Estonia’s E-residency scheme is a truly innovative initiative. Besides being able to conduct your business online, there are numerous advantages to opening a company in one of the most digital countries in the world.
Throughout my journey as a digital nomad, I have consistently researched various tools and services that facilitate my lifestyle. My main concerns have always been accounting, financing, and tax management. To solve this, I made three basic decisions:
- Open an account with an international digital bank;
- Become an E-resident in Estonia;
- Open a company in Estonia;
- Use Xolo for my accounting management.
As a nomad without a fixed address, taking these steps has greatly improved my life. Having access to services that can be done from anywhere in the world has added a sense of convenience to my life that I previously didn’t think was possible!
Why start a company in Estonia?
Those who are well-integrated into the nomadic lifestyle know that Estonia is considered one of the most digital countries in the world. Most of its bureaucratic processes are done online, which makes life much easier for its residents.
After researching this small Baltic nation, it totally changed my image of Estonia. It was then that I discovered the E-residency program, which offers the opportunity for non-residents to open their company in Estonia.
But as this is not the focus for today, here is the link to another article where I tell you all about E-residency.
Today, we’re taking a deep-dive into Xolo, what it is, its plans, and its advantages and disadvantages. Continue reading to find out more!
Xolo reviews: what is Xolo.io?
Xolo.io, based in Tallinn, Estonia, was founded in 2015 almost simultaneously with the same country’s E-residency program.
Essentially, Xolo aims to make it easier for people to set up and run micro-enterprises by offering an online platform to manage your business, assisting with invoicing, accounting, and taxation.
Through their services, it is possible to create an online company, access banking and accounting services, and send invoices to over 180 countries. It also reduces the complexity of bureaucratic processes and the cost of doing business.
Xolo’s stand-out feature is that it takes care of a lot of business administration for you. This includes advice on opening a company and issuing invoices and bills.
How does Xolo self-service work?
After contracting their services, you delegate the accounting of your company to Xolo. Depending on the plan you choose, the company promises to exempt any work regarding the bureaucratic issues of your business.
Xolo has a comprehensive system in place to assist you and your company, providing you with management tools and performance reports. Your job then is to send the invoices and monitor the progress of the company through the platform.
It is important to highlight some differences, as it is the case of payments. If you choose Xolo GO, your clients will make their payments to Xolo’s IBAN (International Bank Account Number).
If you select another plan, however, Xolo will set up an EU business bank account, debit card, and an IBAN.
Who was Xolo.io designed for?
This was the first question I asked when I initially started looking into them. Basically, their services are tailored to independent professionals (freelancers), and those who own a small business without partners.
Xolo therefore helps autonomous professionals to have their company and services formalised. This way, all the bureaucratic processes are made more formal and can be protected by the laws of the country.
Freelancers can also take advantage of Xolo’s accounting management resources, as they become the legal representative of your company, providing all the necessary support. If you’re thinking this would make it easier to attract clients, you’d be right!
The different services provided are called Xolo Leap, Xolo Leap Pro, Xolo Go and Growth. Keep reading to learn about the ins and outs of each service.
A step-by-step guide to using Xolo’s services
The first step is to ensure that your company falls within Xolo’s requirements because although the company is very modern, it still does not accept some types of services.
Here is a short list of some of the professions that will be accepted should you wish to enlist the services of Xolo:
- Software developers and other information technology activities;
- Business consultants;
- Specialists in digital marketing;
- Translators;
- Designers;
- Photographers;
- Content developers;
- Online educators.
The list doesn’t stop there, on the official website you can check all the industries and professions that are accepted. If you meet the required standard, the next step is to register.
To register, read all the details presented and then choose your plan. Finally, just follow the steps and wait for your approval. Keep in mind that most of the services will require an electronic residence. Luckily, Xolo provides support in obtaining this.
Comparative table between Xolo’s plans
To make things just a little easier to understand, I like to use tables throughout my articles. So, here’s a comparative table of all of the different plans on offer in April 2024, so you can make an informed decision.
Then, to conclude this article, I will be sharing my experiences and personal reviews of Xolo’s services.
This data that should help you better understand each service and help you choose the plan that best suits you:
Xolo GO | Xolo Leap | Xolo Leap PRO | Xolo Growth | |
Monthly tariff | € 0 | € 79 | € 119 | € 199 |
Time to approve registration | 10 minutes | 4 weeks | 4 weeks | 4 weeks |
Who is responsible for the company? | Xolo | Owner | Owner | Owner |
Annual turnover limit | Unlimited | Unlimited | Unlimited | Unlimited |
Mobile App | ❌ | ✅ | ✅ | ✅ |
Company card | ❌ | ✅ | ✅ | ✅ |
Online and secure banking | ✅ | ✅ | ✅ | ✅ |
Guarantee on deposits | ❌ | Yes, with LHV* | Yes, with LHV* | Yes, with LHV* |
Paying salaries to employees | ❌ | ❌ | Up to 3 employees | Up to 10 employees |
Share capital of EUR 2500 | ❌ | ✅ | ✅ | ✅ |
*Lõhmus, Haavel & Viisemann (Estonian Banking Services Company)
The different plans cater to different categories of professionals through various services. To gain a better understanding, let’s take a closer look at how each of them work:
Xolo Go
Xolo Go is ideal for freelance professionals. I found this plan to be exceptional because I know that many nomadic friends and freelancers could benefit from it. The service has no requirement to open a company and there is no monthly fee either.
However, know that you will need to pay a 5% fee on all payments made. Check the table of services and prices:
Plan | Xolo GO |
Price | 0 euros / month |
Current Promotion | |
Advanced business and management tool | ✅ |
EU registered company | No need to open a company |
Accounting and reporting | ❌ |
Payment Gateways | ❌ |
Personal accountant | ❌ |
*The prices shown do not include 20% VAT (Value Added Tax), which is applied automatically by Xolo.
Disadvantages of Xolo GO
Although there is no monthly fee, this plan still has some disadvantages, such as:
- Your services can only be offered in a B2B capacity or to commercial customers;
- The work may only be marketed with companies within the European Union that have a valid VAT registration;
- Payments via Stripe and PayPal are not accepted.
Xolo Leap and Leap Pro
Xolo Leap and Leap Pro were created to provide Xolo’s services to those who own a sole proprietorship. These plans offer tools and resources to professionals, to help them manage their digital company.
To contract this service, you must have Estonian E-residency. You will also be charged a monthly fee, which will vary depending on the plan you choose.
To make it easier to understand, I have made a price table. I have also added what is included in each plan. This way, you will have a clearer view when comparing and selecting your plan. See below:
Plan | Xolo Leap | Xolo Leap PRO |
Price | 79 euros / month | 119 / month |
Current Promotion | ||
Advanced business and management tool | ✅ | ✅ |
EU registered company | ✅ | ✅ |
Accounting and reporting | ✅ | ✅ |
Payment Gateways | ✅ | ❌ |
Personal accountant | ❌ | ❌ |
*The prices shown do not include 20% VAT (Value Added Tax), which is applied automatically by Xolo.
Disadvantages of Xolo Leap and Leap Pro
Neither the “Leap” plan nor the “Pro” plan give the entrepreneur the possibility to have a personal accountant. So, some transactions and bureaucratic processes may be hindered.
It is worth remembering that these two plans require you to have E-residency. You will also have to bear all the costs of obtaining E-residency, around €200. This amount does not include the cost of opening your company.
Another requirement that can also be seen as a disadvantage or hindrance will be the minimum share capital required, which is €2,500 (Xolo, at the time of writing this article, is responsible for this amount).
Xolo Growth
Xolo Growth is the most complete plan in this list. It is also aimed at professionals who have individual companies, but who require a little more support.
It features a complete set of tools and a dedicated accountant to help expand your business, and can be a great option for those who have capital and want to increase their profits. See the table:
Plan | Xolo Growth |
Price | 199 / month |
Advanced business and management tool | ✅ |
EU registered company | ✅ |
Accounting and reporting | ✅ |
Payment Gateways | ✅ |
Personal accountant | ✅ |
*The prices shown do not include 20% VAT (Value Added Tax), which will be automatically applied by Xolo.
Main disadvantages of Xolo Growth
The first disadvantage is the tuition fee, as you will pay a fee of €2388 each year. In addition, E-residency will also be required, so in the first year of the company the expenses will be higher.
The Growth plan can pay salaries of up to 10 employees, which can be a limitation in some cases, as many choosing this plan generally have a larger company.
When I first started to have more contact with people who owned remote businesses, I had no idea that they could grow so much. I ended up discovering that there are online businesses with incredibly diverse and talented teams.
What types of business activity are not accepted by Xolo?
Even with all the facilities offered by Xolo, the company still does not perform the accounting of certain services. I understand that it is a policy created for security, but I also believe that this should be modified.
Take a look below to identify if your type of work or company is on the list of services that aren’t covered.
- Buying and selling physical goods, including direct shipping and Amazon FBA;
- Financial services;
- Travel agencies;
- Games of chance;
- Sale of alcoholic drinks;
- Commercial transactions involving cryptocurrencies;
- Drop-shipping.
You can consult all accepted activities: https://www.xolo.io/activities
Of course, the list doesn’t stop there. Most of the services mentioned require a special licence. Estonia values this sense of legality, so Xolo decided to leave these activities out.
Are there tax benefits when working with Xolo?
Those who decide to participate in Estonian E-residency and open their company in Estonia should be aware of relevant tax policies and details about their tax returns. First thing’s first, Estonia is not a tax haven!
When money is taken out of the company and used to pay salaries, which may be your own, you do not have to pay tax on it in Estonia. However, it must be declared in your home country or country of legal residence.
Now, in the case of dividends, corporate income tax (CIT) must be paid in Estonia. The amount is 20% of the net payment the company receives. You can do your own research on this topic on the internet, and on Xolo’s platform, of course.
Whether you choose Xolo’s services or not, the rules and payments will be the same. The advantage of contracting an accounting company is that you won’t have to worry about these details.
Review of Xolo: what are the advantages?
I imagine that you must be curious to hear my thoughts about the advantages of Xolo, having experienced the process of registering and contracting their services. Here are some points that I consider as positive, present in all the plans I’ve mentioned:
- Different plans that cater for different types of professionals;
- All contact is made online;
- Debureaucratisation of many business processes;
- Greater security during transactions;
- Tools that allow greater control over your company;
- Online service and support that can be requested at any time;
- Possibility to have an individual accountant to help your project grow;
- Help with setting up a European Union corporate bank account;
- Support for the acquisition of E-residency.
Final Remarks
Those who have an open company and provide digital services know the importance of having professional support and assistance, which is why Xolo is such a great service.
As Xolo is an Estonian company, the whole team is prepared to adapt to your company or service, allowing you to compete fairly with other companies in the country.
I hope this guide to Xolo has helped you gain a deeper understanding of their services and whether they may be right for you and your business. I wish you the best of luck in your digital entrepreneurship and look forward to hearing from you!
