If I'm a Board Member or Shareholder, How Do I Pay Myself?
Here are your available options:
Dividend Distribution: You can choose to distribute dividends, typically done once a year after the annual report, provided there are profits available for distribution. This option assumes you can distribute enough dividends to cover your annual expenses.
Employment through Companio Work: Consider becoming an employee of your Estonian company, even if you don't reside or are a tax resident in Estonia. With Companio Work, you can enjoy a seamless hiring process, become employed in your country of residence, and contribute to your social security, pension, and unemployment benefits. Check out Companio Work for more details.
Invoicing as a Contractor or Freelancer: You can invoice your Estonian company as a self-employed contractor or freelancer, provided you're registered as such in your country of residence. Your Estonian company won't pay taxes on these wages as they're considered reinvested in the business. However, you will be responsible for paying taxes as a freelancer in your country of residence. The suitability of this option depends on your home country's tax regulations.
Invoicing from a Nomadic Lifestyle: If you don't have tax residency in any country, like a true digital nomad with no permanent establishment or residence, you can invoice your company as if you were a contractor, using your current residence as the billing address. This ensures compliance with your Estonian business. Ensure you consult a local tax advisor to confirm no tax obligations in any country. Compliance with the tax laws of your tax-residency country is your responsibility.
Furthermore, if you were receiving a combined 80/20 salary as a board member and employee in Estonia, there's good news after October 9, 2023. Your salaries will be consolidated into a single wage, and you won't need to pay separate taxes in Estonia for the board member portion. You'll need to decide whether to operate as a contractor or employee through Companio Work.
Dividend Distribution: You can choose to distribute dividends, typically done once a year after the annual report, provided there are profits available for distribution. This option assumes you can distribute enough dividends to cover your annual expenses.
Employment through Companio Work: Consider becoming an employee of your Estonian company, even if you don't reside or are a tax resident in Estonia. With Companio Work, you can enjoy a seamless hiring process, become employed in your country of residence, and contribute to your social security, pension, and unemployment benefits. Check out Companio Work for more details.
Invoicing as a Contractor or Freelancer: You can invoice your Estonian company as a self-employed contractor or freelancer, provided you're registered as such in your country of residence. Your Estonian company won't pay taxes on these wages as they're considered reinvested in the business. However, you will be responsible for paying taxes as a freelancer in your country of residence. The suitability of this option depends on your home country's tax regulations.
Invoicing from a Nomadic Lifestyle: If you don't have tax residency in any country, like a true digital nomad with no permanent establishment or residence, you can invoice your company as if you were a contractor, using your current residence as the billing address. This ensures compliance with your Estonian business. Ensure you consult a local tax advisor to confirm no tax obligations in any country. Compliance with the tax laws of your tax-residency country is your responsibility.
Furthermore, if you were receiving a combined 80/20 salary as a board member and employee in Estonia, there's good news after October 9, 2023. Your salaries will be consolidated into a single wage, and you won't need to pay separate taxes in Estonia for the board member portion. You'll need to decide whether to operate as a contractor or employee through Companio Work.
Updated on: 29/09/2023
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