Complete Agency Setup Guide

Estonia's e-Residency program is your gateway to establishing a legitimate EU agency business. It provides you with a digital identity issued by the Estonian government, allowing you to register and manage an EU-based company entirely online—no matter where you're physically located. This is not citizenship or residency; it's a government-issued digital identity that grants access to Estonia's world-class digital business infrastructure.

For agency owners, e-Residency offers significant advantages. You gain instant credibility with international clients through an EU company registration, access to EU banking and payment systems, the ability to legally invoice clients worldwide, and a business-friendly tax structure where you only pay tax on distributed profits (not reinvested revenue). Estonia is consistently ranked as one of the most entrepreneur-friendly countries in Europe.

The application process is straightforward. Visit the official e-Residency portal and complete the online form. You'll need a valid passport, a recent digital photo, and a motivation letter. For agencies, focus your motivation letter on your business plans, team structure, target markets, and why you chose Estonia. Mention specific services you'll offer and your growth projections.

The €150 fee includes your digital ID card (with advanced cryptographic security), card reader for digital signatures, and first pickup at an Estonian embassy or authorized location. There are over 200 pickup locations worldwide. Processing time is typically 3-4 weeks, though it can be faster for complete applications with strong motivation letters.

Official Resource: E-Residency Start Guide

Xolo Leap Pro is the premium tier of Xolo's business management platform, specifically designed for agencies and companies with complex financial needs. While regular Xolo Leap (€79/month) works for smaller agencies, Leap Pro (€129-199/month depending on revenue) includes CFO-level support, advanced tax advisory, multi-stakeholder management, and priority customer service—all essential for agencies scaling beyond €100k annual revenue.

The key difference for agencies is the level of support. Leap Pro assigns you a dedicated financial advisor who understands agency business models. They'll help with tax optimization strategies, dividend distribution planning for multiple owners, contractor vs employee decisions, international expansion planning, and quarterly financial reviews. This is like having a fractional CFO for a fraction of the cost (traditional CFOs charge €2,000-5,000/month).

Multi-stakeholder support is crucial if you have co-founders or partners. Leap Pro handles cap table management (who owns what percentage), shareholder agreements, dividend distributions to multiple owners, and compliance for multi-owner Estonian OÜ structures. Everything is automated and tracked digitally, so there's no confusion about ownership or distributions.

To sign up, create an account using your e-Residency digital ID. You'll complete identity verification using your card reader, then provide company information including your business name, activities (select all services you might offer), and shareholder structure if applicable.

Xolo will register your Estonian OÜ (limited company) with the Business Register within 1-2 business days. Unlike sole proprietorship (FIE), an OÜ provides liability protection—your personal assets are separate from business assets. This is critical for agencies with clients, contracts, and team members. You'll receive your company registration number, which you need for opening bank accounts and registering with Stripe.

Once approved, you'll access Xolo's agency dashboard where you can manage multiple clients, create project-based or retainer invoices, track team expenses, monitor profitability by client or project, and generate financial reports. Everything integrates with your accounting, tax filings, and annual reports—all automated.

Official Resource: Xolo Leap Pro Features

Revolut Business is the modern banking solution for agencies with teams. Unlike traditional banks, Revolut offers instant account opening (1-2 days vs 2-4 weeks), built-in team card management, granular spending controls per team member, excellent exchange rates for multi-currency operations, and seamless API integrations with accounting tools. For agencies managing team expenses and client payments, it's significantly better than legacy banks.

The pricing tiers are designed for different agency sizes: Freelance (€0/month) for solo agencies, Starter (€25/month) for 2-5 team members with basic features, Grow (€100/month) for growing agencies with advanced expense management, and Scale (€119/month) for established agencies with custom integrations. Most agencies start with Starter or Grow and upgrade as they scale.

Team card management is where Revolut shines. You can issue virtual or physical cards to each team member, set individual spending limits (daily, weekly, or monthly), restrict cards to specific merchant categories (e.g., only software subscriptions or travel), require manager approval for purchases over a threshold, and freeze/unfreeze cards instantly. This eliminates expense report fraud and gives you real-time visibility into team spending.

To open an account, visit Revolut Business and sign up. You'll need your Estonian company registration number (from Xolo), company documentation (Xolo provides this), and your e-Residency ID for verification. Choose your pricing tier based on team size and features needed. The verification process takes 1-2 business days.

Once approved, activate the currencies your agency needs. For most EU agencies, EUR is primary, but adding USD, GBP, and other currencies is free and instant. Multi-currency support is crucial if you're working with international clients or paying contractors in different countries. Revolut's exchange rates are typically 0.5-1% vs 3-5% at traditional banks.

For agencies managing multiple client currencies, Revolut's multi-currency accounts are game-changing. Client pays in USD? Hold it in USD until you need EUR. This avoids unnecessary conversions and lets you benefit from favorable exchange rates. You can also pay international contractors in their local currency with minimal fees.

Official Resource: Revolut Business Features Guide

Stripe is the payment infrastructure for modern agencies. While Xolo handles basic invoicing, Stripe enables sophisticated payment workflows: recurring subscriptions for retainer clients, one-time payments for project milestones, payment links for quick proposals, team access with different permission levels, and client portals where customers can manage their own billing. For agencies managing multiple clients with different billing structures, Stripe is essential.

The biggest advantage for agencies is subscription billing. Instead of manually sending monthly retainer invoices through Xolo, Stripe automatically charges clients on a schedule—monthly, quarterly, or annually. Clients can update their payment methods themselves, reducing your admin work. Failed payments trigger automatic retry logic and dunning emails. This automation alone saves 10-15 hours per month for agencies with 10+ retainer clients.

To set up Stripe, create an account. Select Estonia as your country (you'll need your OÜ registration number from Xolo). Complete business verification by uploading your company documents (Xolo provides these). Stripe's verification typically takes a few hours to 1 day.

Connect your Revolut Business account (or traditional bank account) for payouts. Stripe holds payments for 7 days initially (fraud protection), then pays out daily or weekly to your bank account. After a few months of transaction history, the holding period reduces to 2 days. Stripe fees are 1.5% + £0.20 per European card transaction (slightly higher for international cards).

For agencies, set up Stripe Products for your core services: "Monthly Retainer - Standard Package (€2,500/month)," "Monthly Retainer - Premium Package (€5,000/month)," "Project Milestone Payment (custom amounts)," etc. Create subscription products for retainers and one-time products for project payments. This standardizes your offerings and makes onboarding new clients faster.

Team access is crucial for agencies. Add project managers or account managers to Stripe with restricted permissions. They can see client subscription status, issue refunds, or create payment links without accessing company financial data. This distributes client management work across your team while maintaining security.

Official Resource: Stripe Billing Documentation

Building your team structure correctly is crucial for scaling your agency. The decision between hiring contractors versus employees affects costs, flexibility, taxes, and legal compliance. Most agencies start with contractors for flexibility and lower overhead, then hire employees for core roles as revenue stabilizes.

Contractors vs Employees in Estonia: Contractors work independently, invoice you for services, manage their own taxes, can work for multiple clients simultaneously, and have no employment protections. They're perfect for specialized skills (designers, developers, copywriters) or project-based work. You pay their invoices through Revolut or Wise, and Xolo tracks these as business expenses.

Employees receive regular salaries, get employment benefits (health insurance, vacation), work exclusively for your company, and have strong labor protections. In Estonia, employee costs are roughly 1.35x gross salary (employer taxes). For example, a €3,000/month salary costs you ~€4,050/month total. Xolo Leap Pro handles all payroll, tax withholding, and compliance.

For international contractors, pay them through Revolut Business or Wise in their local currency. Most contractors prefer platform payments like PayPal, Wise, or Payoneer. Set up clear contracts specifying: scope of work, payment terms (typically NET 30), intellectual property ownership (your company owns work product), confidentiality agreements, and termination conditions. Xolo's legal templates cover standard contractor agreements.

If you're hiring Estonian employees, Xolo Leap Pro manages the entire process: employment contract generation (legally compliant), monthly payroll processing and tax withholding, tax filings to Estonian authorities, annual tax statements for employees, and benefits administration. The setup takes 1-2 weeks and costs nothing extra—it's included in your Leap Pro subscription.

Time tracking integration is important for agencies billing hourly or tracking project profitability. Tools like Toggl Track or Harvest integrate with Xolo, automatically categorizing time entries by client and project. This gives you accurate profitability data: if a project took 80 hours at €50/hour blended team rate (€4,000 cost) but you billed €5,000, you made €1,000 profit (20% margin). Track this religiously.

Recommended Tools: Toggl Track for time tracking, Harvest for time and expense tracking, Deel or Remote for international EOR services.

With your legal structure, banking, payments, and team in place, you're ready to launch full agency operations. This step focuses on implementing systems for project management, client communication, and financial management—the operational backbone that lets you scale beyond founder-led chaos to systematic growth.

Project Management Tools: Choose a system that fits your agency's workflow. For creative agencies (design, branding, content), consider Monday.com or Notion (flexible, visual). For development agencies, use Linear or Jira (developer-focused). For marketing agencies, Asana or ClickUp (comprehensive). The key is consistency—pick one and use it religiously for all client work.

Structure each client as a separate workspace or board. Within each client workspace, create standard project phases: Discovery, Planning, Execution, Review, and Delivery. Assign tasks to team members, set deadlines, track time, and update status regularly. Client visibility is optional but recommended—many agencies give clients read-only access so they can see progress without interrupting the team.

Client Communication Systems: Centralize client communications to avoid scattered emails and Slack messages. Use Front or Help Scout for shared inbox management (entire team sees all client emails). For client collaboration, add Slack Connect channels or dedicated Discord servers per client. Set clear communication expectations: response time SLAs (e.g., 4 hours during business hours), preferred channels, and escalation paths for urgent issues.

Multi-Client Accounting in Xolo: Xolo Leap Pro automatically tracks revenue, expenses, and profitability per client. Tag every transaction with the relevant client name. When you pay contractors, note which client project it's for. This gives you accurate profitability metrics: Client A generated €50,000 revenue, had €30,000 in costs (team time, contractors, tools), so €20,000 profit (40% margin). Track this monthly.

Set up monthly financial reviews with your team. Review: total agency revenue and growth rate, profitability by client (which clients are most profitable?), team utilization (are people over/under-utilized?), cash flow and runway (how many months of expenses do you have?), and upcoming expenses and investments. Xolo's dashboard provides all this data automatically—you just need to review and make decisions.

Quarterly Financial Reviews: Schedule these with Xolo's dedicated financial advisor (included in Leap Pro). They'll review your P&L (profit and loss), balance sheet, cash flow, tax obligations, and growth projections. They'll recommend optimizations: when to distribute dividends, how to structure contractor payments for tax efficiency, whether to hire employees vs contractors, and opportunities for R&D tax credits or other incentives.

As you grow beyond €100k-150k annual revenue, consider hiring an operations manager or account manager to handle day-to-day client management. This frees founders to focus on sales, strategy, and high-level client relationships. Most agencies make this hire at €200k-300k revenue when founder time becomes the bottleneck.