How to become a location-independent entrepreneur

Once upon a time, work was a place you went to, to do specific things, usually for a fixed period of time. Now, for most of us, work is what we do… The professional activity we carry out is totally digital, and therefore the geography is immaterial: our work is now location-independent.

TL;DR: Setting up a profitable location-independent business

It’s a powerful shift, in global society, business potential, and individual mindset. 

While this movement has been thriving in stealth mode for decades, for some people this epiphany occurred, ironically, during the Covid lockdowns. Unable to commute to a regular place of employment or self-employment, they found a way to take care of business anyway, while legally confined at home. By combining the power of fast internet connectivity, cloud-based tools and software as a service, and increasingly affordable and diverse devices, work survived, and in some cases even thrived.

Working from home has been my default for many years, but during the pandemic a lot of people found it far from ideal, especially with next to no time to adapt and plan for it. When you have no suitable accommodation and structures in place, it can be very stressful to be forced to work this way, not to mention everything else that people were coping with simultaneously. So it’s unsurprising that during this time many dreamed of their mothballed downtown offices, and of one day going back to ‘normal’ — without immediately realising the world of opportunity which had opened up to them as a result of the powerful transition they’d just gone through: they had already decoupled the way they earned a living, from the place they usually went to do it.

A subtle shift, which may not even have been obvious, when we were not allowed to go anywhere anyway. But as the world started to unlock and people realized they couldn’t go back to 2019 whatever they did, some began to look forward instead of back — and embrace the potential that location-independent working could offer them, in the ‘new normality’.

What is location independence? From work-from-home, to work-from anywhere?

While enterprises of various sizes and industries continue to experiment with hybrid and distributed settings, the real power of a work-from-anywhere (WFA) approach and mindset is most easily grasped by freelancers and entrepreneurs. 

Forward-thinking employers are listening to their colleagues and hopefully supporting them in their choice of where to work (and recognizing that this is NOT a binary home-or-office trade-off), but they are still constrained by employment law and contracts. As such, they probably have a limit on how many days can be worked away from a country where that employment contract is registered. 

Some employees who had slipped the leash during lockdown got busted on random IP address checks, and others only realized the problem when they needed an insurance claim in the wrong country or something. It takes time for big business infrastructure and policy to catch up, and while there are some great solutions emerging in the employer-of-record (EOR) space (to offer local contracts), they’re not truly location-independent. 

Location-independent employment, is it possible?

For example, if you work for a business with an HQ and branches in the US, but you prefer to live in Europe instead, then they might be able to use an EOR with a trading entity in France to employ you. That works well. 

But even if the EOR has a presence in Morocco, which is where you want to live next, then they’ll need to do a new contract for the duration with their Marrakech agency — all achievable, but not quite flexible, and possibly costly. And while many EORs have hundreds of business presences around the world, they are not all everywhere, there will be places you cannot choose to live and work for various reasons. 

Open an e-Residency company from anywhere with Xolo →

Fair play with pay: A WFA employment minefield

Furthermore, large enterprises can run into salary equity problems they never had to consider before: If they employ a developer in Minnesota, who decides she’d like to go and live in Mumbai for a year, do they change her salary to match what they pay the developers they already employ in India? 

Untangling questions of fair pay on a global level has never been more complicated, and this may be one reason that employers who theoretically *could* offer opportunities to live and work further from HQ, in practice tend to limit this geographically in many cases.

How to become a location-independent entrepreneur

By comparison, a solopreneur or freelancer who has successfully made the mindset and operational shift to working from anywhere (and set their own rates), has far more choice and flexibility before them. 

Location-independent self-employment

Can you simply live and work from anywhere as a freelancer? Well, more so, than the average employee for sure. But, while employment law might not be coming up to bite you, business and tax law certainly will. Navigating this independently as a freelancer can be challenging.

Wherever you go, there will be different local regulatory frameworks regarding self-employment and what kind of visa and permissions you need — even within the EU this varies greatly from one country to another, and again, switching locations takes time and admin hassle. Sorting out your tax, and your social security, each time — probably using paid advisers to help you steer your way through the local systems. A great deal depends on the power of your passport too, because by sheer accident of birth, many people have a far harder time crossing borders without demonstrable means of support than do others.

And there are some places it’s pretty much impossible to operate in any case. If for some reason you have a burning desire to relocate to North Korea or Syria for example, nobody will be able to pay you, from places like the EU or US — the usual payment rails simply do not work. 

While some succeed for a long time navigating in legal gray areas when it comes to work permits and getting paid, mainly by use of tourist visas, it’s hard to create a consistent and credible professional presence if you are continually having to duck under the radar and pretend to be somewhere you are not… And getting caught can have huge and unpleasant consequences.

So while you can theoretically freelance freely in a more-or-less location-independent style, there are better solutions.

How to open and operate a location-independent business

One of these is to create a location-independent business — so you separate your professional entity from your personal self. Operating as a limited company has many advantages, but just like the lockdown survivalists, the power of unlocking the ability to work from anywhere might be one you did not expect.

What is a location-independent business?

A location-independent business is one with permanent establishment in one location, but which you can operate from anywhere.

That way your business can stay in one place, with all of its contracts and legal status within a known and understood regulatory framework, while you pick up your laptop and wander where you will. You can even choose, to a certain extent, the financial/business environment you want to be a home for your business (depending on each jurisdiction’s residency requirements. And it’s worth pointing out that wherever you go, you’ll still need to have permission to work, avoid sanctions, and all the rest, obviously.)  

But it’s far simpler to move yourself around than an enterprise, and you can do so a lot more frequently. Whether that’s around the world, or around your favorite local coworking spots and coffee-shops. And operating a limited company has many other advantages, over being a sole trader, not least of which is the limit on personal liability.

Advantages of opening a location-independent business:

• Your business can stay in one place, and one legal and tax system - while you can move around
• It helps you offer your clients a feeling of credibility and authority, to contract with a business instead of a drifting freelancer
• The limited liability of a business, as a separate entity to yourself, offers legal and financial protection

How to start a location-independent business

Depending on your primary or intended activity, the steps will vary - but the good news is, most businesses are already operating in a highly compatible style anyway, wherever they are. What about you? Essentially you will want to consider:

• Figuring out your minimum viable freelancing go-to-market strategy, to offer your unique value to the world
• Establishing the minimum portable toolset you need to do that - usually a laptop and/or phone. Other gear may be nice to have or even necessary, but choose everything with flexibility in mind
• Transition your customer/client contact, to location-independence. Showing up for face to face meetings is SO 2019! Respect their time and yours, and propose a video call
• Establish your budget, and costs, especially if you want to travel. Can you even leverage geoarbitrage, to earn in a strong currency, and spend in a weaker one?
• Create an online presence for your business, which need to emphasise your specific location - so long as you have legal contact details in your privacy policy and other statutory notifications (Which is where your Estonian e-Resident business comes in handy…)

Advantages of Estonian e-Residency for your location-independent business

Many globally-minded freelancers choose Estonia to use as a digital home for their business due to extensive advantages with this set-up, including:

• E-Estonia’s intrinsic digital infrastructure, where every business and regulatory service can be engaged with online — so you never have to visit any office or even the country (except perhaps one bank appointment initially)
• Estonia’s use of digital ID and signatures, via secure verified credentials, from anywhere in the world — even through mobile devices, thanks to SmartID — which makes it easy to do business from anywhere
• The speed of business incorporation — which has been accomplished in minutes, but typically takes less than one day
• The minimum share capital is 0.01 euros when opening a private limited company: offering a straightforward business model ideally suited to knowledge workers
• Zero-rated corporation tax on reinvested dividends — to encourage business growth and success, while also offering entrepreneurs flexibility on how to draw income from their business, especially while travelling
• The transparency and simplicity of Estonia’s public systems, like the multilingual Estonian business register, of which every e-Resident business forms part
• The e-Residency marketplace of suppliers, where a growing register of pre-approved dedicated support services exist to enable to support the set-up and operation of a diverse range of company types and activities (including multilingual services to support international e-residents.)
• Estonia’s uniquely enterprising startup culture, in which both local and e-resident businesses can thrive. Whether you're aiming for sustainable solopreneurship or to become the 11th Estonian Unicorn, you will fit right in
  
  

Wherever you, your suppliers, and your customers are located, Estonia is as close to a borderless business environment as you can get.

Frequently asked questions about opening a location-independent business with Estonian e-Residency

Choosing where to locate your business is nearly as important as choosing where to locate yourself, even when the two are no longer tied together. It’s a decision which you might live with for a while, and you need to feel confident that your business is settled in the right place, to reinforce your own plans to live and work in a more liberated way. So, here are some questions which frequently come up, about location-independence for e-residents.

Will a location-independent business help me to emigrate?

Once again what Estonia pioneers, the rest of the world pays tribute to… and there are now a growing number of countries in the EU and elsewhere, offering long-term visas to location-independent workers. More are emerging all the time, as countries rich in various natural resources and lifestyle attributes compete to attract high-earning professionals from around the world. Do you fancy a year on a Caribbean island, or hanging out in a nomad village in South America?

Some of these are called digital nomad visas, others remote work visas, and arguably some are in fact incorrectly labelled. Fees, qualifications, and provisions vary widely, and more are emerging all the time… but they are in many cases a route to long-term residency, and even permanent citizenship in a new country, providing you meet the requirements. Many of these options are open to both employees (with flexible employers!), as well as entrepreneurs.

In addition to a clean police record and health insurance, usually the terms of the visa require that the worker bring an income with them, such that they will not be a burden financially on the destination, and ideally will be a net contributor - it’s clearly a win-win, if a migrant brings their own source of income to spend locally, and does not deprive anyone of a local job. Having a location-independent business is a robust and effective way to clearly demonstrate the income requirement, in the globally understood language of the profit and loss account, and also for you to project that income into the future, making it easy to demonstrate why you will be an asset to your new home country.

Best of all, if you have an e-resident Estonian business, you can continue to operate it from wherever you end up - or, depending on the nature of the work, you might find it necessary or optimal to transition to different local setup with permanent establishment, when you find yourself somewhere you want to call ‘home’ for the long term. It may also be possible to continue to trade internationally through your OÜ, while setting up a local entity for clients in your adopted country.

Other people might want to use the new wave of remote work visas on offer to see the world slowly… living for a year or two in different locations, without the complexities of full tax residency and local business ownership. It’s like being a digital nomad (see below), on a very leisurely timeframe.

Again, Estonian e-Residency is the perfect vehicle to support this lifestyle, because it keeps your business in one place - with all the regulations, presence, and support underpinning it - while you get to live and work wherever you want to. Your clients may never know you are steadily seeing the world, because your work is consistent and reliable, and their invoices and communication from you remain consistent and professional, thanks to the entirely digital operation of your location-independent business.

Can I come to Estonia, as a location-independent e-resident?

Another happy outcome of the great unlocking has been Estonian’s ability to welcome guests from around the world once more, to enjoy all that this exciting and beautiful small country has to offer, and tourism is a significant contributor to Estonia’s GDP. There are also a great many business events which are exciting to visit and attend.

However, it is important to understand that your status as an e-resident makes no difference to your rights to visit, work in, or become resident in, Estonia itself (or anywhere else in the EU.) Those rights are conferred by your passport alone, and e-Residency has no bearing on that entitlement. Your business may have a ‘residence’ in the EU/Estonia, but not you personally.

But if you have a thriving location-independent business (or even an employment contract which does not preclude relocation) and you want to see what direct immersion in the unique Baltic innovation culture could do for you, then take a look at the Estonian Digital Nomad Visa. This was another world first when it launched in 2020, and enables remote workers to relocate to Estonia and work totally legally for up to a year, provided certain conditions (including an income threshold and background check) are successfully satisfied. Other digital nomad visitors now exist (more all the time!), but there are many good reasons for including Estonia in your location-independent plans!

Can my location-independent business be EU-based, through Estonian e-Residency?

Yes! It doesn’t matter where you live, where your customers live, where your suppliers live — or if in fact these three things are different and unrelated. 

This is attractive to many entrepreneurs, especially if they want to raise invoices and invest for growth in the euro, instead of a local currency which may be less stable. It is also attractive to others for political reasons, such as entrepreneurs from the UK post Brexit, who wish to retain trading partnerships and business presence in the union — while also understanding, as per the point above, that e-residency does not confer any extended rights to physical residency.

It may sound counterintuitive to place so much emphasis on where your business is located, when we are considering a life and work style which is completely independent of any given location. But it is the very act of locating your business in a stable, known, and reputable environment, which can give you the flexibility to work in it from anywhere you like. Raising invoice in Euros to your EU business bank, through your Estonian limited company with its prestigious capital city address… while you are wherever you choose to be at that moment.

Exciting, isn’t it?

Is Estonia a tax haven for location-independent workers?

No, Estonia is definitely not a tax haven.

Because of the 0% rate of corporation tax on unrealized dividends, some people do indeed get confused about this. But if you’re looking for somewhere to shelter wealth or evade taxes, Estonia is not for you. In fact, if you’re a tax dodger, the transparency and openness of the Estonian financial system will probably not be to your style at all…

Estonia currently ranks first in the International Tax Competitiveness Index and enables entrepreneurs to pay Estonian taxes entirely online with minimal friction. The income tax rate for private entrepreneurs and corporations starts at 20%, and there are VAT and other considerations to bear in mind. So, there are many reasons why people find the tax environment of Estonia attractive and straightforward — but it is not a tax-free life, if such a thing exists anywhere.

The unusual fiscal policy related to corporation tax is to encourage reinvestment and growth of profits in business, and comes out of the enterprise culture for which Estonia is world-renowned.  It is strictly related to business, and when it comes to personal taxation, this is usually indicated by where you live habitually.

Xolo cannot provide advice on your local individual tax arrangements, and you will need to consult a qualified professional where you reside, ideally with a specialism in offshore arrangements. We can reassure you that due to extensive global treaties to avoid double taxation, you are unlikely to get taxed on the same income twice, i.e. in Estonia and where you live. However, business entities and individuals are not treated as one and the same under these treaties, so you need appropriate advice to optimize (not avoid!) your tax liabilities.

Recommended reading: How to pay taxes for your e-resident business.

Being a digital nomad vs. being location independent differences

Once you disconnect the way you earn a living from a geographical location, many possibilities open up. And for growing numbers of people, this means getting to live and work in a range of locations, perhaps without ever calling any one of them ‘home’.  

Nomadic workers have been with us for a long time, arguably longer than anyone worked in offices or factories, which could be seen as a recent 20th century fad — prior to the industrial revolution, people used to go where work needed doing, often seasonally, and working from home was common too! It’s well worth remembering that, when we talk about ‘new ways of working!’

Today the convergence of reliable connectivity, cloud storage, and portable/mobile devices to work on, means you can take the work with you instead of moving around to find it, and rather than travel being a luxury to squeeze into occasional downtime between bouts of working, it can be part of a more blended lifestyle if that’s what you want… Travelling slowly, living like a local, maybe connecting and collaborating with fellow digital nomads along the way.

Full-time digital nomads have unique attributes when it comes to tax residency as well (see above) — but again, specialist advice is essential, and outside the scope of this article.

For others, the freedom of location-independent working means being free to travel when you want to, from a home-base you have chosen for reasons other than being close to someone else’s business HQ.  Those reasons, and how you structure your time, are up to you. You may also be able to leverage the potential of the emerging wave of remote work and digital nomad visas (see above.)

By way of example: I have been living in the same country, not that of my birth, for many years. Although I have moved around a fair bit in this region, I do regard this area as ‘home’ (and have less location-independent family members, such as daughters in school, to consider.)  But my location-independent e-resident business has enabled me to live in different cities/villages, and homes, as well as attend clients events and experiences wherever I want to. And I get to extend those journeys at will, in order to have a more lasting an immersive experience, including taking other family members along with me when and where it makes sense. 

As long as I’ve got my laptop with me and something to connect it to, I can work — even though for some things, I definitely prefer to have all my stuff around me in my regular home office (like podcast recording.) While you can’t always assume every Airbnb will have great broadband, etc. you can usually arrange these things straightforwardly at low cost, wherever you end up needing to do a bit of work, not least with the global network of coworking and coliving spaces available (which are also a great place to meet others with a similar mindset.)

So, you might opt for being a ‘digital slowmad’ like me instead — what matters in location-independence terms is having that choice.

For other people, this might mean extended visits to friends and family, in response to changing circumstances. It could mean spending every school summer holiday in a different country, or a chance to give your kids a world-schooling opportunity somewhere brand new. 

For others, working in this way means being able to accompany a location-dependent spouse as they pursue a very different kind of career — in the military, diplomatic corp, or mineral industry, for example.

Therefore, while being location-independent is a requirement for digital nomadism, the other way around is not the case. It may simply mean you can work from home, visit clients and events, or hang out at a local coworking or shared space when you feel like it.

The power comes from the location-independent nature of your work, what you choose to do with it afterwards is up to you. And that’s what’s so exciting!

How can I get started with a location-independent business?

If you’re freelancing already, or you have a business idea to liberate yourself from the corporate treadmill, it’s never been easier to make the switch.  You are probably already doing a significant proportion of your work digitally anyway, as almost every knowledge-worker does… How much of your day in the office actually requires you to be physically there? How could those meetings and communications be transitioned to a location-independent workflow, leaving you free to be wherever you like?

Set yourself free to go anywhere in the world, but establishing a stable, intentional, and well-supported environment for your business entity, and you will absolutely have the best of both worlds. With Xolo Leap, there’s nothing standing in the way of your new location-independent lifestyle!

About Maya

Maya Middlemiss is a freelance journalist and author, excited about the future of work, business, money, and technology. She operates her e-resident business through Xolo Leap, so that she can work frictionlessly with brands and publications all over the world, and she is the host of the Future is Freelance podcast. Exploring the social impact of technology on our changing world, and bringing those stories to life in an accessible and inclusive way, is her passion — because all of this is far too exciting to leave it to the geeks. Maya is a 'digital slowmad', originally from London, presently living with her family in Eastern Spain.