💡Optimist's Edge: E-stonia keeps investing in digital residency – and so should you

Summary

📉 What people are wrong about

Did you know that you can open a business in Estonia without ever setting your foot in the country? No? Then you are in good company. Most people have no idea that Estonia welcomes new digital residents.

In fact, in our recent Warp survey, 97 percent of the recipients responded that they do not know about e-residency and Estonia's digital community. This means that the few 3 percent that in fact are aware of the phenomenon have a really good chance of capitalizing on the benefits associated with being one step ahead.

📈 Here are the facts

• Estonia is the first country to expand its borders by using technology, making the nation’s ambitions of e-democracy serious, although other countries are implementing various other aspects of e-governance.
• Starting in 2014, Estonia offers “e-Residency” which provides the e-citizen entrance to a digital business environment and makes it possible to manage your business and work from anywhere in the world.

💡 Optimist’s edge

If you are an entrepreneur, citizen, or politician ready to plug your career, corporation or country into the latest e-infrastructure, E-stonia is the country to look at.

Never before has “remote” in business terms meant something for so many and the model which Estonia has carved out for its citizens as well as for business owners and entrepreneurs from other countries might soon become the new normal.

It is only a matter of time before other countries will have to take necessary steps towards a larger integration of digitization. At that point, it will be very useful to know, and experience how the frontrunner Estonia did it.

👇 How to get the Optimist’s edge

• Dive in - apply for e-residency. If you have the necessary documents such as a photo, copy of your identity and a credit card – and some information about your company ready – it will take about 30 minutes to apply. Yes, there is a fee, but it is not that high.

📉 What people are wrong about

In our survey the picture is very clear. Despite the uniqueness of Estonia and how the country is a forerunner in high prioritized areas such as digitization, innovation and data integrity – there has not been enough buzz about it.

97 percent have never heard of “e-residency” and Estonia’s advanced digital system.

📈 Here are the facts

Estonia is the first country to expand its borders by using technology, making the nation’s ambitions of e-democracy serious. Since 2014 the country offers “e-Residency” which provides their e-citizens entrance to a digital business environment and makes it possible for entrepreneurs to manage their business from anywhere in the world.

The nation’s history has been described as a key factor for turning the small country into a digital success. Ott Vatter, manager of Estonia's e-residency program, also points out that they have had both “good timing and good luck”. Several small ex-Soviet countries shared the same problems, dealing with both a lack of resources and a lack of people. “We didn’t have resources to have offices all around Estonia and offer these services physically to our citizens”, he told USnews.

Since the start in 2014, 80,000 residents have been registered, rendering 16,000 enterprises. The residents come from all over the globe and among the top ten are: Finland; Russia; Ukraine; Germany; China; United Kingdom; United States; India; France; and Italy. Yet, compared with the original ambition of gathering 10 million e-residents, a lot of work is still to be done!

What is e-residency in practice?

• An e-resident holds a government-issued smart ID card. With this card you are allowed to sign documents and make transactions as well as access different services – digitally.
• You can run your company from anywhere in the world and do all the necessary paperwork online, including taxes.
• The taxes are low and the business environment is safe.
• For a startup company the e-Residency program is by far the easiest and quickest way to access the EU.
• Another benefit is that companies within the scheme do not need to bother about conversion fees or currency fluctuations when receiving payments in Euros.

So, what type of company matches best with the e-residency concept?

• Any business or freelancer that wishes to reduce bureaucracy, lacks a fixed location and wishes to either enter and/or stay in the EU market, is one answer.
• Those who work with digital products, IT, marketing, consulting and publishing, might be the best fit for the concept.
• In fact, any company involved in software, AI and applied technologies related to the next digital shift will find it convenient to have a digital base in Estonia. But not only that, they also might be sought after as partners as the country is developing its e-governance system continuously.
• Also companies with staff working over borders can facilitate their internal organization, smoothly.

During the years the ambitious goal of reaching 10 million e-residents by 2025 has cooled of a bit, to say the least. Yet, Estonia is constantly developing the model itself.

Approaching the gender issue could be one of the keys to unlocking more of the potential. The e-Residency 2.0 white paper from 2018 is evidence that the Estonian system is still to be regarded as a work in progress.

💡 Optimist’s edge

Post-pandemic times as these might be, this is the best time ever for both E-stonia as well as potential new residents. Never before has “remote” in business terms meant something for so many and the model which Estonia has carved out for its citizens, as well as for business owners and entrepreneurs from other countries, might soon become the new normal.

Be ready for the second “wave”

“The first wave of e-Residency” was dominated by microenterprises and small businesses, video game developers and graphic designers are examples mentioned in official papers.

Today it might be even more lucrative to grow businesses related to the growing health care sector. The interconnection between EU countries is improving, and the health care system is looking for ways to be more digital; this might create more business opportunities for digital smart health care practices over borders.

The Estonian system is already characterized by openness and transparency which follows with digital matureness. The individual owns all information that is recorded about him or her in Estonia. Health records and other documents about a person also convey information about which other individuals (caretakers, for instance) have read the files. It is also possible for the individual to select who can and cannot access the information. The digitized health environment could serve as a great melting point for new entrepreneurs and individuals who want to test innovative concepts and business models.

• There is an advantage for non-European enterprises or individuals who wish to gain a smooth starting point and want a quick take off.
• Also, if you want to keep more of the money you bring into your business, the e-residency might be the thing for you. Taxes are competitive in Estonia. According to the Tax Foundation, it is even the most competitive tax system in the OECD. As long as the profit earned in the company is kept or reinvested in the business the corporate income tax rate is 0 percent.

👇 This is how you’ll get the edge

Check out and apply for e-residency. If you have the necessary documents such as a photo, copy of your identity and a credit card – and some information about your company ready it will take about 30 minutes to apply. Yes, there is a fee, but it is not that high.

Networking

Where are the new business possibilities found?
Marketplace – a guide and meeting place for e-residents.

Follow the official e-residency account on Facebook E-Residency @eResidents

Get inspired: listen to different e-residents stories about what made them choose E-stonia.

Investments

Find an interesting selection of companies working within sectors that are crucial for further progress and follow their individual journeys, both for investing your money and for detecting new business opportunities.

🍒 Extra edge?

The e-residenceship is today a somewhat male phenomenon, only 13 percent of the applications for e-residency come from female entrepreneurs.

The gender dimension is also something which the Estonian state brings up in their white paper for the future of the e-residency program , where they conclude that they are: “Looking for ways of bringing more female entrepreneurs on board, in order to diversify the e-Residency community”.

Being a woman in a man’s world might be an advantage. When political initiatives address the gender issue this typically means that there will follow grants and funding in order to enhance possibilities for the underrepresented sex.

More about E-stonia and e-Residency

The e-Residency 2.0 white paper Estonia launched in 2018 should be on the reading list of any country who takes digital development seriously. The journey towards full implementation of an advanced e-democracy is ongoing.

Learn about how it started

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Note: Claims in this article do not constitute financial or investment advice. Always do your own research before investing.