Comparison Disclaimer
Pricing and features shown are based on publicly available information. Always verify current pricing on provider websites before making decisions. We receive affiliate commissions from some providers. Information current as of January 2025.
Quick Decision Tree
Yes → US (Delaware) C-Corp is strongly preferred by US VCs
Yes → US company is simpler for taxes and banking
Yes → EU (Estonia) is usually better: simpler taxes, lower costs, easier banking
Estonia vs Delaware: Side by Side
| Factor | Estonia (EU) | Delaware (US) |
|---|---|---|
| Formation cost | €0-200 | $500-1,500 |
| Annual maintenance | €79-129/mo (with Xolo) | $500-2,000/year + accounting |
| Corporate tax | 0% on retained earnings | 21% federal + state |
| Tax on dividends | 20% when distributed | Varies by situation |
| Banking ease (non-US) | Easy (Wise, Revolut) | Hard (often denied) |
| Stripe availability | ||
| Remote management | 100% online | Mostly online |
| VC familiarity | Low (EU VCs ok) | High (US VCs prefer) |
| Required visit | Embassy pickup for e-residency card | None required |
Tax Comparison: The Real Numbers
Estonia (OÜ)
- Retained earnings: 0% tax
- Distributed dividends: 20% (14% for regular distributions)
- VAT: 22% (if registered, threshold €40k)
- Payroll tax: 33% social tax on salaries
Delaware (C-Corp)
- Federal corporate tax: 21%
- State tax: 0% in DE, varies if nexus elsewhere
- Dividends: Taxed again at shareholder level
- Franchise tax: $175-200k/year (varies)
For bootstrapped businesses reinvesting profits, Estonia's 0% retained earnings tax is significant.
Banking Reality for Non-US Founders
The US Banking Problem
Non-US founders often struggle to open US business bank accounts. Banks like Mercury, Chase, and Bank of America frequently reject applications from non-residents, even for legitimate Delaware companies.
US Company Challenges:
- • Many banks require US address/SSN
- • Mercury/Brex may accept but are selective
- • Account closures happen without warning
- • Wire transfers to non-US can be slow
Estonian Company Advantages:
- • Wise/Revolut accept e-residents easily
- • Multi-currency accounts standard
- • No in-person visit required
- • SEPA transfers free/cheap
VC Funding Considerations
The VC Reality
US VCs strongly prefer Delaware C-Corps. Their legal documents, SAFE agreements, and investment structures are all designed for Delaware entities. Raising from US VCs with an Estonian company is possible but adds friction.
Start with Delaware C-Corp or plan to flip later. The flip costs $10-50k in legal fees.
Estonian OÜ is often better. EU VCs are comfortable with EU entities. No flip needed.
Who Should Choose Which?
Choose Estonia (EU) if:
- Bootstrapping — Not planning to raise US VC
- Non-US founder — Banking is much easier
- EU customers — Simpler VAT, GDPR compliance
- Reinvesting profits — 0% tax on retained earnings
- Digital nomad — 100% remote management
Choose Delaware (US) if:
- Raising US VC — VCs strongly prefer Delaware
- US resident — Simpler personal tax situation
- US customers — Local presence can help sales
- Acquisition target — US acquirers prefer US entities
- Stock options — Easier ESOP/ISO structure
Frequently Asked Questions
Common questions about EU vs US companies
All information verified as of December 2025. Prices and features subject to change. Always verify current pricing with providers.
