must provide evidence that their income met the minimum threshold during the six months preceding their application. Currently, the monthly income threshold is €2,700 (gross).
At just €300, the programme is also a cost-effective option for those looking at moving (at least in the short-term) to the Mediterranean.
The living costs in Malta are considerably lower than the larger countries in central Europe, and the international schools reflect this low cost of living.
In addition, the aforementioned climate and relaxed pace of life make it an attractive location for expatriates, especially those with families. EU Membership also lends to the country’s political-economic stability.
Not quite blessed with the same climate as Malta, Estonia is one of the three Baltic States, nestled in the north-east of Europe.
Known for its historic old town (a world UNESCO site), located in the capital Tallinn, Estonia is officially one of the most digitally advanced nations on the planet and is, therefore, a beacon for all digital nomads.
The small Baltic nation launched a Digital Nomad Visa relatively recently. This visa allows remote workers to live in Estonia and legally work for their employer or their own company registered abroad or as a freelancer using a local company.
As of 1st August 2020, eligible location-independent workers have been able to apply for the chance to go to Estonia to live for up to a year with peace of mind that they can legally work.
Similarly to Malta, successful applicants would need an active employment contract with a company registered outside of Estonia, conduct business through their own company registered abroad, or work as a freelancer for clients mostly outside of Estonia. This may also require a local company — which 1st Step can help you with.
Applicants must provide evidence that their income met the minimum threshold during the six months preceding their application. Currently, the monthly income threshold is €3,504 (gross) monthly.
A relatively low cost of living compared to its larger mainland-Europe compatriots or its Scandinavian neighbors, coupled with the highly advanced digitisation make Estonia a great option for expats.
What about taxation?
For digital nomads, few things are more important than taxation. Let’s see how Estonia and Malta compare in that department.
|Estonia LLC||Malta LP|
|Residency||No restrictions||No restrictions|
|Digital Nomad Visa||Yes||Yes|
|Company Form||LLC||Limited Partnership|
|Min. number of partners||1||2|
|Min. share capital||€2500||N/A|
|Corporate Tax Rate||0% / 20%*||Tax Transparent|
|Limited Liability||Yes||General Partner – No /|
Limited Partner – Yes
|Accounts||Yes||No, yet recommended|
|Annual financial statements||Yes||Tax return only|
|VAT no.||Yes, if required||Yes, if required|
|Local CSP** required||Yes||Yes|
|Income tax rate||20%||0% if not remitted to Malta|
|Taxation of residents||Global||Territorial|
|Foreign dividends||Tax exempt||Taxed only if remitted to|
|Capital Gains Tax||Taxed at 20%||Tax-exempt|
|Costs||Min. 850 EUR||Starting from €75 per month|
|Shelf Companies||Yes||No for MLPs|
* The Corporate Tax Rate in Estonia is 0% until dividend distribution, and flat 20% at corporate
profit distribution. Estonia has a deferred corporate tax system.
** Corporate Service Provider
The table above shows just how tight these countries are in terms of their conditions for digital nomads. Which is best? It totally depends on the specific individual.
If you need help deciding which option is right for you, you can always get in touch with us and book a free 15-minute consultation.
- Limited liability;
- No Corporate Tax needs to be paid until distribution;
- There’s a digital register and highly-digitized society;
- Fast registry procedures;
- The flexible e-Residency programme;
- Offers a simple tax system;
- Tax residents pay no tax on foreign dividends;
- If the Estonia LLC holds more than 10% in a foreign subsidiary, participation exemption applies, and there’s no tax on foreign dividends.
- Great climate, year-round;
- Tax transparency option for your company, i.e. you pay your tax at home;
- Territorial taxation for tax residents;
- No requirement for accounting for MLPs;
- Only a simple annual MLP tax return needs to be filed;
- The foreign income of the tax resident is not taxed if not remitted to Malta;
- Exemption from Capital Gains Tax, even if remitted to Malta.
Take the 1st Step with us!
Regardless of which of these countries you choose, 1st Step is the perfect partner to help you establish your presence.
Malta Limited Partnership
Our Malta Limited Partnership is a simple and tax transparent business solution. It’s also extremely cost-effective, costing just 75 EUR per month, making it the ideal solution for freelancers and digital nomads looking to set up quickly and easily in Malta.
- Fast on-boarding — your application is processed and submitted the same business day.
- Flexi payments — a choice of 4 packages from as low as only 75 EUR per month.
- Accounting services — provided by top experts or simply a secure access to our accounting program.
- Business substance — any level: from local administrator to exclusive office for your company.
- Banking — setting up an IBAN for your company is smooth and fast.
- Payment gateways — we can set up payment gateways and obtain VAT for MLPs.
Setting up an Estonian entity couldn’t be more straightforward, thanks to 1st Step. Our tailored package covers all aspects of company establishment in Estonia, including:
- Setting up an IBAN for borderless banking;
- Boosting substance with payroll, leased office, etc.;
- Giving you limited liability;
- VAT registration, if required;
- Producing a tax residence certificate within 2 days;
- Setting up payment gateways.
Company registration takes as little as one week.
If you’re interested in starting or continuing your digital nomad journey in either Estonia or Malta, get in touch with us today and book your free 15-minute consultation with 1st Step.