Alexander Ioannidis is the Director and founder of Proudpixel OÜ, his web design, development, and services company. I asked him about his struggles as an entrepreneur, and why he choose the e-Residency program to launch his business. This article is the first in a series of posts featuring e-Resident interviews with micropreneurs, freelancers and entrepreneurs from all around the globe, who are conducting their businesses successfully thanks to the e-Residency program.
Alexander, you are an e-Resident owning a company in Estonia. Can you tell us about your business?
I offer a comprehensive range of website services, from design and development to hosting, maintenance, full website & social media management.
I started in 2007 with my first two clients, friends that needed websites. One project led to another, so it wasn’t long since I got a hosting reseller package and started thinking about expanding my services. Things were pretty tight back then and failure was not an option as bills had to be paid, so for the first year or more, I spent my days talking to prospective clients and my nights delivering what I promised. I didn’t sleep much, but I was young(er) and energetic and that kept me going.
My hard work started paying off within two years, and fast-forward 11 years to this date, I now have several loyal clients depending on me for their online presence.
Why did you choose the e-Residency program?
A borderless, digital society, what a groundbreaking concept! I read about it in WIRED magazine 3 years ago and thought to myself “I should do this”.
Certainly, e-Residency being also a platform for global entrepreneurship was the biggest factor in making my decision.
How was the situation in your home country, did you have a company there?
Yes, I did have a company there. I kept it running for the first two months of my Estonian company and then shut it down. Taxation is very high in my home country and one pays all sorts of taxes even if they are in business for only a day, being liable for these even before they issue their first invoice.
There was also a somewhat strict, government-imposed control of cash flow at the time, although things are a little better now.
This is a very unstable business environment though, at any time you may get fined for some mistake your accountant made (usually not 100% his fault, tax laws are unclear in some cases and keep changing all the time) or required to pay additional taxes retrospectively. One year, the government took an extra €1500 (equal to 3 months of minimum wage) from me because they calculated that next year I wouldn’t be making less money, so I should share my future wealth upfront.
By now you probably think I was making good money, but I wasn’t. I was barely covering my bills with some change to spare, and I was living a pretty modest life. I have all kinds of horror stories to share, but I think one already gets the picture of the situation in my home country.
What are your main challenges and struggles as an entrepreneur?
The development of my business, that’s is what I’m focusing on right now. Better deals with quality clients, finding the right subcontractors, making sure that the flow of income is not only steady but increasing.
I think this is my mental fuel right now.
You are a tax resident in your country, tell us how it is for you to conduct a business in one country while living in another.
e-Residency makes is extremely simple, I can sign any legal documents digitally from anywhere in the world, at any time, without physically visiting Estonia.
This is business how it should be, not having to stand in line at some government office wasting half a day just to fill in a form with the information they already have about me, sign it and have it stamped by two or three different people.
What’s the best part of having a company in Estonia thanks to the e-Residency program?
Stable business environment. No sudden news that taxes are raised again, no penalties because you were able to earn a few Euros more than last year, no retrospective payments, no wasting time waiting in line at some government office.
Also, you get to choose from some pretty good business service providers. They are very professional and straightforward in their communication, and their attitude nicely complements the virtues of the e-Residency platform.
Did you have to travel to Estonia to have your business running?
No, not to start my company. I started issuing invoices 5 days after starting my company because I had requested to register for an EU VAT number. My only mandatory visit to Tallinn was a few months (and several invoices) later, to open my company’s bank account. Although there are fintechs like Holvi that support e-Residents, Estonian law requires that a company’s share capital should be paid into an Estonian bank account, therefore any e-Resident with an Estonian company must travel to Tallinn for the “KYC meeting” (Know-Your-Client) at some point.
Editor’s note: you can actually register the share capital even if your bank account is not in an Estonian bank. Here’s more information from the e-Residency blog.
This meeting only took 20 minutes, since I was given pre-approval by the bank.
How is a typical working day for you? Where do you work, in coworking spaces, cafes, at home?
I start my day with a good breakfast and strong coffee. I’ll always spend 20-30 minutes reading about what’s new in my field of work before I actually start the productive part of my day. I’m lucky enough to have a beautiful, quiet home office, so I spend a lot of time working from there.
Co-working spaces are cool and are gaining momentum in my country, but still, they’re a bit expensive compared to the income of the average freelancer. Thus, I use co-working spaces sometimes, but not too often.
There are some cafés in the general area that offer a quiet environment and free Wi-Fi, so depending on the season I might visit them once in a while.
Where can we know more about your business and your projects?
Eh, well do you know the old saying about the shoemaker who was so busy making shoes for others, that he walked around barefoot? Well, I’m that guy, hahahahaha!
Seriously, I need to finish the development of my company’s new site and launch it. until then, one can visit www.proudpixel.ltd to find my contact info, and I’ll be glad to share some of my recent projects.
What advice would you give to aspiring entrepreneurs interested in the e-Residency program?
Estonia is not a tax haven, it is a stable business environment offering fair and straightforward taxation. If you’re looking to do shady stuff, there are plenty of places to do so, but this is not one of them.
Do your research before opening an Estonian company, it was the best option for myself as well as many others, but maybe it’s not the best option for you. There’s a great amount of information available online to educate yourself, but please hire a consultant if you don’t feel confident to make the decision or wish to save time.
I researched for almost two years before starting my company and explored every other option available before going ahead.
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