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How to Start and Manage an
e-Commerce Company in Estonia: Easily Trade on Amazon and Shopify

Nov 17, 2021 · 6 min read
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E-commerce is among the most popular reasons to start a company in Estonia. Estonian e-Residency program is greatly suited for many online businesses and particularly for online sales. We in Enty know the topic inside and out and can streamline the whole lifecycle of your e-commerce company from its incorporation to regular maintenance.
Starting a Company for E-commerce Trading
Billions of people purchase goods through online platforms every year. E-commerce platforms keep developing, engaging even more sellers, and it’s just boomed amid the Covid-19 pandemic.

Suppose you’re going to trade physical goods around the world. There are two ways to make this happen. You can build up the system by yourself: accept and process the payments on your website, collect and pack products, send them via delivery services, and so on. Or, you can delegate some tasks to an e-commerce platform and ease up the logistics.

Amazon or Shopify give ready-made solutions for marketing and an access million-dollar customer base. On your side is to choose an easy business residency, to get a VAT number and manage taxes without extra payments, how to file statements, and handle accounting properly. Let’s take a look at these issues.
Is Estonia Suitable for Trading on E-commerce Platforms?
Yes, it is! Firstly, the Estonian e-Residency program will let you open and manage your own company without visiting the country. And secondly, you’ll have full access to OSS and IOSS schemes that will let you cooperate with EU-based customers with simplified VAT rules.

There is also a range of other benefits in Estonia like convenient taxation, highly digitalized government services, and affordable options for banking. These conditions are extremely important for e-commerce companies.

How to Start and Manage Your E-commerсe Business in Estonia: Step-by-Step Explanation

Step 1. Get an e-Residency and incorporate an online company

In case you have an Estonian e-Residency card, it’ll take just one day to incorporate a company with Enty. If you don’t have an e-Residency card, it will take up to one month to do that. Learn more about e-Residency and swift incorporation with Enty from our article.

Step 2. Open a bank account, get a VAT number, and join other programs

It takes some legal sharpness and thoroughness, therefore we cover it in the Enty’s subscription. Our team will prepare all needed documentation to open a bank account. With our Corporate Secretarial services, you’ll be able to obtain a VAT number and join OSS or EORI programs.

Take into account that becoming VAT-liable is a must. Without it, you won’t be able to participate in the OSS scheme and simplify the process of taxation for your company.

Given that Amazon helps its sellers with VAT compliance, it still doesn’t cover all needs of the company. That’s where Enty will help — we have expertise in VAT-related questions and will help you deal with paperwork easily. The services are included in Enty’s subscriptions.

Step 3. Connect your business to an e-commerce platform

Once your company is ready to operate in legal terms, you can set up your workflow on the most suitable e-commerce platform. Note that during the process of implementation, such platforms can request a utility bill or rental contract from your company.

Once you provide an e-commerce platform with the document and then your account will be good to go.

Step 4. Accounting for E-Commerce Companies

So, now we get to the most complicated part, accounting. As a VAT payer and OSS participant, you’ll have to prepare reports on a monthly basis. Also, as an Estonian company you are obliged to submit annual accounting reports. Both these liabilities are covered by our e-Commerce plan along with accounting for payroll taxes if needed.

The solution is mostly automatized, so you have to connect your company with Enty to start. Then just upload your Sales report and invoices.
A Sales report is a specific type of document which reflects your trading activity, i.e.
  • sales amount
  • tax amount
  • countries where products were distributed
Around Sales reports, you take the invoices issued by the e-commerce platform and statements from the payment system. We don’t consider it as extra documents in the subscription plans. The number of bookkeeping documents consists of Sales reports, invoices issued by your company, contracts, and agreements for a certain period.

Automation is cool but it’s hard to get everything covered correctly without the touch of a professional accountant. That’s why our subscription includes a one-hour consultation with an accountant each month. You can also purchase additional consultations if needed.
What if I Still Want to Trade Online All by Myself?
If you’re looking to trade all by yourself, Estonia is suitable for you, too! Using the services of online payment solutions, you can streamline your payment workflow. Such services will provide you with a statement about transactions, so our automated accounting will work for you the same way as we explained above. Just choose a provider that has an integration with your bank, and Enty will take care of the paperwork.

So, as you see, starting an e-commerce company may be challenging but Enty will help you ease up the processes. Use a single platform to incorporate a company, streamline paperwork of your company to run all significant parts of your business from a single interface. Issue and manage your invoices, take care of accounting, and handle vitally important corporate tasks.
Explore Enty's e-commerce accounting and manage your company with ease!

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