Complete Freelancer Setup Guide

Estonia's e-Residency program is your gateway to the European Union business ecosystem. It provides you with a digital identity issued by the Estonian government, allowing you to establish and manage an EU-based business entirely online. This is not citizenship or residency—it's a digital identity that grants you access to Estonia's advanced digital infrastructure.

The application process is straightforward. Complete the online form. You'll need a valid passport, a recent digital photo, and a brief motivation letter explaining why you want to become an e-resident. Most applications are approved within 3-4 weeks.

The €150 fee includes your digital ID card, card reader, and first pickup at an Estonian embassy or authorized pickup location. There are over 200 pickup locations worldwide. If you're in select countries, you can pay an additional €30 for courier delivery directly to your door—though this option is limited.

Once approved, you'll receive an email notification. You can then schedule a pickup appointment at your chosen location. Bring your passport for identity verification. The pickup process takes about 15 minutes, and you'll walk away with your digital ID card and card reader.

Official Resource: E-Residency Start Guide

Xolo Go is the most popular business management platform for Estonian e-residents, especially freelancers and solopreneurs. It's designed specifically for people who want to run a simple, location-independent business without the complexity of traditional accounting and compliance.

The best part? It's completely free until you send your first invoice. This means you can set up everything, explore the platform, and only pay when you actually start earning. The pricing is transparent: 5.9% per invoice plus a €0.50 transaction fee. There are no monthly fees, no hidden costs, and no long-term commitments.

To sign up, create an account using your e-Residency details. You'll go through a quick identity verification process using your digital ID card and card reader. Have your DigiDoc4 software installed and your card reader connected before starting.

During setup, you'll provide information about your business activities, your preferred business name, and your contact details. Xolo will guide you through the entire process, including registering your sole proprietorship with the Estonian Business Register. This happens automatically in the background—you don't need to interact with government systems yourself.

Once your account is approved, you'll have immediate access to Xolo's dashboard where you can create invoices, track expenses, manage clients, and monitor your tax obligations. Everything is automated and designed for non-accountants.

Official Resource: Xolo Go Setup Guide

Wise (formerly TransferWise) is the go-to banking solution for digital nomads and international freelancers. It's not technically a bank—it's an electronic money institution—but it offers all the features you need: multi-currency accounts, low foreign exchange fees, international transfers, and a physical debit card.

The main advantage of Wise is its multi-currency support. You can hold over 50 currencies in one account and get local bank details for 10+ currencies including EUR, USD, GBP, AUD, and more. This means your US clients can pay you via domestic ACH transfer, and your UK clients can use domestic bank transfers—no expensive SWIFT fees.

Opening a Wise Business account is free and sign up. You'll need to complete business verification, which requires your Estonian company registration number (you'll get this from Xolo once your business is registered). The verification process typically takes 1-2 business days.

Once verified, activate the currencies you need. For most freelancers, EUR and USD are essential. Add your Wise account details to your Xolo invoices so clients can pay you directly. Wise charges small fees for currency conversions (typically 0.35-1% depending on the currency pair) and international transfers (usually €0.50-2 depending on the amount).

Official Resource: Wise Business Account Guide

Now for the exciting part—sending your first invoice! Xolo Go makes this incredibly simple. Log into your Xolo dashboard and navigate to the invoicing section. You'll see a clean, intuitive interface that guides you through every step.

First, add your client details. Enter their company name (or full name for individual clients), address, and email. If they're an EU business, you'll need their VAT number for proper compliance. Xolo automatically validates VAT numbers and handles all the tax calculations based on where your client is located.

Next, create your invoice. Add line items for the services you provided, including descriptions, quantities, and rates. Xolo will automatically calculate totals, apply any necessary taxes, and format everything professionally. You can set payment terms (typically NET 30 days), add payment instructions, and include your Wise bank details.

Once you're happy with the invoice, send it directly through Xolo. Your client receives a professional PDF invoice via email, and Xolo automatically tracks the invoice status. You'll get notifications when the client views it and reminders if payment is overdue. When payment arrives in your Wise account, you can manually mark the invoice as paid in Xolo (or connect Wise for automatic reconciliation).

Remember: Xolo charges 5.9% + €0.50 per invoice sent. This fee is automatically deducted when you transfer money from your Xolo account to your personal bank account. The fee covers invoicing, accounting, and tax compliance—services that would cost much more with traditional accountants.

While Xolo Go handles most accounting automatically, taking 30 minutes to set up proper expense tracking will save you time and money at tax time. Estonian tax law allows you to deduct legitimate business expenses from your revenue, reducing your taxable income.

Connect your Wise account to Xolo for automatic transaction imports. This is a one-time setup that takes 5 minutes. Once connected, every time you make a business purchase with your Wise card, the transaction automatically appears in your Xolo dashboard. You simply categorize it (e.g., "Software subscription," "Office supplies," "Travel"), and Xolo tracks it as a deductible expense.

Common deductible expenses for freelancers include: laptop and equipment, software subscriptions, coworking space fees, home office costs (proportional), internet and phone bills (business portion), professional development courses, client meeting costs, and business travel. Keep receipts for everything over €15—you can upload them to Xolo via email or mobile app.

Xolo automatically calculates your quarterly tax obligations based on your income and expenses. Estonia's tax system is unique: you only pay income tax when you withdraw money from your business account to your personal account. The current rate is 20% on distributed profits. If you keep money in your business account, you pay no tax until you withdraw it.

The beauty of this setup is that Xolo handles all the complex accounting and tax compliance in the background. You focus on client work, send invoices, and track expenses. Xolo does the rest—including filing your quarterly tax returns with the Estonian Tax and Customs Board.